Two top executives at newspaper publisher Tribune are stepping down as the company deals with its largest shareholder, a hedge fund known for cutting newsroom jobs, and grapples with a decline in revenue as the print-ad business shrinks.
The Chicago-based company, which owns the Chicago Tribune, New York Daily News, Baltimore Sun and other major daily papers, said in a Monday statement that CEO Timothy Knight and non-executive chairman David Dreier are both leaving their positions. The company is promoting chief financial officer Terry Jimenez to be the new CEO effective Jan. 31.
In a statement, Knight, who became CEO last January, said that the past year was focused on stabilizing Tribune financially so that the company can invest in quality local journalism, and that the company was in a “solid position to continue its transformation." In a memo to staff, he said the company will need to continue adjusting its costs to "the current revenue reality.”
Jimenez has been Tribune's CFO since 2016. He has also worked for Newsday and in industries outside media. His statements on Monday acknowledged that Tribune would continue repositioning itself to navigate "industry-wide challenges" while improving financial results.
“We don't know what this means, but remain concerned about the company's commitment to journalism,” tweeted the Baltimore Sun Guild, the union representing that paper's reporters, photographers and other staff. The Chicago Tribune Guild put out a statement saying that it was glad to hear board member Philip Franklin, the new non-executive chairman, say that the company would focus resources on employees and journalism.
Hedge fund Alden Global Capital became Tribune Publishing's largest shareholder last year; it holds a 32% stake. Alden owns one of the country's l argest newspaper chains and is known as a cost-cutter that eliminates newsroom jobs to squeeze out profits. Its papers include the Boston Herald, Denver Post and San Jose Mercury News.
Alden has been seeking growth. It previously tried to acquire Gannett, the owner of USA Today, which instead was acquired by another newspaper chain, GateHouse, that is managed by the private equity firm Fortress.
The newspaper industry is caught between the shrinking print business and the fact that tech giants Facebook, Google and Amazon consumer most online-ad dollars. Overall circulation has also declined, according to the Pew Research Center, although national papers like The New York Times have gained large numbers of new subscribers. Tribune said Monday that it also added digital-only subscribers in 2019. In the staff memo, Knight said the company exceeded its goal of 330,000 digital-only subscribers in 2019.
The company has already been offering buyouts in an attempt to cut costs before the next move from Alden, which agreed in December to stop increasing its stake until July 2020. Two Chicago Tribune journalists, fearful that Alden wants to control the company and will make deep staff cuts, went public in January with a column seeking a “civic-minded local owner or group of owners.”
Alden president Heath Freeman did not immediately return a request for comment.