Field Study: Tronc

By Luke Winter

History

Tronc, formerly Tribune Publishing, is a print and online media publishing company that owns 11 national news papers––from the Chicago Tribune and Los Angeles Times to the San Diego Union Tribune––as well as over 30 local newspapers in these metropolitan areas. It is now the nation’s third largest newspaper publisher, behind Gannett and the McClatchy Company.

Tribune Publishing originally operated as the publishing division of the Tribune Company, which was created in 1847. In 2008, Tribune Company announced bankruptcy. After emerging from bankruptcy in 2012, Tribune Publishing spun off from Tribune Company. Tribune Publishing then became a separate public company in August 2014. In 2015, Tribune Publishing acquired several major newspapers throughout the country. In June of 2016, the company rebranded itself as Tronc, or “Tribune online content”.

Structure

        Tronc is a for-profit publicly traded media conglomerate operated by CEO Justin C. Dearborn.

Industry Statistics

Demographics

Tronc currently draws a monthly audience of 65 million viewers from across the nation with its multiple national and local newspapers and online content. The media outlets owned by Tronc are each aimed at different demographics, depending on location, and whether the outlet is aimed at national or local news. According to comscore.com, Tronc (listed as Tribune Publishing) was listed as number 50 in the nation’s top 50 U.S. digital media properties for February 2016, receiving 57 million unique visitors during the month.

Finances

In Tronc’s 2016 Third Quarter Financial Report, the company reported a financial loss of $10 million. The company’s total revenue for the third quarter was $378 million, which is down 6.8% compared to last year’s third quarter. The company’s total operating expenses for the third quarter was reported at $377 million.

For this year’s third quarter, advertising revenues were down 10.9% from the previous year, with the company reporting only $202 million in advertising revenues.

Circulation revenues for the third quarter were also down, with a 1% decrease from last year’s third quarter.

Company Worth

The company is currently worth $12.67 a share and is valued at $461 million. In April, Gannett Company made a bid to buy Tronc for $400 million but shareholders denied the offer. Gannett raised the offer to $800 million in May, but then dropped the bid altogether on November 1, 2016.

Innovation and Excellence

        Tronc has earned 92 Pulitzer Prizes and maintains the slogan From Pixels to Pulitzers. Tronc’s Chief technology officer and chief digital officer recently announced initiatives to increase video to be 50% of all content by 2017.  Furthermore, they have announced initiatives to increase the use of computer technology, such as machine learning and artificial intelligence.

Conclusion

        I would be skeptical buying Tronc. The Third Quarter Financial Report showed more losses than gains from last year, reporting a $10 million loss. Furthermore, Gannett’s decision to drop the bid for Tronc almost 3 weeks ago solidifies my skepticism. If Gannett, one of the most powerful media conglomerates in this country chose not to buy Tronc, then it would be unwise of me not to follow the precedent. Furthermore, even though Tronc is the third largest newspaper conglomerate, it is listed as last in comScore’s top 50 digital media companies. Although Tronc currently has plans to innovate, with the company reporting financial losses I am skeptical the company will have the financial stability to ensure these initiatives come to fruition. Dwindling advertisement revenues and the subsequent bankruptcy is a story too common with media conglomerates.

        Furthermore, I would not want to work for Tronc. Rigid hierarchy and structure maintain the company’s massive size, which wouldn’t provide the most stimulating environment for me as an employee. Furthermore, the financial stability of the company would make me nervous of bankruptcy, like its predecessor, Tribune Company, underwent.

        Although the company faces the common threats of shrinking ad revenues and decreased circulation, it is possible for the company to succeed in the long run. This would depend on the company’s ability to innovate––and it says it will. Although I wouldn’t buy the company, there is hope for Tronc.

Luke Winter is a senior studying multimedia journalism. He plans on going to medical school after getting his undergraduate degree.

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