Tribune Publishing, Baltimore Sun Media Group parent company, names new CEO
Baltimore Sun and Tribune News Service|
Feb 23, 2016 at 7:12 PM
Jack Griffin has been replaced as CEO of Tribune Publishing Co. by Justin C. Dearborn, who assumes the top job at the parent company of several major newspapers across the country, including The Baltimore Sun, Chicago Tribune and Los Angeles Times.
The announcement comes less than three weeks after tech entrepreneur Michael Ferro became the company's top shareholder.
Dearborn, 46, is a longtime Ferro associate who had been CEO of Merge Healthcare, a Ferro-controlled medical technology company that was acquired by IBM in October.
"Although this is a different medium than my last technology company, it has the same challenge on how to create the highest value for our content," Dearborn said in the news release.
Ferro became the company's largest shareholder in early February, when his Merrick Media bought a 17 percent stake in a $44.4 million deal. Ferro also is the majority owner of the Chicago Sun-Times, but said he gave up "all operating involvement" with that newspaper upon becoming nonexecutive chairman of Tribune Publishing's board.
When Ferro's acquisition was announced, Griffin called Ferro "a tremendous admirer of our brands at the Tribune … so it's a winning combination for our company."
Less than three weeks later, Griffin was fired.
Griffin was named CEO of Tribune Publishing in 2014, after helping the company prepare to spin off its publishing properties from its more lucrative broadcast and entertainment assets.
He arrived at Tribune Publishing after holding executive roles at Parade Magazine and Iowa-based Meredith Corp. In 2010, he became CEO of Time Inc., but was pushed out after less than six months by the CEO of their parent company, who cited differences in leadership style.
Ferro's installment as top Tribune Publishing shareholder sent shock waves through the national media scene. While the entrepreneur has a strong track record in technology investment, his actions at the Sun-Times were controversial — he made headlines when he laid off all the paper's photographers — and the newspaper staff shrank significantly during his tenure.
In an address to Tribune Publishing employees in early February, Ferro said he would help address revenue issues that have plagued newspapers industrywide, focusing on the moneymaking potential of data and logistics capabilities rather than simply subscription revenues.
Under the terms of the deal, Ferro's firm cannot sell its stake in Tribune Publishing for three years.
Dearborn, who has no media experience, takes the helm of the legacy newspaper company as it struggles to reverse years of industrywide revenue declines and transition to a digital-first medium.
Tribune Publishing is the parent company of the Baltimore Sun Media Group, which includes such local newspapers as The Capital in Annapolis, the Carroll County Times, The Aegis in Harford County, the Howard County Times, and Baltimore's alternative weekly City Paper, as well as their websites and other publications.
Shares in Tribune Publishing closed down 13 cents Tuesday at $7.21 each.
While Dearborn has no background in media, he has a long track record in technology and with Ferro. The two worked together on Internet software company Click Commerce, investment firm Merrick Ventures and most recently Merge Healthcare, a Chicago-based medical software company that was sold to IBM for about $1 billion, including the assumption of nearly $198 million in debt, according to Dealogic.
In June 2008, Merrick Ventures bought a controlling stake in Merge, which had been reeling from an earlier accounting fraud scandal, for $20 million, including a $15 million loan. Dearborn was installed as Merge CEO the following month.
Although Merge didn't turn a yearly profit under their leadership, the development of an artificial intelligence initiative to analyze medical diagnostic records caught IBM's eye last year, leading to the sale of the company.
Merrick's 23.5 percent stake in Merge was valued at nearly $190 million in the IBM transaction.
When Ferro bought into Tribune Publishing on Feb. 3, he pledged to be actively involved with his new investment, and the quick change at the top of the company is evidence of that. In addition to installing Dearborn as CEO, Ferro has named digital media executive Malcolm CasSelle as president of new ventures.
Under terms of the Feb. 3 transaction, Ferro's firm cannot acquire more than 25 percent of the outstanding shares and cannot sell its stake in Tribune Publishing for three years.
"The board thanks Jack Griffin for his significant contributions and wishes him the best of luck in his future endeavors," Ferro said in a statement Tuesday.
Ferro declined to comment beyond the news release, with a spokesman citing a quiet period until Tribune Publishing reports its fourth-quarter and full-year earnings results on March 2.
Griffin was initially hired as a consultant to streamline the publishing assets in advance of the Tribune Publishing spinoff from Tribune Media, which retained higher-margin broadcasting assets and real estate holdings.
At Tribune Publishing, Griffin's tenure has been marked by strategic acquisitions, cost-cutting measures and a steadily falling share price, all of which have contributed to takeover rumors as the company's market capitalization fell below $200 million.
In September, Tribune Publishing fired Austin Beutner as publisher and CEO of the Los Angeles Times and the San Diego Union-Tribune, unleashing waves of criticism from West Coast civic leaders. Tribune Publishing approved buyouts for approximately 7 percent of its eligible 7,000 employees across its media portfolio in November.
Griffin's acquisition strategy brought the Union-Tribune, the Sun-Times suburban papers and two Maryland dailies into the Tribune Publishing fold. Ferro's investment was intended to give Tribune Publishing the cash infusion it needs to compete for the bankrupt assets of the Orange County Register, seen as a crucial acquisition for its California News Group. Tribune Publishing submitted a "stalking horse" opening bid on Feb. 12, with the bankruptcy auction set for March 16. The assets, including real estate, are expected to fetch between $40 million to $65 million, according to media analyst Ken Doctor.
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"I'm proud of all that we have accomplished to reorient the company and position these premium brands for the future," Griffin said in a statement.
It is unclear if the new leadership will affect the acquisition strategy, but other changes are likely in the works.
Addressing employees on Feb. 4, the day the acquisition was announced, Ferro said he wants to use "big data and artificial intelligence" to get Tribune Publishing to tap into the billions of dollars Google, Facebook and other Internet giants are making off of its content. While Ferro has yet to elaborate on his plans, Katie Risch, senior vice president at Chicago-based Centro, which works with Tribune Publishing on its digital advertising, said most newspapers are not monetizing their readership data fully.
Risch said publishers can significantly "extend their audiences" by selling advertising beyond their own websites and building their databases with nonreaders that "look like" their own audiences, the same tactics employed by Google for its market-leading ad network.
"I believe Tribune Publishing has a significant opportunity to leverage technology to increase the value of its content and distribution channels," Dearborn said in a statement.
Prior to Click Commerce, Dearborn worked at Motorola before it split into two companies. He specialized in intellectual property transactions and also held management positions in Motorola's semiconductor and government groups. He has a bachelor's degree in accounting from Illinois State University and a law degree from DePaul University, according to SEC filings.