Tribune CEO: Deal with Deseret News designed to save, not hurt Tribune

Published: Tuesday, July 1 2014 4:55 a.m. MDT

The suit delineates the Tribune's corporate, out-of-state owner from local management and claims the negotiated deal hurts the future viability of the Tribune. It states that the Tribune was profitable prior to the implementation of the new agreement on Jan. 1, but that it is now "hemorrhaging and is no longer self-sustaining."

In his declaration, Paton describes selling the Tribune's share of the assets to pay off debt, secure the pensions of newspaper employees and invest in digital operations.

O'Brien said she was previously unaware that the deal included securing the pensions of employees. She said the group is anxious to learn new details as the court case moves ahead.

"There a number of issues we're eager to untangle once discovery is underway," she said.

Paton took issue with the group's allegation that the amended JOA was intended to cause the Tribune financial losses and to stop publication or sell to the Deseret News.

"Nothing could be further from the truth," he wrote. "Our purpose was exactly the opposite: to make the Tribune a stronger, self-sustaining newspaper that could survive long-term in a world with very different newspaper economics than before, while at the same time monetizing some declining legacy assets in accordance with our company's overall strategic plan."

Paton said he recognized that profits the Tribune received under the former JOA would not be able to sustain the paper without additional cost reductions. He said he turned to digital advertising as an obvious source of revenue to cover those costs. As part of the agreement, the Tribune would manage digital advertising sales itself.

"This arrangement allowed us to maximize our digital revenue opportunities," he said.

The Tribune's new digital sales force has generated about $500,000 in advertising a month and it is expected to significantly increase going forward, Paton wrote.

"It is this growth in digital advertising revenue, made possible by the 2013 Amended JOA, that has forestalled any plans for further cost-cutting and editorial staff reductions at the Tribune," he said.

Paton also wrote that layoffs at the Tribune the past year had nothing to do with the new agreement as O'Brien and former Tribune editor Nancy Conway have claimed. He said the cuts would have still been necessary due to "ever-shrinking" revenue distribution.

"They are, to be kind, mistaken as to the intent and function of the 2013 Amended JOA," Paton wrote.

Email: romboy@deseretnews.com

Twitter: dennisromboy

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