Tribune Publishing CEO Ousted in 'Shakespearean' Power Play

CHICAGO, IL — Tribune Publishing CEO Jack Griffin, who just three weeks ago was praising the stock deal he set up that landed Michael Ferro as the Tribune’s largest shareholder and non-executive chairman, has been removed as CEO.

The company filed a statement with the Securities and Exchange Commission Tuesday morning announcing the leadership change.

Justin Dearborn, who has worked with Ferro since 1997, is the new CEO. He’s been seen in the company of Ferro at the Tribune Tower in recent weeks.

Ferro, the principal partner in the ownership team of the Chicago Sun-Times, invested $44.4 million in Tribune Publishing earlier this month for a 17 percent stake in the company.The day he assumed his ownership stake, Ferro moved from his Sun-Times office into the chairman’s office at the Tribune building and began calling the shots.

Ferro’s purchase set off speculation that major changes would come to the Tribune, as well as fears Chicago would become a one-newspaper city with an eventual merger of the Trib and Sun-Times newspapers.

The company will announce further personnel and strategic moves on March 2, reports media columnist Robert Feder at RobertFeder.com.

One new mind joining Tribune is Malcom CasSelle, named president of New Ventures by Ferro. CasSelle has been involved in several startups and reportedly was an early investor in Facebook. He was CEO of an online paywall company called MediaPass, CEO of a social network for video gamers called Xfire, and involved in Groupon’s venture in China.

Griffin was instrumental a few years ago in spinning out Tribune Publishing newspapers from the Tribune Media TV, radio and digital holdings. The two are now separately traded companies.

Said Griffin in a statement released by the company:

“I’m proud of all that we have accomplished to reorient the Company and position these premium brands for the future. I have tremendous respect for the mission of this business and for the dedicated employees that serve this organization with distinction. With the progress and foundation that has been laid, the timing is right for a new leader to come on board and lead Tribune Publishing through its next phase of transformation. I thank everyone at Tribune Publishing for their hard work through this transition and look forward to moving ahead to my next challenge.”

Tribune Publishing owns the Tribune, Los Angeles Times, Baltimore Sun as well as newspapers in Florida, Connecticut, Virginia and Pennsylvania. Since mid-2014, shares in Tribune Publishing have lost about 70 percent of their value. Tribune desperately needed Ferro’s cash. And Ferro has long coveted the Tribune.

Media commentator Ken Doctor had the scoop late Monday evening and posted this on Politico Media:

Griffin had planned to use the new pot of money to fund a bid for the Orange County Register and Riverside Press-Enterprise ... 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.”

Who is Dearborn? He’s former CEO of Merge Healthcare, a Ferro information technology venture bought by IBM in October for $1 billion. Dearborn, 46, will be paid $600,000 a year with a 70 percent bonus as Tribune CEO, according to the SEC statement.

“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 Tribune company statement. “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.”

His bonus compensation is not tied explicitly to stock performance, according to the compensation agreement filed with the SEC.

To this point, Griffin has been pursuing acquisitions of local newspapers within Tribune Publishing’s existing markets to bolster the dwindling circulation and print advertising revenue. That’s why he purchased several suburban dailies and weeklies from Ferro’s Sun-Times in 2014. Griffin also publicly stated that he believed as young people matured, they would turn to newspapers for their news instead of smartphones and tablets.

“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 released by the company.

A day after moving into the office, Ferro spoke to Chicago Tribune staff about some of his intentions, according to a Trib report:

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.

The Los Angeles Times interviewed Doctor, who was the first to report on the change of leadership.

“Jack Griffin played an extremely bad hand at corporate poker,” Doctor told the Times. “Mike Ferro is described as a guy with big ideas who is used to being the leader in whatever he does. Why would Griffin have expected this to go any different?”