Net profits at the Tribune Co. fell off again — this time by 36% — in the final quarter of 2004 due to a charge for job cuts, the circulation reporting scandal and lethargic advertising.
Nor was the broadcast and newspaper company helped by the lackluster ratings performance of the WB’s primetime lineup during the fall season, or by the introduction of local people meters in a handful of top markets including Los Angeles and New York.
During an earnings conference call on Friday, Tribune chair-CEO Dennis FitzSimmons said the people meters undercount younger viewers, particularly young men. His company’s 26 TV stations are primarily made up of WB and UPN stations. Both the WB and UPN skew young.
Tribune execs say they believe the WB will make up for lost ground with its midseason shows.
During the call, FitzSimmons didn’t try to sugarcoat the Bush administration’s decision not to help Tribune and the major media congloms in the fight for looser media ownership regs. He said the chances of the U.S. Supreme Court taking the case are now greatly diminished. Tribune, NBC Universal, News Corp. and Viacom filed an appeal Friday.
Tribune, which owns the Los Angeles Times and Newsday, said net income decreased to $215.8 million compared with $338.4 million in the fourth quarter of 2003. At the same time, fourth-quarter revenue rose 1% to $1.48 billion. Previous year’s figures were also boosted by a $100 million profit from sale of Tribune’s share in the Golf Channel.
Company took a write-off of 5¢ a share for the 250 jobs eliminated in the newspaper publishing division.
Revenue from broadcast and entertainment decreased to $385.2 million from $386.3 million. On the publishing side, revenue increased to $1.1 billion from $1.08 billion the previous year.
FitzSimmons said the uneven ad market was the symptom of soft movie ads, as well as a downturn in retail and automobile advertising. Also, none of Tribune’s television stations were in the markets enjoying a brisk uptick in political ad revenues tied to the 2004 prez contest.
Taking everything together, FitzSimmons acknowledged that “2004 was not the recovery year we had looked for.”
He reiterated that the company moved swiftly to settle the circulation scandal at Newsday and at the Gotham edition of Spanish-language newspaper Hoy. Tribune made a $90 million settlement last year to advertisers who paid inflated prices for ad spots.
FitzSimmons said any remaining issues from the circulation debacle would be focused on this year, and that the new management team at Newsday is repairing relationships with advertisers.
FitzSimmons said the company also would focus on boosting circulation at the L.A. Times, which has been hurt by a new federal telemarketing law making it more difficult to cold-call potential subscribers.