It has been a rough summer for the Los Angeles Times, after plummeting stock prices and internal struggles have prompted the firing of the paper’s CEO, Austin Beutner.
Hard times have fallen upon the Los Angeles Times after its parent company, Tribune Publishing, fired the newspaper’s CEO and head publisher Austin Beutner earlier this month. According to a report from the Chicago Tribune, the move brought a wave of criticism from business and civic leaders in Southern California surrounding the disconnect between the West Coast news outlet and the Chicago-based company.
This Friday, Tribune Publishing CEO Jack Griffin publicly stood by his decision to change the leadership of the LA Times. Griffin claimed that the newspaper, the company’s largest, wasn’t keeping up with Tribune Publishing’s profit initiatives. Clearly, it is becoming increasingly difficult to maintain a steady revenue stream in the publishing industry.
Beutner, along with the other publishers in Griffin’s circle, was given “the independence and the autonomy, as they should, to pursue and implement their own local market strategies.” The current setup of the Los Angeles Times was deemed to be inconsistent with Griffin’s plan to keep selling print advertising space in the company’s papers.
Among Griffin’s plans to keep the company’s newspapers profitable were a strict cost structure, orders to diversify revenue and a continuous pursuit of new acquisitions that would help the overall bottom line. Curiously, the Tribune CEO declined to offer specific examples of how Beutner strayed from the rulebook.
Sources familiar with the leadership change have indicated that the LA Times was suffering a serious drop in financial performance, with specific difficulty keeping costs low. The newspaper also made a series of new executive hires that likely contributed to the poor financial performance in recent months. Three of the new executives have left the company since Beutner’s dismissal on September 8. Renata Simril, the newspaper’s chief of staff, Johanna Maska, the vice president of communications, and Nicco Mele, a digital strategist, have all departed from the Los Angeles Times.
The blame for the LA Time’s financial woes has fallen largely on the California News Group, which also includes the San Diego Union-Tribune and the Times. Tribune Publishing released a revised financial pan for the newspaper late on Friday afternoon, cutting revenue estimates by $25 million to fall somewhere between $1.645 billion and $1.675 billion for the year.
The company also adjusted its estimated EBITDA, or earnings before interest, taxes, depreciation, and amortization to reflect the poor financial performance, lowering their projections by $17.5 million to between $145 million and $160 million.
The Chief Financial Officer of Tribune Publishing, Sandra Martin, said in a statement that the revised guidance reflects the new changes to the yearly estimates, largely due to the market for newspapers in Southern California. The leadership change, Martin said, would delay the company’s efforts to address the lagging balance sheets, but expense mitigation efforts were helping to soften the blow.
Other sources revealed that Los Angeles investor Eli Broad has suggested that the newspaper be made private, but the recommendation was turned down by Tribune Publishing. Had this change been made, may people familiar with the company believe Beutner would continue to serve as chief executive. Griffin stated that no bid for the Los Angeles Times was ever made.
Beutner was a former investment banker on Wall Street, and served a stint as the deputy mayor of the city of Los Angeles before joining the Los Angeles Times in August of 2014. He was hired just a week after Tribune Publishing broke off from Tribune Media as a distinct company with Griffin at the helm.
Tribune Publishing currently owns and operates 11 major daily publications across the country, including the Chicago Tribune, the Times, and the Union-Tribune. It acquired the latter in May for the price of $85 million. Former Chicago Tribune executive, who left his post as the publisher of the Baltimore Sun Media Group, was appointed to take Beutner’s seat as CEO of the LA Times.
The newspaper can expect to undergo a wide range of changes under Ryan’s leadership. Many powerful Los Angeles residents have called for the return of the newspaper to local ownership, echoing demands that have been made since Tribune acquired the Times Mirror Company in 2000 for the price of $8.3 billion.
Since it began trading on the New York Stock Exchange roughly a year ago, the LA Time’s share price has dropped nearly 50 percent to close at $10.59 this Friday. The company is currently valued at $279 million.