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October 19, 2006 9:43 pm
Tribune Company suffered from Hollywood’s dramatic pullback from newspaper advertising as it reported another quarter of weak results.
Tribune said that advertising from the film studios had declined 17 per cent this year at the Los Angeles Times, its biggest title, including a 10 per cent drop in the third quarter from last time. “Part of the decline is due to smaller ads, and shorter theatre runs where we’re not getting ads for as many weeks as we used to,” said Scott Smith, president of Tribune Publishing.
Film advertising accounts for about 10 per cent of revenues at the Los Angeles Times, and its disappearance has been an important factor contributing to the turmoil at the newspaper and its parent company.
This month, Tribune fired the Times’ publisher after he resisted demands for further job cuts. Tribune is mulling a possible sale or break-up of the entire media group under pressure from frustrated shareholders.
Dennis FitzSimons, Tribune’s chief executive, offered few details of that review, except to say that it was “under way”. For the third quarter, the company’s earnings jumped to $162.2m from $21.9m a year ago, based largely on a one-off gain from the restructuring of two partnerships it inherited when it acquired Times-Mirror in 2000.
Yet Tribune’s underlying operations showed further deterioration. Revenues in its publishing division fell 2 per cent to $956m as readers and advertisers continued to abandon papers such as the Times, New York’s Newsday and the Chicago Tribune.
Its broadcasting group, which includes television stations in New York, Los Angeles and Chicago, saw operating cashflow drop 15 per cent to $108m in spite of an increase in political advertising.
Mr FitzSimons said Tribune would press ahead with a strategy of cutting costs and investing more resources in internet businesses.
The difficult environment for newspapers was also underscored by the New York Times Company on Thursday, which said its third-quarter earnings had fallen to $14m from $23.1m a year ago on weak print advertising and severance costs.
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