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Los Angeles Times and Chicago Tribune lead newspapers-only publishing company

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By Noel Young, Correspondent

August 5, 2014 | 5 min read

Two of America’s best-known newspapers, the Los Angeles Times and the Chicago Tribune set sail today as the flag carriers of a major new newspaper publishing company.

Jack Griffin: 'Brusque' management style

The pair have developed in the background of “years spent in the shadow of bankruptcy proceedings, management turmoil and the Tribune Company’s more prominent TV stations, 42 in all,” as the New York Times put it.

The print properties are being spun off into a new company, Tribune Publishing, which will begin trading on the New York Stock Exchange today (5 August) .

The Los Angeles Times , America’s fourth largest paper and the biggest regional daily, has a circulation around 659,000 on weekdays and 954,000 on Sunday. The Chicago Tribune has recently reported a digital boost to its circulation to 439,731 daily and 789,915 on Sunday.

Other newspapers being spun off include The Hartford Courant, The Sun Sentinel in Fort Lauderdale and The Orlando Sentinel, both Florida, and The Baltimore Sun.

The parent Tribune Company plans to continue as essentially a television business.

Tribune Publishing will be born in “a punishing print environment,” says the NYT (which should know a thing or two about that).

Tribune Publishing will start off with $350m in debt, of which $275m will pay a one-time cash dividend to Tribune’s shareholders.

Says the NYT “That falls far short of the enviable $2bn cash cushion Rupert Murdoch’s News Corporation gave its print division last year, but far better than the $1.3bn in debt that Time Inc. started with when it was spun off in June.”

Jack Griffin, the new Tribune Publishing CEO has said,“We will be a company that has a greater percentage of its revenue coming from digital sources.”

Spinning off troubled print divisions has become a popular model for big media companies in the last year, said the NYT.

News Corporation spun off its newspapers . Time Inc, suffering management upheaval and sinking profits, parted ways with its parent company, Time Warner.

Reed Phillips, a managing partner for DeSilva & Phillips, a media investment bank, struck a positive note: “Companies like Tribune Publishing will have a better chance of performing better outside ofthe Tribune Company because, when they’re embedded within a large media company, all of the free resources go to the entertainment properties.”

The spinoff represents a fresh start for Tribune’s newspapers after a tumultuous four-year bankruptcy process that ended early last year.

At one point the newspapers appeared to be in play and potential buyers like the Koch brothers expressed interest. But eventually Tribune decided to keep the publishing assets and form a new company.

Griffin is a media executive with a long history in newspapers and magazines,.His father was a reporter for The Boston Post and grandfather was its editor in chief.

Griffin worked his way up to run Parade magazine from 1999 to 2003. While there he worked with 350 newspaper companies who took Parade as part of their weekly offering.

In 2013, Griffin was co-leader of a group that unsuccessfully tried to buy The Boston Globe. He is a keen reader, “That’s the bedrock of the business, the content,” Griffin has said. “I care deeply about that.”

The magazine company Meredith, where he was president from 2004 to 2010 saw its revenues grow from $808m in 2003 to $1.27bn in 2008 before the recession hit.

At Time Inc which he joined in in 2010 he was the first chief executive from outside the company. Colleagues called his management style brusque.

The NYT said some employees said he made them uncomfortable by interjecting faith — he is Roman Catholic — into meetings and conversations. Griffin was also criticised by some Time Inc. employees for prizing loyalty in employees over talent.

Six months after he joined , Jeffrey L. Bewkes, chief executive of the parent company Time Warner, asked Griffin to leave and publicly rebuked him for his management style.

Tribune Publishing’s overall revenue was $1.8bn in 2013, and the plan is to gradually shift to more digital-only subscribers and have more digital-only pricing.

A spokeswoman for the billionaire Koch brothers, confirmed in an email that their company was no longer interested in buying Tribune newspapers.

Griffin commented: “We’re running these papers in a way that we intend to run them for a long haul. Of course, in a public company environment, there are lots of things that are possible,” he said. “But we’re focused on optimising the company.”

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