The flow of imaginary cash

Tribune Publishing isn’t exactly rolling in dough these days:

Tribune Publishing’s earnings fell about 75% in the first quarter as advertising revenues at the owner of the Los Angeles Times continued to decline, the company said Wednesday.

The company posted net income of $3 million, or 10 cents per share, down from $12 million during the same quarter last year.

Revenues dropped nearly 5% to $396 million. Gains in circulation revenue did not offset continue declines in advertising revenue, which was down nearly 6% to $220 million.

“The first quarter of 2015 represents our second full quarter as a publicly traded company,” Tribune Publishing’s CEO Jack Griffin said in a statement. “Our results were in line with expectations and reflect the early initiatives of our five-point transformation.”

Griffin may be right: it might be too early to tell how Tribune Publishing is doing. (It was spun off from Tribune Media last summer.) Market cap, for now, is a modest $400 million or so.

However, TribPub is somehow coming up with $85 million to buy out the major San Diego daily:

The parent company of the Los Angeles Times has agreed to buy the U-T San Diego, uniting the newspapers of California’s two largest cities under common ownership.

Tribune Publishing, owner of The Times, the Chicago Tribune and other daily newspapers, announced Thursday that it will pay $85 million in a cash-and-stock deal for the U-T, eight community weeklies and related websites.

The acquisition will extend the company’s reach into the country’s eighth-largest city and give it a dominant position over a wide swath of Southern California.

Tribune will place both the Times and the U-T under the California News Group umbrella, suggesting they may be open to buying other Golden State news properties. The deal is for $73 million in cash, the rest in TribPub stock.

The AP story on this transaction is a little blunter than the story in the Times, at least in one regard:

Douglas Manchester, who bought the San Diego newspaper in 2011 for about $110 million, will remain owner of the U-T’s headquarters in the city’s Mission Valley area. He is seeking permission to build 200 luxury apartments there.

So Manchester’s down $25 million in four years, and — is he going to tear down U-T HQ? Is the Times going to take over production entirely?

(Via Georganna Hancock. Note: Tribune Media holdings include KFOR-TV and KAUT in Oklahoma City.)





2 comments

  1. McGehee »

    8 May 2015 · 7:09 am

    “We’re making less money? Obviously we need to be bigger and more monopolistic! It always worked for Rich Uncle Pennybags.”

  2. Barks »

    8 May 2015 · 10:35 am

    Perhaps the value of the building explains the “down $25 million in four years”. Manchester may be making money on the entire deal.

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