Courtesy of Romensko, is the below article in Crain's Chicago Business. It describes the Tribune's frustration with the rapidly declining circulation and advertising revenues of its biggest paper - the Los Angeles Times.
Ironically, just when the Times has begun to actually cover... Los Angeles... and fixing many of its weaknesses, those of us who have been critical and were prepared to start cheering on the Times are now confronted with the disastrous new LA Times Magazine - WEST; a publication that so totally misses the mark in every conceivable way- from design to content - that it seems to be specifically created to drive away any readers who might otherwise be tempted to re-subscribe to the Times.
More on that later, but here are some quotes from the article:
Tribune Chairman and CEO Dennis J. FitzSimons faces no bigger task in reversing his company's long slide than repairing its flagship newspaper, the Los Angeles Times.Circulation and advertising at the Times, which account for nearly 20% of the Chicago-based media conglomerate's total revenue, have fallen sharply since Tribune acquired it in 2000.
Now, Mr. FitzSimons and his L.A. management team — the second Tribune has installed there since the $8-billion Times Mirror Co. merger — need to find a solution before Wall Street loses patience."They've been throwing anything they can think of at that paper and nothing seems to work," says media analyst Edward J. Atorino of New York-based Benchmark & Co. "Wall Street likes the company, and we love Dennis, but if results don't start improving . . . it's going to be merciless."
For Tribune executives, the Los Angeles problem is "critical, and it's the most troubling kink in the turnaround story," says Eric McKissack, CEO of Chicago-based Channing Capital Management LLC, which holds more than 600,000 Tribune shares. "It'll be very difficult to turn the company around without turning the Times around."While the Chicago Tribune has suffered circulation and ad declines, its losses have been smaller.
Total ad lineage at the Tribune was flat during 2005, and weekday circulation during the six months ended Sept. 30 dropped 2.5% compared to the year-earlier period.
"Well, it's six years later, and I think they're beginning to understand why Times Mirror couldn't figure it out."In July, Tribune installed a new management team in L.A., headed by Publisher Jeffrey M. Johnson, a Tribune veteran. He has continued aggressive staff and cost cuts, reportedly lopping off 8% of editorial department jobs and replacing much of its ad sales staff. The paper also announced some key editorial changes, eliminating the critically acclaimed Outdoors section because of a lack of advertising and relaunching its Sunday magazine as an upscale title called West.
But those moves have yet to improve results — or even stem declines. On a recent conference call with Wall Street analysts, Tribune Publishing President Scott Smith said the pace of advertising revenue growth in L.A. slowed in the first nine months of 2005 and declined 3% during the fourth quarter, when total ad lineage dropped nearly 13%. (He didn't provide specific numbers.) Mr. Smith blamed the declines on a few troubling categories, particularly movie advertising, which analysts estimate accounts for between 10% and 15% of the Times' total, compared with 6% for Tribune's entire newspaper group.
"Our ad revenues grew 8% last year and our movie category grew, too," says LA Weekly Publisher Beth Sestanovich, a former advertising director at the Times. "We've got a lot of advertisers defecting from (the Times) and sending a piece of what they were spending there to us."
Ms. Sestanovich attributes the Times' advertising problems to ad rates that have become more expensive relative to the Times' sinking circulation. Ad buyer Kathy Gardner of Santa Monica, Calif.-based Palisades Media Group shares those pricing concerns: "I don't think the circulation justifies what they charge.
The circulation story isn't much happier. The Times' declines have outpaced those seen at local rivals the Orange County Register and the Long Beach Press-Telegram. Weekday and Sunday circulation numbers at the Times have dropped about 9% since 2003, despite an industry-leading 10 Pulitzer Prizes during that time...
The good news is that despite all the cuts since last July - almost all the good news from the Times in its actually covering... Los Angeles... has come since Jeffrey M. Johnson came on board last July.
So I assume the train wreck called WEST Magazine was sent speeding down the tracks long before his tenure and - hopefully - he will either quickly pull the plug or take the drastic steps necessary to fix it.