Tronc’s New York Daily News Editorial Cuts Stir Talk Of More Dealmaking
Tronc, which acquired the New York Daily News last year for $1 plus the assumption of debt, has slashed half of its editorial staff as part of an aggressive new emphasis on digital news delivery.
The company’s stock price has dipped a fraction so far today, to about $16.10, which is within the narrow range where it has traded throughout 2018. Investors have speculated that more deals could lie ahead for Tronc, which has had a bumpy ride since being spun off by Tribune Media and fatefully deciding to name itself for a contraction of “Tribune online content.” The rebranding drew widespread mockery, and executives reportedly are mulling a retreat from the name, among other strategic moves.
Along the way, more substantive blows have landed. Former chairman Michael Ferro left amid claims of sexual harassment and a mass shooting tore through the newsroom of the Capital-Gazette in Annapolis, Md.
The larger narrative of the newspaper business also remains troubled and the kind of belt-tightening hitting the Daily News is not unusual. Already buffeted by two decades of disruption by the internet, newspapers have seen Facebook and Google grow to dominate digital advertising, commanding more than 80 cents of every online ad dollar.
A recent report by Bloomberg speculated about the entire company — or perhaps just pieces of it — being sold. The company has not commented on its future plans. CEO Justin Dearborn is expected to lead a quarterly earnings call sometime in the next three weeks (the company hasn’t yet disclosed the date), and will surely be pressed by analysts for an update. Gannett, one of the few other national newspaper firms, made multiple offers for Tronc that were rebuffed, to the bafflement of many shareholders. It now says it is focused on advertising technology and is unlikely to buy more papers in the near term.
Earlier this year,Tronc sold the Los Angeles Times and San Diego Union-Tribune to billionaire Patrick Soon-Shiong for $500 million, using the proceeds to pay down debt. The company has also sold off some of its prized real estate, including Chicago’s iconic Tribune Tower, longtime home of the Tribune newspaper.
Mortimer B. Zuckerman’s decision to sell the Daily News last year ended a run marked by a pronounced left turn politically (its cover often derides President Donald Trump) as well as heightened financial struggles. Founded in 1919, the News long battled its archrival, the New York Post, for tabloid supremacy even as most other U.S. markets dwindled to one daily paper. But the media landscape has been radically transformed around the two papers in recent years, driving down circulation and forcing staff cuts.
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