In a conference call that included more than 350 participants Thursday, top executives at the Tribune Co. ? including Chairman and Chief Executive Officer Sam Zell ? admitted that revenues for the new, employee-owned company had been lower than expected and that a “divestiture” of some core assets was now under serious consideration.
Zell insisted, however, that anticipated income nevertheless would be sufficient to meet the merger?s credit obligations due this year.
“Revenue trends are significantly worse than expected,” Zell updated his audience, noting that the “flight of advertisers” to the Internet continues while company broadcasting revenue is ahead of 2007 numbers. “A great deal of this has to do with erosion of the classified side of the newspaper print business,” Zell said. “We?re expecting a double-digit decline in print advertising this quarter.”
Classified advertising makes up 33 percent of the Tribune Company?s total advertising revenue.
“A significant erosion in the first quarter has certainly put our plans into some question,” Zell said, “and we are forced to consider the possible divestiture of some of our assets.”
Zell made no mention of The Sun, which a group of local investors wants to buy, as a candidate for sale, but said he was in discussion with several parties interested in buying the company?s Newsday property on Long Island.
Reviewing disappointing 2007 financials released earlier this year while noting that first-quarter 2008 numbers would not be released until May, Zell stressed his optimism about the company?s prospects, adding that the organization is determined to retool from a stodgy, top-down conglomerate to a vibrant, employee-empowered, incentive-based, synergistic company.
“We have a positive employee base determined to take the company to a new level,” Zell said, stating that he personally had read and answered more than 3,000 e-mail suggestions sent to him from employees.
Randy Michaels, Zell?s head of broadcasting and interactive services, also reported positive initial results in remaking the company?s culture into that of a 21st-century media entity.
