New York Daily News in ICU?

[LanceyHoward]

Tronc saw a first quarter reduction decline in cash flow of nine million dollars from the the first quarter of 2017. They blamed the decline in cash flow on digital increstments and the Daily News.

Control of the company just passed from Metz, who was fired and sold his 26% share of the company to the McCormick Trust. These McCormicks are distant relates of the founding family and very old Chicago money.

I wonder how long they will be willing to carry the losses at the News. Especially since the Daily News seems to have a dismal on-line strategy. A monthly subscription goes for .99 cents.

One of the reasons that the Tribune bought the Daily News is that previous owners had built a very efficient and modern plant. Tronc is moving the printing for Allentown and Hartford tot he plant. But Tronc can always find someone else to print those papers or just sell them to Gatehouse.

 

[YankeeFan]

I will not shed a tear if that newspaper is no longer here, because I think we need a better civic discourse. Their presence in our society, unfortunately, is harmful.

 

[tapintoamerica]

I will not shed a tear if that newspaper is no longer here, because I think we need a better civic discourse.j Their presence in our society, unfortunately, is harmful.

Yeah, but think of all the great tabloid headlines we will miss.
"Ford to City: Drop Dead"
"Good Morning, Baghdad"
"Rot in Hell"

 

[The Big Ragu]

I find it difficult to believe that they would take on something with the troubles the Daily News had, and only 7 or 8 months later say, "Oh, we need to get rid of this."

I don't follow Tronc, but when you say, "They blamed the decline in cash flow on digital increstments and the Daily News," what specifically was the company saying? Declining cash flow as a metric can be a negative or a positive thing. It very well may be a negative thing in the case of Tronc, because the company doesn't earn a ton. But. ... For example, Tronc dropped something like $60 or $70 million to buy a majority stake in bestreviews.com during the quarter. That's money going out the door and would impact cash flow. It also wouldn't necessarily a bad thing (it might end up being, but it's investment -- it either contributes to the bottom line at some point, or it doesn't). It's why I am curious about what you mean by "blaming" the Daily News, or what they specifically said. I know the Daily News launched that paywall you mentioned recently, and supposedly, they were exceeding expectations for digital subscribers. I don't believe Tronc breaks out income property by property, but when they took over the Daily News, it was losing something like $20 or $30 a million a year. So they knew what they were taking on. Zuckerman had actually started doing cuts and supposedly had stemmed the losses a bit. Tronc continued with cuts, I believe.

I am sure there is a plan there -- whether it is a good plan or a bad one. There have been rumors of the Bank of Japan money-creation bubble machine being the ultimate resting place for Tronc -- via Softbank. So maybe you are right about Gatehouse. But that doesn't put the Daily News in the ICU, at least imminently. In fact, Softbank's bags of freshly-printed yen allows it to carry along zombie companies -- things that are not profitable, have few prospects of ever being profitable, but are being kept alive via the world's monetary mandarins. It's how Gatehouse ended up with Softbank in the first.

 

[jr/shotglass]

"Rot in Hell"

Good headline for a Tronc acquisition.

 

[LanceyHoward]

I find it difficult to believe that they would take on something with the troubles the Daily News had, and only 7 or 8 months later say, "Oh, we need to get rid of this."

I don't follow Tronc, but when you say, "They blamed the decline in cash flow on digital increstments and the Daily News," what specifically was the company saying? Declining cash flow as a metric can be a negative or a positive thing. It very well may be a negative thing in the case of Tronc, because the company doesn't earn a ton. But. ... For example, Tronc dropped something like $60 or $70 million to buy a majority stake in bestreviews.com during the quarter. That's money going out the door and would impact cash flow. It also wouldn't necessarily a bad thing (it might end up being, but it's investment -- it either contributes to the bottom line at some point, or it doesn't). It's why I am curious about what you mean by "blaming" the Daily News, or what they specifically said. I know the Daily News launched that paywall you mentioned recently, and supposedly, they were exceeding expectations for digital subscribers. I don't believe Tronc breaks out income property by property, but when they took over the Daily News, it was losing something like $20 or $30 a million a year. So they knew what they were taking on. Zuckerman had actually started doing cuts and supposedly had stemmed the losses a bit. Tronc continued with cuts, I believe.

I am sure there is a plan there -- whether it is a good plan or a bad one. There have been rumors of the Bank of Japan money-creation bubble machine being the ultimate resting place for Tronc -- via Softbank. So maybe you are right about Gatehouse. But that doesn't put the Daily News in the ICU, at least imminently. In fact, Softbank's bags of freshly-printed yen allows it to carry along zombie companies -- things that are not profitable, have few prospects of ever being profitable, but are being kept alive via the world's monetary mandarins. It's how Gatehouse ended up with Softbank in the first.

But the CEO and Largest shareholder, Micheal Ferro just sold out. Buying the Daily News was his idea. The McCormick Trust, which bought his 26% interest in the company does not like the plan, they can pressure management to abandon it.

This is a quote from the earnings release: "Adjusted EBITDA for first quarter 2018 was $24.4 million, versus $33.7 million in the first quarter 2017, due primarily to an anticipated negative first quarter 2018 adjusted EBITDA at the NYDN and digital investments." I should have said EBITDA rather than cash flow.

The first quarter results are consistent with historical losses of 20 to 30 million dollars a year. While cuts have been made at the Daily News advertising revenues continue to drop industry wide.

The comments about Gatehouse refer to Tronc selling Allentown and Hartford. Gatehouse is not going to buy a paper that does not have a positive EBITDA,.

 

[The Big Ragu]

1) There is a difference between cash flow and earnings.
2) Micheal Ferro wasn't CEO. He was the chairman. Again, there is a difference. He was forced out for allegedly making unwanted sexual advances toward some women.
3) How do you know Sargent McCormick does not like the plan (I assume you mean the Daily News)? That may or may not be true. ... I am not in his head. But reason tells me that people usually don't drop a couple hundred million dollars to own a big piece of something they don't like. There were stories that he was actually talking to other large shareholders about buying them out so he can accumulate an even larger stake. I have no idea how true that is. But I'd guess there is a larger plan to this for him. ... and we're not privy to it.
4) Gatehouse isn't buying the Daily News. Softbank, however, might buy Tronc -- all of it. At least, there seems to be a lot of smoke around that, because the rumor has been out there for months, and Tronc's stock popped something like 10 percent in one day when it was first floated in a news story. It could be as simple as Sargent McCormick wanting to accumulate stock, thinking he might be able to drive up the price someone will pay.

 

[LanceyHoward]

1) There is a difference between cash flow and earnings.
2) Micheal Ferro wasn't CEO. He was the chairman. Again, there is a difference. He was forced out for allegedly making unwanted sexual advances toward some women.
3) How do you know Sargent McCormick does not like the plan (I assume you mean the Daily News)? That may or may not be true. ... I am not in his head. But reason tells me that people usually don't drop a couple hundred million dollars to own a big piece of something they don't like. There were stories that he was actually talking to other large shareholders about buying them out so he can accumulate an even larger stake. I have no idea how true that is. But I'd guess there is a larger plan to this for him. ... and we're not privy to it.
4) Gatehouse isn't buying the Daily News. Softbank, however, might buy Tronc -- all of it. At least, there seems to be a lot of smoke around that, because the rumor has been out there for months, and Tronc's stock popped something like 10 percent in one day when it was first floated in a news story. It could be as simple as Sargent McCormick wanting to accumulate stock, thinking he might be able to drive up the price someone will pay.

1. I know there is a difference between cash flow and earnings.
2. Ferro appeared to have been running the show at Tronc. He was the largest stockholder with a quarter of the company.
3. I have no idea what the McCormick trust thinks about the plan to revive the Daily News. That is why I put a question mark in my title. But one way that people have made money on their investment in a company is to jettison units that have negative EBITDA.
4. And maybe Softbank will buy Tronc directly rather than through Fortress. And if they do will they continue to pump money into a paper with negative EBITDA?

And a question for you.

What is the typical life expectancy of a media outlet with negative EBITDA and declining revenues in a public company?

 

[Azrael]

I will not shed a tear if that newspaper is no longer here, because I think we need a better civic discourse. Their presence in our society, unfortunately, is harmful.

Certainly true of the Post, which under Murdoch became a British tabloid, an instrument of hyperconservative fiction, and a racist promulgator of blue collar nightmares.

Not true of the Daily News, which remains largely politics-neutral. A general interest tabloid that's easy to fold and read on the subway.

 

[YankeeFan]

Certainly true of the Post, which under Murdoch became a British tabloid, an instrument of hyperconservative fiction, and a racist promulgator of blue collar nightmares.

Not true of the Daily News, which remains largely politics-neutral. A general interest tabloid that's easy to fold and read on the subway.

LOL.

 

[Azrael]

LOL.

Its political neutrality - and its colorless lack of hot takes - is one of the reasons the DN is failing.

As to the nature and purpose of the NY Post, ask yourself why Rupert Murdoch - not an idiot - keeps alive a newspaper that loses something on the order of $50 million a year.

LOL.

 

[YankeeFan]

As to the nature and purpose of the NY Post, ask yourself why Rupert Murdoch - not an idiot - keeps alive a newspaper that loses something on the order of $50 million a year.

Is it for reasons similar to why Mort Zuckerman sustained losses at the NYDN for over 20 years?

 

[lcjjdnh]

Certainly true of the Post, which under Murdoch became a British tabloid, an instrument of hyperconservative fiction, and a racist promulgator of blue collar nightmares.

Not true of the Daily News, which remains largely politics-neutral. A general interest tabloid that's easy to fold and read on the subway.

While that particular quote was about the Post, Hizzonner isn’t too keen on the News either.

Mayor de Blasio’s Emails, Uncensored and Unforgiving

Mr. de Blasio wonders, in a back-and-forth with his press aides, an outside adviser and his wife, Chirlane McCray, what it would mean for his administration politically should The Daily News become a more diminished entity, perhaps only publishing online.

“That would be good for us, right?” Mr. de Blasio wrote, adding that it might hasten the demise of The New York Post as well. “Prob just wishful thinking.”

The exchange in 2015, amid discussion of a sale of The Daily News, reflects the degree to which Mr. de Blasio had soured on New York City’s news organizations, especially its newspapers, including The New York Times.

 

[Azrael]

Mort sold the paper. That's why Tronc has it.

But was it ever an effective mover in Democratic politics?

It certainly didn't keep conservatives or centrists like Rudy Giuliani or Mike Bloomberg out of office.

 

[YankeeFan]

Mort sold the paper. That's why Tronc has it.

Sure. But he owned it for over 20 years, suffering losses the whole time. I'm not sure he ever turned a profit with the Atlantic or U.S. News & World Report either.

But was it ever an effective mover in Democratic politics?

It certainly didn't keep conservatives or centrists like Rudy Giuliani or Mike Bloomberg out of office.

Both Murdoch's Post, and Zuckerman's News served the financial, political, and social interests of their owners, neither of which lined up specifically with national political politics.

Murdoch supported Hillary Clinton's political career.

Zuckerman, with huge investments in New York City real estate, was supportive of Giuliani, and hired Richard Schwartz as his editorial page editor.

 

[Michael_ Gee]

Murdoch's Post impact on New York politics is negligible now, except it can **** off the mayor. Big deal. The News has a little more local impact, because it has a trifle more coverage of the real NYC of 2018 rather than Rupert's fever dreams of a city overrun by subhumans who had the misfortune not to be born white. But both of them are chasing a readership that's either in Suffolk County, south Florida, or one of the outer boroughs' many large cemeteries. Once Rupe kicks the bucket, his kids will kill the Post before the eulogy.

 

[Shropshire Slasher]

The Post is not afraid of having some fun at the Orangutan's expense on the cover, even if the editorial staff do support him sub rosa.

 

[lcjjdnh]

But the CEO and Largest shareholder, Micheal Ferro just sold out. Buying the Daily News was his idea. The McCormick Trust, which bought his 26% interest in the company does not like the plan, they can pressure management to abandon it.

This is a quote from the earnings release: "Adjusted EBITDA for first quarter 2018 was $24.4 million, versus $33.7 million in the first quarter 2017, due primarily to an anticipated negative first quarter 2018 adjusted EBITDA at the NYDN and digital investments." I should have said EBITDA rather than cash flow.

The first quarter results are consistent with historical losses of 20 to 30 million dollars a year. While cuts have been made at the Daily News advertising revenues continue to drop industry wide.

The comments about Gatehouse refer to Tronc selling Allentown and Hartford. Gatehouse is not going to buy a paper that does not have a positive EBITDA,.

Ferro sale to McCormick fell through:

McCormick Media's deal to buy Michael Ferro's Tronc stake falls through

 

[The Big Ragu]

Wow. It sounds like McCormick made the offer without having financing lined up. Now he has to pay Ferro a cool $1 million.

 

[LanceyHoward]

According to the first quarter Tronc earnings call the sale of the LA Times has also not been finalized. According to Tronc management the hangup has been that operations are so integrated with the rest of the company that hundreds of service agreements have to be worked out. The parties have to determine how to separate operations.