Two months after hedge fund Alden Global Capital became the largest shareholder in Tribune Publishing, the Chicago-based newspaper chain announced a buyout program to reduce employee head count and expenses.
Notice of the voluntary separation offer was sent to all Tribune Publishing employees Monday, but only those employed for eight or more years are eligible. Details of the scope and terms of the buyout were not immediately disclosed, but participation is designed to “avoid turning to company-wide reductions of the workforce as a last resort,” Tribune Publishing CEO Tim Knight said in an email to employees.
“While it is our desire to retain all of our talented employees, we must confront and plan for the significant financial hurdles ahead,” Knight wrote.
Knight did not immediately respond to an interview request.
Alden, a secretive New York hedge fund with a reputation for dramatic cost-cutting across its growing media empire, took a 32% stake in Tribune Publishing in November.
Two Alden representatives subsequently were added to the newspaper company’s board, expanding it to eight members. As part of that agreement, Alden is restricted from increasing its stake in the company to more than 33% until June 30.
Tribune Publishing, which owns the Chicago Tribune and other major newspapers, is offering the voluntary separation as the industry struggles with secular revenue declines in the digital media age. While Tribune Publishing has achieved growth in its digital-only subscriptions, it continues to receive a “significant amount” of its revenue from its declining legacy print business, Knight said in the email to employees.
“Since we remain committed to extending the life of those products and services and to serving our home delivery subscribers, we need to anticipate continued print revenue declines by reducing our expenses,” Knight wrote.
Tribune Publishing had about 4,100 full-time employees at the end of 2019, according to the company.
In addition to the Chicago Tribune, Tribune Publishing owns the Baltimore Sun; Hartford Courant; Orlando Sentinel; South Florida Sun Sentinel; the New York Daily News; the Capital Gazette in Annapolis, Maryland; The Morning Call in Allentown, Pennsylvania; the Daily Press in Newport News, Virginia; and The Virginian-Pilot in Norfolk, Virginia.
Launched in 2007, Alden owns about 200 publications through an operating company now known as MediaNews Group, formerly Digital First Media. The chain has come under fire for sweeping layoffs at its newspapers, including major dailies such as the Denver Post, San Jose Mercury News and the St. Paul Pioneer Press, as well as smaller weeklies.
The Chicago Tribune Guild, the union that represents newsroom employees at the Chicago Tribune and suburban publications, issued a statement Monday regarding the buyout offer.
“We’re still learning about the buyout offer company executives announced this morning and gathering the information we need to help our members make good decisions,” the Guild said.
