Can an Editor Be a Publisher? Tribune Publishing’s Big Gamble

Tribune Publishing Co. (NYSE: TPUB) has gambled that the editors of its newspapers can take on the role as the head of their business operations, getting rid of its publishers, who traditionally handle business operations at the properties. Editors will become publishers as well. The move is highly risky, and it may fail, especially in local markets where a given publisher was highly effective.

The move by Tribune, crafted by its new Chairman Michael W. Ferro Jr. and new CEO Justin Dearborn assumes, that all publishers are created equal, which is clearly not the case. Some properties perform better than others, but the editors took publisher jobs in every market in which Tribune Publishing operates.

The decision was made as Tribune Publishing announced that last quarter and year during which former CEO Jack Griffin held the top job. For the faltering newspaper industry, the revenue numbers were good but operating income eroded.

Revenue for the final quarter of the year was $462 million, versus $457 million a year earlier. Revenue for the year was $1.673 billion, compared to $1.707 billion. Operating income for the fourth quarter was $10 million, compared with $36 million in the year before. Operating income for the year was $25 million for 2015, down from $88 million in 2014.

Publishers were replaced at the Los Angeles Times, Chicago Tribune, Sun Sentinel, San Diego Union-Tribune, Orlando Sentinel, Baltimore Sun, Hartford Courant, Morning Call and Daily Press. The head of the Los Angeles Times was fortunate. Tim Ryan will get a new position, president of publishing. Tony Hunter, former publisher of the Chicago Tribune, was fortunate as well. He becomes president of national revenue and strategic initiatives at Tribune Publishing.
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The action follows the unusual decision to make Dearborn the chief executive of the entire company. His recent employment experience was CEO of Merge, a company that provides image handling and processing and clinical systems for the medical community. The company was bought by IBM recently. Dearborn has to learn an entirely new industry.

Based on the total annual numbers for Tribune Publishing, some newspapers must have done well enough to contribute to the parent’s bottom line. The elimination of those publishers’ jobs puts Tribune Publishing’s results at risk.