• by Erik Sass  @eriksass1, June 9, 2008

The Tribune Company is going to cut editorial content at all its newspapers, including the flagship Chicago Tribune, Los Angeles Times and Baltimore Sun, so that at least half of each edition is advertising.

Owner Sam Zell and COO Randy Michaels announced the new policy, euphemistically termed "right-sizing," during a conference call with analysts last week. The rollout of the new 50-50 policy will begin with the Orlando Sentinel on June 22.

The implications for newsroom staff were immediately obvious--and ominous. Publishing less news means the papers will require fewer reporters and editors. The company clearly hopes to achieve substantial savings through cutting staff, as well as production and distribution expenses.

Michaels remarked that "you can eliminate a ... fair number of people while eliminating not very much content. And so ... we believe that we can save a lot of money and not lose a lot of productivity."

The decision to "right-size" Tribune's papers comes after a string of bad financial news at the company. In 2007, total publishing revenues fell 9% to $3.66 billion, and in the first quarter of 2008, they slipped another 11% to $823 million. First-quarter advertising revenues were down 15%, led by losses in classifieds, which tumbled 27%.

Of course, given the drastic ongoing declines in print advertising, the 50-50 ratio will in effect be a moving target--accelerating the pace of newspaper shrinkage double-time. From 2006-2007, total advertising inches in Tribune Company newspapers fell over 13%, from 39,252 to 34,069.

If the 50-50 policy were already in force, this would have necessitated a 13% reduction in editorial volume, resulting in a total size reduction of 26%. Plotting the trend out, presuming that advertising inches decrease at the same pace, the newspapers would be less than one-quarter of their current size within five years.

Ken Doctor, a newspaper analyst with Outsell, Inc., described the approach as "strange" and "a retro way of looking at editorial content creation," recalling the glory days of USA Today in the early 1990s, with its emphasis on "charts, graphs, maps, lists," in the words of Michaels. Doctor added that it runs opposite to the tack of other publishers like Dow Jones, which are trying to maximize the amount of content distributed via digital channels--in part by retaining print reporters and repurposing their work, or adding to their workload.

Overall, Doctor said, it "seems to be a shrinkage strategy," as newspapers are already losing readers, and will do little to retain them by slashing editorial content: "People are reading newspapers less, and that will increase, especially if there's not as much there." Looking to the future, Doctor noted that layoffs have already begun and "they're going to get deeper and deeper."

Doctor said the Los Angeles Times, in particular, is in the crosshairs of Tribune's management as a newspaper that has high costs and declining ad revenues. There's always the hope that Tribune will sell the paper to "someone with deeper pockets than Sam Zell," but Doctor said it was hard to assess the current intentions of billionaires like David Geffen, Eli Broad, and Ron Burkle--all of whom expressed interest in buying California's largest newspaper during the auction of Tribune in 2006-2007. As for Tribune's new management, "I think they'll sell anything, with the possible exception of the Chicago Tribune, for the right price."