More than two hours after Chicago-based publishing giant Tronc, Inc. (formerly Tribune Publishing) issued a news release announcing the company’s purchase of the state’s most widely-read newspaper, Virginian-Pilot staff members received an email from their publisher’s office informing them of the sale.
The $34 million cash sale of The Virginian-Pilot Media Companies LLC, announced Tuesday, includes Pilot subsidiary publications, among them Richmond-based Style Weekly and Inside Business. Along with the email, employees received a letter from Tronc Chairman and CEO Justin Dearborn, which he begins by saying, "I want to be the first to welcome you to our family."
“The Virginian-Pilot is an organization with a tremendous legacy,” Dearborn’s letter states. “You’ve built trust and reliability with your readers, and we plan to maintain that reputation and build on your illustrious history,” he continues, possibly in reference to the newspaper’s three Pulitzer Prizes, as well as a finalist nod for investigative journalism last year.
Dearborn then cites the “family of media properties” the Pilot joins under Tronc, including the Chicago Tribune, Los Angeles Times, New York Daily News, The Baltimore Sun, Orlando Sentinel and Newport-News daily newspaper and former competitor in the region, the Daily Press.
The letter then states that the Pilot and “its other brands,” including Style in Richmond, “will operate as part of Tronc’s Southeast region,” reporting to the company’s general manager of the Southeast region, Nancy Meyer, who will “oversee integration efforts, working closely with leaders at [the Pilot and Daily Press].”
The news immediately sent ripples through the larger local journalism industry. Pilot Executive Editor Steve Gunn did not immediately return requests for comment — although he, and the Pilot staff, met with Tronc executives on Tuesday at noon in what Dearborn described in his letter to employees as a “town hall meeting,” to learn more about changes on the horizon.
“Style Weekly is honored to have been a part of the Batten family's storied portfolio of media and journals," Style publisher Lori Waran says in a released statement. "We look forward to exciting days ahead with our new owners."
Reporters at the Pilot — which has a Sunday print circulation of 132,000 and a digital audience of nearly 2 million monthly visitors — took to Twitter with a slew of questions about the sale, including why staff seemed to be the last to find out about the shakeup, whether the Pilot would be merging with the Daily Press, who the paper’s new publisher is, if more layoffs were on the horizon and if this meant certain positions, such as copy editors, would be based remotely.
Some media watchdogs expressed mixed views about the thought of Tronc, a company that emerged from bankruptcy protection in 2012 and underwent a leadership shift, adding the Pulitzer-winning, community-focused Pilot newspaper to its portfolio.
“In many respects, this is a sad day for Virginia journalism,” says Jeff South, a veteran reporter and editor who is director of undergraduate studies at Virginia Commonwealth University's Robertson School of Media and Culture in an email response for a comment on the sale. “It’s been an article of faith that locally owned news organizations are better news organizations; that when the owners live in the communities they serve, they make better decisions about what readers need.”
South, who is traveling overseas, added that he worked for Landmark, the Pilot’s former publishing company, in the early 1980s and the culture was “intensely community-focused,” which was evidenced by not only the daily paper, but products such as the Virginia Beach Beacon and editorials seeking to provide progressive leadership.
“With the sale to Tronc, we will miss that local touchstone,” South says, “But at the same time, we in journalism need to be realistic; nostalgia doesn't pay the bills. There will be significant economies of scale with The Virginian-Pilot and the Daily Press of Newport News under the same ownership.”
Pilot employees were quick to point out the latter fact, too. With roughly one-third of Hampton Roads primarily consuming Daily Press content, and the remainder subscribing to the Pilot, the shared ownership of the two publications could yield bigger returns, particularly in an industry that is struggling across the board, South says.
“It will be interesting to see if the two papers can leverage their reporting resources to take on projects that neither could do alone,” he says. “Moreover, with the sale, the Pilot may be able to combine forces with storied newspapers like the Chicago Tribune and the Los Angeles Times. So there's an upside to the deal.”
Quentin Kidd, director of the Wason Center for Public Policy at Christopher Newport University, says the combined forces of the Daily Press and Virginian-Pilot could be good for regionalism in Hampton Roads.
"The downside is if they basically combine backside operations, lay off some of the news staff, simply use common stories to cover the gap, keep both the newspapers running and sort of milk the ad revenue," he says. "I hope they don’t do that — I hope the new owners have a sense of civic responsibility and civic obligation to the region. And if they do, it could be a good thing for us."
Kidd also notes that "the corporatization of the news media — the newspaper business — means that newspapers are more susceptible to bad business decisions, or business decisions that aren’t in the best interest of the community." He added, "A lot of us used to read family-owned newspapers and the families were invested in the community; well when your newspaper is owned by a corporate office in Chicago and they’re making decisions that are answering to shareholders, those decisions could really be bad for us. ... It would be better for all of us if we were reading newspapers owned by people in our communities, I think, but that just isn’t the reality of the business right now."
The Chicago Tribune and L.A. Times have had a rocky relationship with Tronc, of late. Earlier this month, Tronc executives said the pending $500 million sale of the Los Angeles Times to biotech billionaire Patrick Soon-Shiong is still weeks away, with a back-end closing date of Aug. 7. After years of disagreement with ownership, Tronc’s largest paper unionized before the decision to sell to Soon-Shiong – which was met with cheers from the newsroom when the news broke.
Meanwhile, staffers at the Chicago Tribune recently announced their intent to unionize with the debut of The Chicago Tribune Guild comprising nearly four dozen reporters, editors and columnnists. In a public letter, the union criticized Tronc for having “jeopardized our ability to do great work.”
Couple the latter with the recent resignation of Tronc chairman Michael Ferro in March, which coincided with the L.A. Times sale, and just hours before allegations of sexual misconduct against Ferro went public in an investigative report published by Fortune. The former chairman and largest company shareholder left Tronc with a $15 million payout for the remainder of a three-year consulting contract signed with the company intended to run through 2020.
In April, Ferro sold his 25 percent stake in Tronc – totaling more than 9 million shares – for $23 a piece, or $208.6 million total, according to the purchase agreement filed with the SEC. On Tuesday, the company’s stock was valued at roughly $16 per share, according to the NASDAQ.
As for staffers at the Pilot and its subsidiaries: the future is still hazy. When asked about layoffs during the noon meeting Tuesday, executives said a “roadmap” would emerge over the next 45 days.