In a signal that Alden Global Capital is moving quickly to take control of the company, Tribune Publishing announced Monday that CEO Tim Knight is leaving and its board chairman is relinquishing that title.
Alden purchased a 32% stake in the company in November, enough to signal takeover intent.
As Lee Enterprises was announcing its purchase of Warren Buffet’s BH Media a week ago, Alden reported a 5.9 percent stake in that company as well. That smaller share may be a first indicator that Alden will buy more, but is not enough to push for similar cuts to those in progress at Tribune.
In a memo to staff, Knight did allude to the need to cut costs as financial pressure in the industry continues. And the release said the company will look to “streamline its real estate footprint” — both hallmarks of how Alden has run its current roster of newspaper properties, operating as Digital First Media.
Last month, Tribune said that it would offer buyouts to employees with eight or more years experience. It is unclear how large a reduction of workforce the company is shooting for. Layoffs often follow if buyouts do not yield the target number.
Alden gained its position in Tribune mainly through buying a stake held by former chairman Michael Ferro. Since then, Alden got two seats on Tribune’s board and also agreed not to buy any more shares through June 30.
But owning nearly one-third of Tribune stock gives the hedge fund plenty of leverage right now. It could gain outright control by buying another 19 percent or influencing other institutional shareholders to join in a takeover or forcing a sale.
Alden has a well-earned reputation for running its properties on the cheap, including deep newsroom cuts.
Two veteran Chicago Tribune reporters took the unusual step of publishing a New York Times op-ed, arguing that a wealthy local individual or group should buy the Tribune instead.
All of Tribune Publishing stock plus its debt is valued at $584 million, according to Yahoo Finance. Typically a bidder for the whole company would need to pay a substantial premium over that or make a big offer for the Chicago Tribune alone.
Knight is a veteran Tribune executive who became CEO just over a year ago. He was pursuing a fairly standard digital transition program, he told me in an interview last year. Terry Jimenez, chief financial officer, succeeds Knight.
Alden made an unsuccessful bid last year to take over Gannett, which was later acquired by the parent company of the GateHouse chain.
This story has been updated to correct the spelling of Terry Jimenez’s name.
Rick Edmonds is Poynter’s media business analyst. He can be reached at redmonds@poynter.org.
