Downsizing and layoffs have been a way of life in the newspaper business for more than a decade, and nothing brings zest to the process like a consolidation with overlapping redundancies and economy-of-scale efficiencies.
Tribune Publishing announced on Thursday that it was buying U-T San Diego, eight weeklies and assorted websites for $85 million in cash and stock, and combining them with the Los Angeles Times in the newly-formed California News Group.
Times Publisher and CEO Austin Beutner, who will be in charge of the group, said the two papers would maintain separate editorial departments.
Jeff Light, president and editor of the San Diego paper, extolled the virtues of consolidation but included a blunt warning: “The business opportunity, and the journalistic opportunity, is very big. . . . Without a doubt, there will be some savings—which, unfortunately, is another way of saying layoffs.”
The Times said Beutner declined to comment on that. He also didn’t directly address a name change for U-T San Diego, which was the San Diego Union-Tribune for many years before being rebranded by real estate developer Doug Manchester after he bought the newspaper for around $110 million in 2011.
Newspapers, which are still experiencing declines in readership and revenues, have been buying each other up in a desperate attempt to cut expenses by sharing operations like marketing, printing and delivery while waiting for elusive online revenues to materialize. Precise revenue numbers are hard to come by, but print overwhelmingly still pays the bills despite a major industry shift in resources to attract an online audience.
Tribune Publishing is a new company, spun off by “Big Trib” (aka Tribune Media) last year in a final smackdown by a multimedia parent company that didn’t always do the right thing by its eight newspapers. Big Trib saddled Trib Pub with tens of millions in debt, kept the valuable real estate and snatched two affiliated online companies that made the company $86 million in 2012.
The Trib Pub stock price has dropped 36% since its initial offering. The big company newspapers other than the Times are: Chicago Tribune, Baltimore Sun, Orlando Sentinel, Sun Sentinel, Hartford Courant, Allentown Morning Call and the Daily Press (in Virginia).
Media analyst Ken Doctor at NiemanLab, who warned that the deal could still fall apart, wrote that he doesn’t think this is the end of Southern California newspaper consolidation. The Register, headquartered in Orange County paper, is having a rough go of it, despite buying the Riverside Press-Enterprise 18 months ago. And the Los Angeles News Group (LANG) is about to become the property of a hedge fund, Apollo Global Management.
The Times is the biggest newspaper in California, with a claimed circulation of 628,910 daily and 944,795 Sunday, according to Doctor. Real paid circulation figures can sometimes be hard to come by. The San Diego paper claims 183,456 daily and 268,038 on Sunday.
The Times daily circulation used to be over a million and one publisher in the ‘90s said his goal was 2 million customers. He didn’t make it, and launched a new round of downsizing and layoffs.