Tribune to redesign papers, job cuts possible
NEW YORK |
NEW YORK (Reuters) - Tribune Co plans to redesign its financially struggling newspapers in the next few months to save money while making them more appealing to readers, a move that could lead to more job cuts.
Tribune plans to shift to a 50-50 mix of advertisements and news and other content for its papers. In some cases it will trim the number of pages, Chief Operating Officer Randy Michaels said on a conference call with lenders who helped finance the company's $8.2 billion buyout led by real estate magnate Sam Zell.
"When you look at the number of ads in the newspaper, on some days, the paper's two-thirds ads, but other days the number of ads is a lot less," Michael said. "We decided, just as a sort of arbitrary starting point, that the paper looks pretty good at about 50 percent advertising."
That does not count all-advertising sections and classified ads, he added.
The idea is to cut production costs, which Michaels said accounts for 88 percent of the expense of putting out Tribune's papers.
Cutting jobs could follow, including in the newsroom, where Tribune has been reviewing the productivity of each reporter.
"When you get into the individuals, you find you can eliminate a fair number of people, while not eliminating very much content," Michaels said.
Tribune previously said in February that it planned to cut up to 2 percent of its staff, or as many as 500 workers.
Separately, the sale of most of its interest in the Newsday newspaper to Long Island, New York-based Cablevision Systems Corp, along with a new debt from an unnamed bank, should produce $900 million that would help the company meet its other debt obligations through 2008, Zell said on the call.
Tribune has to pay about $1 billion in debt and amortization this year.
The money and the redesign all are intended to help Tribune avoid default on billions of dollars in debt and turn around the fortunes of its newspapers, which like most others in the United States, are ailing as advertising dollars dry up and readers get more of their news on the Internet.
Tribune is selling some of its properties while trying to find ways to grow its business from the inside, though so far a comprehensive solution has eluded the U.S. newspaper business.
The company also plans to add more statistics, graphics and photographs to make the papers more visually appealing, a move pioneered by Gannett Co Inc's USA Today in the early 1980s. That move was seen at the time as a gateway toward less serious news reporting, but also helped make USA Today the largest-circulation paper in the United States.
The first Tribune paper to get an overhaul will be the Orlando Sentinel, starting June 22nd, and the rest -- including the Los Angeles Times, the Chicago Tribune and The Sun in Baltimore -- would follow by the end of September.
Separately, Zell said that Major League Baseball is reviewing the financial books that Tribune has prepared for potential buyers of its baseball team, the Chicago Cubs, and that they could be sent out to those bidders by next week.
He also said Tribune continues to explore the possibility of selling the Cubs' ballpark, Wrigley Field, to the state of Illinois. Tribune rejected an earlier state plan.
He did not say whether Tribune will keep a 5 percent stake in the Cubs after selling the team, something a source familiar with the plans told Reuters on Wednesday.
Zell said that he had received no definitive offer on the company's stake in the Food Network, most of which is owned by EW Scripps Co. Scripps executives have said that they were interested in buying the stake from Tribune.
(Editing by Leslie Gevirtz)
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