Tribune, the US newspaper group, on Thursday appeared to soften towards its largest shareholder as it reported another period of declining earnings.
Dennis FitzSimons, Tribune chief executive, struck a conciliatory tone when asked about his dealings with the Chandler family, which last month publicly blasted the company’s strategy and called for it to spin off The Los Angeles Times, Newsday and other newspapers from its broadcast stations.
“We will look forward to working with the Chandlers. They’re an important shareholder,” said Mr FitzSimons. He added: “We will look to do something that makes sense for both sides.”
Tribune would not expand on the remarks but a person familiar with management’s thinking suggested that they were still committed to their original strategy and were not preparing for the more radical action favoured by the Chandlers.
For the second quarter, Tribune’s net income dropped to $85.7m, or 28 cents per share, from $231m, or 73 cents per share, for the same period a year ago. The results were hit by a $90m write-down from the sale of television stations in Albany and Atlanta. Based on continuing operations, the company earned $163.9m, a 29 per cent drop from last year.
Tribune has attempted to reverse the decline by selling non-core assets, cutting costs across its newspapers and investing in higher-growth online activities.
Mr FitzSimons said on Thursday that he was confident that the plan was moving forward.
The clash with the Chandlers has been seen as a broader debate about the proper management and ownership structure for a maturing newspaper industry as it struggles to adapt to the digital era.
However, it has also been muddied by a narrow dispute over the tax implications of unwinding several jointly-owned partnerships created when Tribune bought the Chandlers’ stake in the Times-Mirror company.
Tribune’s second-quarter results revealed many of the pressures bearing down on the broader newspaper industry. Its circulation revenue fell 5 per cent, or $8m, compared to the same period a year ago.
Meanwhile, advertising revenues were flat, held down by a 7 per cent drop in the national category, which includes entertainment and automotive.
Tribune’s results came a day after Gannett, the largest US newspaper publisher, reported an 8.3 per cent decline in profits, which it blamed on weak advertising sales and rising newsprint costs.