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Tribune Announces Further Expense Reductions
Reduces executive compensation,
freezes salaries for others
October revenues down
8%
CHICAGO, November 14, 2001 --
Tribune Company (NYSE:
TRB) today announced a series of cost cutting measures
related to compensation, including:
- Approximately 140 senior managers across
the company will take a 5% salary reduction, effective January
1, 2002. The group includes John Madigan, chairman and chief
executive officer, Dennis FitzSimons, president and chief
operating officer, Donald Grenesko, chief financial officer
and Jack Fuller, David Hiller and Pat Mullen, the presidents
of the company's three business groups.
- Effective January 1, 2002, the salaries
of all Tribune employees not covered by a collective bargaining
agreement will be frozen for 12 months. However, these employees
will be eligible for a special one-time grant of Tribune
stock options based on merit. The six executives named above
will not be eligible for this one-time stock option grant.
The company also will be seeking compensation cost savings
from union-represented groups.
- Cash bonuses for 2001 will be minimal and
the six executives named above will not receive bonuses
for 2001.
- Hiring will be limited to critical functions;
the goal is to reduce staff through attrition.
"It's hard to remember when there has
been a stronger need to deliver quality news and information
to our readers, listeners and viewers," said John Madigan.
"At the same time the advertising marketplace is under
tremendous pressure. In light of this, we are taking strong
cost-cutting actions, over and above what we already have
done. However, we are adding an important long-term incentive
in the form of merit-based stock options to recognize the
important contributions of our employees. By managing our
businesses well, we are positioning Tribune to come out of
this downturn with industry-leading journalistic and financial
performance."
In addition to reducing compensation, Tribune
will further reduce corporate expenses and all of the company's
business units will implement further cost-saving measures.
"During the last year we have realized
operational cost-savings throughout our business units, lowered
capital spending, left open positions unfilled and completed
a voluntary retirement program," said Dennis FitzSimons.
"Our people are among the best, and they operate some
of the strongest local media franchises in the industry. We
are facing the challenges of the current environment head-on.
We will cut costs and also put greater emphasis on our ad
sales efforts. Most importantly, we will not compromise the
quality of journalism that we have always delivered to our
readers, listeners and viewers."
Period 10 Summary
In its summary of revenues and newspaper advertising
volume for period 10, ended October 28, 2001, Tribune reported
consolidated revenues of $410 million, down 8 percent from
last year's $445 million. Year-to-date consolidated revenues
were down 7 percent to $4.3 billion, from a pro forma $4.6
billion during the same period in 2000.
Tribune's publishing and interactive revenue
as well as newspaper advertising volume for 2000 are reported
on a pro forma basis only for year-to-date comparisons. Pro
forma results assume that the Times Mirror acquisition occurred
at the beginning of 2000.
Publishing revenues decreased 10 percent in
October to $298 million, down from last year's $330 million.
Year-to-date publishing revenues were down 7 percent. Total
advertising inches decreased 4 percent in October and 6 percent
year-to-date. Preprint pieces were down 2 percent in October
but on a year-to-date basis were up 3 percent.
For October, retail advertising revenue decreased
7 percent due to declines in the department stores and electronics
categories. Full run retail volume was down 7 percent. National
ad revenue was down 13 percent because of weakness in the
entertainment / movies, financial and high technology categories,
as full run national volume declined 15 percent. Classified
advertising revenue was down 22 percent due primarily to a
decline in the help wanted category. Full run classified volume
was down 5 percent for the period.
Broadcasting and Entertainment group revenues
decreased 4 percent to $106 million, down from $110 million
in October 2000. Television revenues decreased 6 percent in
October due to the continued soft television advertising economy.
Year-to-date group revenues were down 6 percent to $1.1 billion,
compared with $1.2 billion in 2000.
Tribune Interactive revenues grew 27 percent
to $5.5 million in October, up from $4.4 million last year
due to growth in classifieds. Year-to-date interactive revenues
increased 25 percent to $49 million, up from $39 million in
2000.
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TRIBUNE (NYSE:
TRB) is one of the country's premier media companies,
operating businesses in broadcasting, publishing and on the
Internet. It reaches more than 80 percent of U.S. households,
and is the only media company with television stations, newspapers
and Web sites in the nation's top three markets. Tribune media
span 23 major-market television stations, including national
superstation WGN-TV; 12 market-leading daily newspapers, including
the Los Angeles Times, Chicago Tribune and Newsday; and news
and information Web sites in 18 of the nation's top 30 markets.
This press release contains certain comments
or forward-looking statements that are based largely on the
company's current expectations and are subject to certain
risks, trends and uncertainties. Such comments and statements
should be understood in the context of Tribune's publicly
available reports filed with the SEC, including the most current
annual report, 10-K and 10-Q, which contain a discussion of
various factors that may affect the company's business. These
factors could cause actual future performance to differ materially
from current expectations.
Tribune Company is not responsible for
updating the information contained in this press release beyond
the published date, nor for changes made to this document
by wire services or Internet service providers. More information
on Tribune is available on the Internet at www.tribune.com. |
