Chicago Tribune cash flow falls short on national advertising weakness
Romenesko+ Memos | Crain's Chicago Business
The Chicago Tribune's operating cash flow is running 24 percent below its business plan for the first nine months of the year and revenue is 3 percent below budget, "largely driven by the national advertising category which is off almost 30 percent year-over-year," according to Chicago Tribune Media Group president Vince Casanova. "We need a strong 4th quarter finish," he writes in a memo employees that's posted after the jump. "Let’s make sure we capitalize on every sales opportunity. Look in your area of responsibility and make a recommendation on how we can make it better or more efficient."
Sent: Thursday, October 20, 2011 01:10 PM
Subject: Q3 Performance
We recently finished the third quarter and I wanted to take a moment to update you on our performance.
We have a lot of really great things going on in our company. In just in the last 90 days we’ve:
* Finalized our agreement to provide production services to the Sun-Times and its affiliated newspapers. This will add significant new revenues and profits in 2011 and 2012.
* On Sunday, we published a comprehensive report on the changes we made to our newspaper since this summer, seeking feedback from our readers in our quest to continue to improve the Chicago Tribune. The spadea really showcased our newspaper and reinforced the value we bring to our readers.
* We redesigned our chicagotribune.com website. Focusing on breaking news, traffic was up during the summer, usually a slow period.
* Landed key advertising agreements with Bank of America, JP Morgan Chase, Ronald McDonald Charities, and many local advertisers which will help us improve advertising revenue trends in Q4.
* Launched the Prosper digital press at Tribune Direct. This game changing technology will help Tribune Direct reach record revenues and profits in 2011 and 2012.
* We increased our marketing presence, including a new B2B campaign, Solutions Served.
* We sponsored Social Media Week, and the first ever Pink Tie Guy Gala, in support of National Breast Cancer Awareness Month.
Unfortunately, in spite of these and many other great accomplishments, our financial performance is not where we need it to be. Through the first nine months of 2011, our revenues are off plan by 3%, largely driven by the national advertising category which is off almost 30% year-over-year. Operating cash flow is behind plan by 24%.
In the face of continuing challenges to our industry, we need to continue to work together. We need to sustain our print businesses while we find new digital sources of revenue. We need to innovate and optimize our resources. And I know we can. After just three months in my new role, I’m continually inspired by our employees. You have a passion for winning and do so much for our company and our community.
We need a strong 4th quarter finish. Let’s make sure we capitalize on every sales opportunity. Look in your area of responsibility and make a recommendation on how we can make it better or more efficient. I’m confident that with your continued dedication and drive, we’ll meet our shared goals. So let’s put on our running shoes and sprint to the finish.
I look forward to seeing everyone at our town hall meetings in the next two weeks.