CEO Jack Griffin is out at Tribune
Tribune Publishing has parted ways with its CEO Jack Griffin, I’ve learned. In a fast-moving turn of events, unusually quick by corporate standards, newly minted Tribune Publishing board chairman Michael Ferro has orchestrated Griffin’s ouster — and directed the choice of his successor.
Tribune Publishing is expected to make the announcement of the change before the stock market opens on Tuesday. Representatives for the company declined comment on the story, as did Ferro, who told me Monday evening that he would speak after Tribune’s March 2 earnings call.
UPDATE, 7:30 AM: Tribune has made Griffin's departure official in a filing with the Securities and Exchange Commission. The company has named Justin Dearborn its new CEO.
Griffin’s termination comes less than three weeks after he announced, to some fanfare, an investment of $44.4 million in TPUB by Ferro, a prominent Chicago entrepreneur.
“This transaction supports key elements of our ongoing strategic plan and provides our Company with additional capital to accelerate our growth strategies,” said Griffin on Feb. 4. “We continue to evaluate growth opportunities where we can achieve measurable, value-enhancing synergies that drive financial contribution and maximize shareholder value.”
Griffin had planned to use the new pot of money to fund a bid for the Orange County Register and Riverside Press-Enterprise (POLITICO: “Santa Ana Showdown: Tribune’s Bid for Southern California”). Griffin intended that buy to be the linchpin of his California strategy: Tribune, owners of The Los Angeles Times, would be a company with half its revenues in the Golden State. It would have been the most important step in his overall strategy to buy up more metro assets in Tribune’s biggest markets.
Instead, Ferro surprised Griffin and moved the board he had just taken command of to terminate the CEO. Griffin had not expected the man he had brought in as essentially a partner to push him out. "This is almost Shakespearean," said one savvy industry observer. "The CEO brings in a new shareholder as his 'partner' and his ally's first move is to kick him out. Act One is Romeo and Juliet and Act Two is Julius Caesar."
Commanding the Tribune completes a long quest for Ferro, who has built his standing in Chicago as a tech investor year by year. He had brought numerous high-profile investors into the ownership group that bought the Chicago Sun-Times four years ago, through Wrapports LLC.
Yet, from the beginning, it was the bigger, more powerful Chicago Tribune Ferro and some of his associates sought. In the history of the Chicago’s newspaper wars, Ferro’s acquisition of the Second City’s second paper will be seen as a stepping stone to the Tribune. In 2016, circumstance and opportunity have allowed Ferro to achieve that goal. Further, it portends likely further rationalization of the Tribune–Sun-Times relationship, possibly including merger.
Who will succeed Griffin? That would be Justin Dearborn, a longtime Ferro associate. Dearborn participated in recent Ferro company visits, and his naming would mark Ferro’s quick and near-complete assertion of control of the troubled company.
He most recently served as CEO of Merge Health Care, recently sold to IBM for a $1 billion. Ferro’s Merrick Ventures had been a 24% stakeholder in the company, and took more than a 10X profit on its sale.
Dearborn appears to have little or no top-level media management experience.
Griffin’s departure is not unexpected; as I noted as recently as Friday, “Expect bets to be laid soon on how long the Griffin/Ferro partnership will hold.” As suggested 10 days ago, here at Politico (“Michael Ferro immediately redefines Tribune Publishing’s chairman role”), the fault lines began forming behind the scenes as soon as Ferro had bought 16.6% of the company -- becoming its largest shareholder -- on Feb. 3. Ferro paid $44.4 million for the new stake, and, while retaining his Wrapports investment in the Sun-Times, stepped down from an active role as the company’s chairman.
At the same time, Ferro became the Tribune’s chairman of the board. His official title of “non-executive chairman” masked his active role. He moved into the third-floor “chairman’s suite” office in Tribune Tower in Chicago. Then, he asserted himself right away, in the Tower, and in travel both to The Los Angeles Times and Tribune’s New York office. In addition to involving Dearborn in meetings, he had already assembled a small personal staff, and brought Malcolm CasSelle on board as president for new media ventures, reporting to Ferro. CasSelle will now relocate to Chicago, I’m told.
For the last two weeks — since Ferro’s arrival — Tribune executives note that they heard less from their CEO than from Ferro. Even top execs privately wondered who was now defining company strategy and direction, and found Griffin’s presence oddly lacking.
The sudden move provokes more questions than answers. Jack Griffin had stuck with his five-point strategic plan, since taking over Tribune Publishing as its first CEO after the newspaper company split off from the Tribune Company in the summer of 2014. That plan had failed to so far lift the company out of its revenue doldrums; its year-over-year revenue losses have come in a little worse than the its peers.
Griffin had been playing a major game of catch-up from the inception. First TPUB saw its parent company take both its real estate and digital properties, at split, and saddle it with a $325 million debt, due to a special dividend it paid upon division. His group of then-eight (now nine) largely metro newspapers sits in the toughest part of the daily landscape. Metros have taken the brunt of digital disruption revenue loss. Further, as Griffin took control, Tribune newspapers were still licking their serial wounds from several years of Sam Zell ownership, and then five long years of bankruptcy-court limbo.
Among the major questions left:
How exactly did his happen? We know that Griffin was surprised by his ouster, but what agreements or promises had been made behind the scenes? Griffin had made a big bet on the Ferro investment. He’d approved the devaluing current investors by 20% as TPUB sold Ferro 5.5 million shares in a private placement, one of a string of financial moves that the markets and financial analysts have questioned in his 18-month tenure. (Griffin was named as TPUB CEO in March, 2014, five months before the company split.) One big barometer of Griffin’s assessment has been that market. TPUB’s initial share price of $24.50 has plummeted to $7.34 as of its Monday close, with a low of $5.68 registered within the last 10 days.
This marks the second time Griffin has been let go as CEO by a major media company in five years. Griffin was fired by Time Inc. just six months after being appointed.
What kind of vision, leadership and strategy would Justin Dearborn provide as CEO? Though he has little media management experience on his resume, he has been a key executive working for Michael Ferro for a decade.
Before his Merge Health Care stint, Dearborn served as managing director for Ferro’s Merrick Ventures for a year and a half. Previously, he’d been general manager of Click Commerce , an Oregon-based company that provides “customer-configurable solutions for the business of research.”
Will Tribune move full-speed ahead in its attempt to buy the Orange County Register (and Riverside Press-Enterprise) out of bankruptcy, an auction that should be finalized within a month? (“Santa Ana showdown: Tribune’s bid for Southern California”). Latest word out of Orange County this evening is that Freedom’s management may ask the bankruptcy court for a delay in final disposition, my confidential sources say. With complications in the bankruptcy and abrupt change in Tribune leadership, how might the Orange County bidding be newly impacted?
What will be the fate of the suite of well-respected, seasoned top execs that Griffin had put in place since last summer? They include former New York Times executives Denise Warren, Mark Campbell, Rajiv Pant and Mohit Pandey and former Dow Jones Chief Revenue Officer Michael Rooney. Much is in motion in Tribune Publishing’s transition – and the future of this largely New York City-based group is now in question.
What does the change portend for the ongoing rivalry between Tribune’s Chicago operations, and its L.A. Times leadership? Ever since the Tribune Company bought the Times (and Times-Mirror) in 2000, business and editorial leaders have often found themselves often at loggerheads, most recently as Griffin fired his independent-minded Times publisher Austin Beutner in September.
Now, inquiring minds are asking why it was announced last Wednesday that long-time Tribune editor Gerry Kern had “retired” – effective immediately – and replaced by editorial page editor Bruce Dold. It’s not the departure of the 66-year-old Kern that was surprising; it was the timing. Meanwhile, company observers wonder about the staying power, and possible greater role, L.A. Times editor Davan Maharaj may play, under the new Ferro regime. Might a new twist on the old Chicago/L.A. Tale of Two Tribune Cities now be played out?
Might the Tribune and Sun-Times now see a deeper combination, saving money in Chicago? Ferro has already used the word “merger” as one possibility for the two competing dailies, who already share printing, production and distribution facilities.
Then, there’s irony, of course. Griffin’s own departure comes fewer than six months after his own firing of L.A. Times publisher Austin Beutner. That firing ignited a new set of challenges to Griffin’s tenure. Los Angeles’ business elite mounted a major protest, and L.A. billionaire businessman Eli Broad pressed to buy the Times from Tribune, a move Griffin successfully stonewalled.
To explain Beutner’s termination, Griffin gave several interviews that only worsened his public standing. Finally, he had to revise downward TPUB earnings estimates, a move that deepened financial analyst and investor questioning of his turnaround strategy.
So, will Chicagoan Ferro fight as tenaciously as Griffin to keep Tribune whole? Or will he be willing to part with them – for the right price – and concentrate on what once again could become a Chicago-centric company? (POLITICO: “Apollo seeks purchase of Tribune — and possible California sell-off”)
Markets, and financial analysts, have watched and wondered what the emergence of Michael Ferro at the Tribune will mean. Today, they now have a new first step in that new story.