From: Hiller, David
Sent: Thursday, May 31, 2007 9:17 AM
Subject: Times Change - What's Next
I want to bring you up to date on change underway at The Times, what to look for next, and what you can do.
First, evidence mounts every day of the big, pressing need to change our business. The old model is broken, and it’s showing in our financial performance. Revenue in April was down nearly 9%, and May will be down about the same. Cash flow is down even more, with April 34% below last year – leaving us with a cash flow margin in the low teens. We are not alone, and are doing better than some – there are large metro papers that are losing money and some not much better than breaking even. The urgency of our situation is heightened by the Zell/ESOP transaction. The future value of the company - and the ESOP - depends upon our cash flow results to pay down the debt and invest for growth. If anybody has any doubt about the need to change our business to stay successful, please let me know.
So, how are we going to change? We are mobilizing on multiple fronts:
We are adding technology and online product development resources. A little later today, we are announcing that Scott Sullivan has joined latimes.com as chief technology officer and will be building the teams to speed our development and rollout of new interactive products in the second half of 2007 and 2008. High on the priority list will be new local entertainment and listings products, building off the current calendarlive.com offering. We’ve also made initial investments in the camera and editing equipment necessary for our developing video strategy and continue to address our multimedia editorial training and staffing needs.
Project Reinvent is well underway with its mission of re-conceiving the core print paper “from scratch”, true to our journalistic mission and focused sharply on what readers need and want from a print newspaper today. This cross-company team is looking at everything, including how we organize ourselves and the paper, local coverage, story selection, length, presentation, you name it. We’re getting their full report in the next 30 days and will take action right away.
Speaking of local, we are actively working ways of increasing local revenue, including options for better zoning both ads and editorial content, and expanding the reach of Times Community Newspapers.
Hoy is showing strong growth in the Spanish-speaking part of our community, and looking at expanding its Fin de Semana weekend product.
There is also lot of value if we can put more papers through our plants and distribution systems and we are looking at ways to innovate in operations and distribution - likely in collaboration with other newspapers in SoCal.
The recent EVSP program was a difficult but important part of how we are changing – reducing expenses in the core and investing for growth. As part of this, we are both eliminating some positions and adding back some positions. We eliminated approximately 170 positions, mostly through the voluntary buyouts; we are planning to hire back approximately 50 positions in the core paper to strengthen talent in multi-media, local coverage, marketing and sales. In addition, we will be adding likely more than 30 additional staff in interactive before the end of the year. We are a living, changing organization and this all part of how we adapt.
In summation, here are the headlines and I hope they are familiar:
Re-tool everything to be fully multimedia
Grow online faster - integrate with print
Re-invent the core newspaper to better serve our local audience and reflect how readers live, and use print today
Offer more products for more audience segments, like Hoy for the Spanish-speaking SoCal community
Invest and re-allocate resources for growth
Get all at The Times engaged and fired-up about where we are going
With all of these change initiatives underway, being really good at execution is more important than ever. To help us with that, we are naming Elisa Nye to a newly created position of Director/Project Management to help us make sure our actions are well aligned with our priorities and being effectively accomplished.
You also saw Dennis FitzSimons’ organization announcement Tuesday, designed to make our whole Tribune organization more focused, with Scott Smith spending more of his time on the Chicago Tribune, and me and several others reporting directly to Dennis. Dennis is coming out here today to talk about our change initiatives and also discuss similar efforts under way all across Tribune. John O’Loughlin and Russ Stanton are representing us on the Tribune-wide team helping lead these efforts.
Every one of us has to be involved in how we change for the future and invested with a sense of urgency. Many of you already are, but all of us have to be. Every idea for new revenue, every way to do our jobs more effectively, every time we serve a customer better, it all adds up. Think about what you can do; talk to your manager and colleagues about it. Let me hear from you if you have ideas you want to share.
We – and all of our readers, users and advertisers – are in this together.