Week of turmoil at Tribune culminates with Ferro agreeing to sell for $208.6M

SHARE Week of turmoil at Tribune culminates with Ferro agreeing to sell for $208.6M

The Tribune Tower, at 435 N Michigan Ave. | File Photo: Chandler West/For Sun-Times Media

Round after round of layoffs in its newsroom as top executives of its parent company draw eye-popping salaries.

The chair of that company stepping down amid accusations of sexual harassment and then, on Friday, deciding to sell his stake altogether.

And, coming in June, a move away from what’s been the newspaper’s iconic home for the last 93 years.

From the outside looking in, life at the traditionally staid Chicago Tribune has in recent months resembled a daytime drama. So perhaps it should not have been a surprise when, for the first time in the newspaper’s 170-year history, staffers on Wednesday announced plans to launch a newsroom union.

“We’re doing this because we love the Tribune,” said Pete Nickeas, a Tribune staff reporter who has helped lead the push to unionize. “This is our way to advocate for ourselves. This is our way to make sure that no matter who our owners are … the newsroom is going to have a voice for itself.”

Several staffers said that efforts to unionize have buoyed a demoralized newsroom that’s seen its editorial staff cut from about 650 in the late 1990s to some 300 today.

“There are quite a few people who are wary, understandably, but most — the vast majority all along — have been very, very firmly in support,” said one veteran Tribune reporter who didn’t want her name used. “We feel really confident about that.”

Staffers say there isn’t one overriding issue that led to the decision to create a union — though two rounds of layoffs in which dozens of newsroom positions were eliminated hasn’t helped matters. Those layoffs included sports writers Chris Kuc and Paul Skrbina, as well as Washington D.C. correspondent Kathy Skiba, local media analyst Robert Feder reported last month.

Nickeas said the Tribune’s parent company, Tronc, clearly has money — it’s just that it’s going to “the top,” instead of “taking care of the people who make the Chicago Tribune what it is.”

That money includes a $5 million annual consulting fee paid to Michael Ferro, who stepped down as Tronc’s board chairman last month amid accusations that he engaged in inappropriate behavior toward two women. When the story broke, the Tribune quoted a Tronc spokeswoman saying, in part, “we are aware of no [sexual harassment] claims filed against Mr. Ferro throughout his career.”

But the future of Ferro’s consulting deal seemed uncertain Friday after the website Bloomberg Markets dropped a bombshell: Ferro’s company, Merrick Media, is selling all of its stock in Tronc to a company called McCormick Media LLC for $208.6 million. That deal comes as Tronc is set to sell its largest newspaper, the Los Angeles Times, to a Los Angeles billionaire for $500 million. That sale also includes the San Diego Union-Tribune.

Ferro made millions as a tech mogul before taking an interest in journalism, founding a company that bought the Chicago Sun-Times in 2011. That company, Wrapports, sold the Sun-Times to the newspaper’s current ownership group, led by former Chicago Ald. Edwin Eisendrath, last year.Ferro donated his Sun-Times shares to charity in 2016 to take a $44.4 million stake in Tribune Publishing, which he then renamed Tronc, short for Tribune Online Content. The name drew widespread ridicule on social media and even took center stage on an episode of “Last Week Tonight with John Oliver.”

Merrick Media, which Ferro controls, bought in to Tronc at $8.51 a share. The company will sell to McCormick for $23 a share, Bloomberg reported, citing a Securities and Exchange Commission filing.

Sargent McCormick, listed as the manager of McCormick Media, is part of the prominent Illinois family that controlled the Tribune for most of the 20th century.

The Tribune reported that McCormick Media “approached Ferro within the past couple of weeks with the offer.”

Tronc CEO Justin Dearborn released a statement noting that Tronc “was not a party” to the transaction.

“I want to emphasize that this is a private transaction between Merrick and the buyer and does not alter our business strategy or the pending sale of the California News Group,” Dearborn wrote, referring to the Los Angeles and San Diego newspapers.

The announcement of the Ferro-McCormick proposed deal capped off a week in which Tribune staffers launched a Twitter feed and website to promote their effort to unionize. The company responded by forwarding a copy of an April 11 letter that Bruce Dold, the Tribune’s publisher and editor-in-chief, sent to staff.

It says, among other things: “We are in the midst of a newsroom reorganization that is designed to put us in the best position to fulfill our mission and thrive in an intensely competitive media environment. We are committed to investing in our newsroom. We are committed to serving this community and to remaining the largest and most impactful news organization in the Midwest.”

In addition to layoffs, staff say they’ve seen all kinds of previously accepted expenses either eliminated or drastically cut back — from reporter training to travel budgets.

“A lot of us have no expense accounts at all,” said columnist Heidi Stevens. “So that if we wanted to just simply buy coffee for a source, we can’t do that.”

Long gone are the days when the Tribune dispatched armies of reporters to cover political conventions or the Olympics.

“Along with this breadth of ambition came fairly generous salary increases,” said columnist Eric Zorn, who started at the paper in 1980 as a  summer intern. “There were times in the ‘80s, when a double-digit [annual] salary increase was not unusual.”

Zorn said he still feels like he’s “fairly paid,” but worries about younger reporters at the Tribune.

“We’re not keeping the younger talent at the paper,” he said. “The resources don’t seem to be there to pay people that keeps them in journalism.”

Whether there will be more resources in the future is anyone’s guess. Earlier this year, Tronc agreed to sell its single biggest asset, the Los Angeles Times, to biotech billionaire Patrick Soon-Shiong.  That has spurred speculation that the rest of Tronc may soon be up for sale.

On Friday, the New York Post, citing unnamed sources, reported that billionaire Leon Black has begun talks with Tronc’s management team. That story broke before the announcement of the Ferro-McCormick deal.

In an ominous sign of the company’s possible health, Dearborn last month refused to offer a group of financial analysts any indication of the company’s future well-being. He’s among several Tronc executives whose compensation packages total in the millions of dollars a year, with Dearborn leading the way at $8.1 million, according to the SEC.

And in another indication of the turmoil at Tronc, Lewis D’Vorkin, chief content officer of the company’s newly created digital unit, was let go along with dozens of other employees last week, according to the Los Angeles Times.

With so much uncertainty at the company, it’s a good time for staffers to “pull with the same oars,” Zorn said.

“Obviously there are a lot of possibilities in terms of new owners — a lot of them kind of scary,” he said before the announcement of the Ferro-McCormick deal.

Jim Warren, who was at the Tribune for 24 years, including a stint as managing editor, said it’s “mildly ironic” that a paper that’s been staunchly anti-union for much of its history is perhaps about to have one in its newsroom. But Warren, who left in 2008, questions the benefit of the move.

“You have to sit down for negotiation with a management whose financial situation is apparently weaker and weaker,” Warren said. “So the question is: How much is there to be gained economically? And, ultimately, do the newsroom employees have the nerve to both threaten and even walk out?”

In early June, the newspaper will vacate the Cathedral-like Tribune Tower on Michigan Avenue, the iconic high-rise with flying buttresses and leaded glass that’s been its home since 1925. The paper is relocating to One Prudential Plaza near Millennium Park.

Staffers, particularly long-time employees, will be sad to leave. Tears will be shed.

“I love the building,” Stevens said. “I love watching visitors and city residents walk by the building and look up.”

But unlike so much of the upheaval at the Tribune in recent months, Stevens doesn’t think the move will, in the end, change how journalists get the job done.

“We don’t do our jobs in a building, we do our jobs out on the streets and in people’s living rooms and at meetings,” she said. “You don’t have to have a posh glass office to do your job as a journalist. We can do our jobs from anywhere.”

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