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(Al Hartmann | The Salt Lake Tribune) Salt Lake Tribune Editor and Publisher Terry Orme holds a meeting with staff members of The Salt Lake Tribune) on Wednesday, April 2, to discuss changes at Digital First Media, the paper's owner.
Salt Lake Tribune braces for more cuts as owner kills digital initiative
Media » Digital First Media ends news-sharing project as part of $100M-plus reduction.
First Published Apr 02 2014 08:26 am • Last Updated Apr 02 2014 10:54 pm

The Salt Lake Tribune’s top editor said Wednesday the newspaper was preparing for sizable budget cuts after its corporate owner killed a digital initiative once considered central to an evolving business strategy.

New York-based newspaper chain Digital First Mediaannounced it is closing Project Thunderdome, an experimental news-sharing arrangement involving up to 75 of its newspapers. Thunderdome, launched in late 2011 to centralize key parts of national news gathering and production, is being eliminated in a larger quest to shave more than $100 million in a companywide initiative dubbed "Catalyst."

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Tribune Editor and Publisher Terry Orme said DFM managers were seeking cuts of up to 10 percent as they readied budgets for the coming fiscal year, which starts July 1. The Tribune, Orme said, hoped to achieve those reductions through savings in syndicated content, newsprint and by cutting staff, either through attrition or layoffs.

"Those are the things that are swirling right now," Orme told a gathering of concerned Tribune staffers Wednesday. "Do I think there will be something definitive to report soon? Today’s events tell me, yes, I think there will be."

The announcement by DFM, one of America’s largest newspaper chains, follows years of steady declines in its advertising revenues. With 280 daily and weekly newspapers in 18 states, DFM has struggled to reinvent a revenue model as once-mass audiences fragment and readers spread their attention to Web, social media and mobile technologies for news and information.

It also renewed speculation that hedge fund and majority DFM stockholder Alden Capital Group might be preparing to sell newspaper properties, including The Tribune, Utah’s largest daily. An official at Alden headquarters in New York declined to comment on the hedge fund’s plans.

Thunderdome, with its 45-member editorial staff, had been a centerpiece of DFM’s digital strategy, conceived as a way to tap DFM’s national reach to offer newspapers in its chain in-depth and attractive reportage in news, sports and features with strong multimedia components that single publications could not produce on their own.

In shuttering a project previously vaunted as central to DFM’s future, CEO John Paton said Thunderdome’s demise reflected improved skills by newspapers to generate their own data journalism, video production and Web content.

"And that means it is time to change again," Paton wrote Wednesday on his blog.

Paton also announced the departure of DFM Editor-in-Chief Jim Brady, who leaves May 1, along with Thunderdome Editor Robyn Tomlin. Steve Buttry, DFM’s digital transformation editor and a senior supervisor of Thunderdome, confirmed Wednesday in a social-media post he was leaving DFM as well.

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In September, The Tribune saw a staff reduction of 20 percent, with 17 full-time and two part-time employees let go, along with the retirements of Editor Nancy Conway and Editorial Page Editor Vern Anderson.

Newspaper magnate William Dean Singleton also stepped down as Tribune publisher, a post subsequently filled by Orme, who had been managing editor.

Thunderdome’s closure is seen by some as a sign that Alden Global Capital, a privately owned hedge fund based in New York, may be readying a sale of some or all of its newspaper properties, which include major publications in California, New England, Philadelphia and Texas.

Formed in 2007, Alden is a group of funds whose core investments focus on so-called distressed assets, with holdings worldwide totaling at least $2.8 billion. It controls DFM through a company known as 21st Century Media Holdings.

DFM’s key Utah properties, in turn, are The Tribune and The Park Record in Park City.

Through initiatives in recent years led by Paton, DFM has sold several of what it has called "legacy assets" of papers in its chain, most notably a 36-acre parcel and printing facilities used by the San Jose Mercury News and The Tribune’s share in printing operations in West Valley City.

The Tribune’s press sale was accompanied by a renegotiation by DFM of the Salt Lake City paper’s revenue sharing with its business partner, the LDS Church-owned Deseret News. In a formal complaint to the U.S. Department of Justice, a group of former Tribune employees has sought to block that rewriting of the Tribune-News joint-operating agreement, which now gives the News 70 percent of profits from the newspapers’ longtime partnership.

That split, put in place last fall, replaced a decades-old arrangement that accorded 58 percent of profits to The Tribune and 42 percent to the News.

Wednesday’s announcement comes on the heels of a Dec. 30 merger thatbuilt 21st Century Media Holdings from newspapers previously held by MediaNews Group and the Journal Register Co.

The combined company, under DFM’s control, draws an estimated $1.3 billion in yearly revenues and oversees 800 print, Web and mobile publications, including The Tribune, which, along with The Denver Post, was previously a MediaNews Group newspaper.

At the time of that transaction, which flowed from a series of bankruptcy filings, Paton had predicted streamlining of upper management and other corporate functions.

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