Posted on 05/02/2006 12:24:49 PM PDT by abb
Published: May 02, 2006 3:15 PM ET
CHICAGO Speaking at Tribune Co.'s brisk annual meeting Tuesday, Chairman, President and CEO Dennis J. FitzSimons told anxious shareholders that the newspaper and broadcast giant will "win" eventually -- but he could not guarantee the company will suffer the same fate as Knight Ridder Inc.
"As Knight Ridder found out, in this environment anything is possible," FitzSimons said in response to a question from an unidentified Tribune employee.
FitzSimons noted, however, that unlike Knight Ridder -- bought last month by The McClatchy Company in a $6 billion deal -- big blocks of Tribune stock is in friendly hands. The McCormick Tribune Foundation, for instance, owns a 14% stake, the Chandler Trusts own another 12%, and 9% is held by employees.
"That makes it a little less likely for us to face the situation that Knight Ridder did, but it is possible," FitzSimons said.
This year's bare-bones annual meeting represented a big break from recent decades in which the meetings have been high-tech, multi-media affairs held in posh local hotels with the proceedings broadcast by satellite to it properties around the nation.
Tuesday, shareholders met in a small auditorium in the company's Tribune Tower headquarters in Chicago. The 7th floor room held the TV studios of its WGN-TV station back in the 1950s, FitzSimons said. The satellite feed was replaced by a Web broadcast. The changes saved Tribune $200,000 on the cost of past annual meetings, FitzSimons said in a memo to employees last month, Crain's Chicago Business reported Monday.
Tribune stock has been hammered on Wall Street, like every other media company. It cut its workforce by 4% last year, 900 positions shed on top of the 600 jobs lopped off in 2004. Shareholders were meeting two weeks after Tribune announced that first-quarter 2006 revenues were down 1% from last year.
"As you can see, 2005 was clearly a difficult year for Tribune," FitzSimons said after CFO Donald C. Grenesko reviewed the bad financial news.
But Grenesko and FitzSimons said there was reason to be optimistic about the future. Grenesko noted that despite the huge tax bill from the ill-fated spin-off of the Matthew Bender book division it inherited from Times Mirror -- a bill Tribune paid off with bank borrowings -- the company's debt amounts to $2.8 billion, giving it a comfortable 2X debt-to-cash ratio.
FitzSimons said its free dailies were now attracting 3 million readers weekly, and had signed up 1,500 new print advertisers. The new union contracts at Newsday will save the paper $7 million this year, and $10 million annually for the next three years.
But FitzSimons made CareerBuilder.com exhibit number one in the case for optimism. He said the jobs site's monthly unique visitors now total 22 million--nearly double the 12 million visitors to Monster.com, the online pioneer in help-wanted. This year, CareerBuilder.com -- a partnership of Tribune, Knight Ridder and Gannett Co. -- will surpass Monster.com in revenue, he added.
"Everybody said we couldn't win with CareerBuilder -- and we did win," Fitzsimons says. "And we will win."
For all the grief Tribune has been getting from Wall Street analysts, this 40-minute annual meeting was as low-key as it was brief.
A shareholder proposal to elect all directors annually that was advanced by corporate gadfly Evelyn Y. Davis was, as expected, defeated. The peppery Davis herself was not present. In her place, Chicago businessman Martin Glotzer urged shareholders to follow the example of Chicago Tribune founder Joseph Medill.
"If Joseph Medill were here presiding over this meeting, we would have annual election of directors and we would have cumulative voting to give voice to minority stockholder interests," Glotzer said.
Four directors were re-elected at the meeting: FitzSimons; former Kraft President Betsy D. Holden; retired PepsiCo. North America Chairman Robert S. Morrison; and retired attorney William J. Stinehart Jr.
Mark Fitzgerald (mfitzgerald@editorandpublisher.com) is a senior editor at E&P.
Ping
So which stock would intelligent Freepers want in their Iras, 401ks or Keoughs? If one of your mutual funds owns a newspaper dinosaur stock versus Haliburton, ask the fund manager why?
fyi and indexing
Mickey Rooney?
>>Maybe someone will buy them, shut them all down and put them out of their misery...<<
Think of all the new warehouse space we would have...
Kinda resembles him, doesn't it? About 9 frames in that gif.
More info
Crain's ChicagoBusiness.com
Low stock price makes Tribune vulnerable to takeover: CEO
By Gregory Meyer
May 02, 2006
(Crains) Tribune Co. Chairman and CEO Dennis J. FitzSimons acknowledged Tuesday that the media companys weak stock price makes it potentially vulnerable to a bid from an outside buyer.
In the context of the pending sale of newspaper giant Knight Ridder Inc. to McClatchy Co., everything in this environment is possible, Mr. FitzSimons said at the companys annual shareholder meeting. Thats one of the reasons we have to operate as efficiently as we are operating right now and continue to look for efficiencies.
Tribunes shareholder base the Robert R. McCormick Tribune Foundation, the Chandler Trusts and company employees collectively own a 35% stake in the company could potentially complicate a takeover play.
But still, its very possible, Mr. FitzSimons said in response to a question submitted in writing by a company employee.
Investors have been raising the specter of takeover for months as Chicago-based Tribunes share price drifted to multi-year lows. The stock closed Monday at $28.57, down 39% since Mr. FitzSimons replaced John Madigan as chief executive on Jan. 1, 2003. Tribune is not the next Knight Ridder, unless its in the mid-$20s, wrote one Deutsche Bank analyst in a research note in mid-March.
Unlike Knight Ridder, no big shareholders are publicly urging Tribune to sell. But patience is wearing a little thin, said Barry Lucas, an analyst at Gabelli & Co. in Rye, N.Y. Still, I would characterize (a sale) as possible. Very possible would be a reach, in my view, Mr. Lucas said.
The meeting went off without fireworks in a converted TV studio inside Tribune Tower. A shareholder resolution calling for Tribunes board of directors to be elected annually instead of on staggered three-year terms was defeated by a margin of 53% to 46% of votes cast, with 1% abstaining.
Only three attendees rose to question Mr. FitzSimons: perennial corporate gadfly Martin Glotzer, a man from Wilmette angry about a couple of mistakes and omissions in the Chicago Tribune and a representative of the Rainbow/PUSH Coalition who pressed the company to make its executive ranks more diverse.
Kathryn C. Turner, the boards only African-American member and one of two female members, stepped down Tuesday in a previously announced resignation. The company has not yet set a timetable for replacing her, a spokesman said.
Mr. FitzSimons underscored management efforts to cut costs and find new revenue opportunities, noting that Internet revenue is expected to make up 6% of Tribunes publishing ad revenue this year and 12% of it in three years. About 65% of Tribunes $5.6 billion in revenue last year came from its newspapers and other publishing properties, while the rest came from broadcasting.
He did not address pressures to sell off Tribunes assets, which in addition to newspapers in 11 markets and TV stations in 26, include WGN-AM 720, the Chicago Cubs and stakes in CareerBuilder and the TV Food Network.
But recent operating results hung over talk of growth plans. Last years revenue was down 2.3%, while profit slipped 3.8%. In the first quarter of 2006, Tribune reported a profit of $102.8 million, down 28% from $142.8 million the year earlier.
2005 was clearly a difficult year for Tribune. A choppy advertising environment and continued competition from all media posed additional challenges, Mr. FitzSimons said. Nonetheless, as the media landscape evolves, newspapers and broadcast television remain very valuable tools for marketers.
In the end I reckon you got your six bloated whales trying to use their massive 50-500 year old technology to compete in the thermonuclear war known as information technology. A battlefield where combatants sometimes measure the half life of new technology in months.
Let's see, mid $20's is $25/share or a $3.38 drop from today's closing/falling value OF $28.38. The chart below shows that mid $20's might be reached by say the 4th of July and probably no later than Labor Day.
Excellent summary.
Now combine your summary with Grampa Dave's basic law of how to go broke if one runs a liberal business or service:
1. Attack President Bush 24/7 and turn away 62 million potential customers/his voters in 2004 as newspaper buyers and also in the fishwrap business potential advertisers into enemies, who will not buy your product or service. I will never run a for sale ad in any left wing dinosaur fishwrap, nor will I buy their biased attack pieces posing as news in their newspapers..
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