Tronc Inc. (NASDAQ: TRNC), one of the largest newspaper chains in the United States, plans to buy out several editorial employees at its flagship Los Angeles Times. It is a further step in the downsizing of the industry plagued by high print costs and a revenue base that continues to shrink despite advances in digital sales.
Editor and Publisher Davan Maharaj wrote in a memo:
For the Los Angeles Times, and the news industry overall, 2017 has been challenging. We are weathering the challenges better than most, because of our dedicated staff and several initiatives that have helped our business. However, we need to address the current economic realities as we work to secure our future.
To do that, we are offering a limited voluntary buyout plan for certain Los Angeles Times employees. This plan will include severance benefits that those eligible may find appealing. Participation is entirely voluntary.
The paper is the largest in America’s second largest city.
Tronc has struggled on a wider basis, as revenue fell to $366 million in the first quarter from $398 million in the same quarter of 2016. The company’s net loss was $3 million, compared to $6 million in the comparable quarter. Tronc has divided itself into two segments. The first, troncM, primarily holds the company’s print businesses. Its revenue dropped from $343 million in the first quarter of 2016 to $311 million in the most recent quarter. Income from operations for the division was essentially flat at about $20 million. troncX, which holds most of the parent’s digital businesses, had revenue of $55 million in the first quarter, compared to $57 million in the year ago quarter. Income from operations was $4 million compared to nearly $7 million in the period of 2016.
Tronc has been one of the more encouraging turnaround stories among the big newspaper companies. Its adjusted EBITDA was $34 million, up slightly from the first quarter of 2016.