It's the end of the month. Your rent/mortgage is paid. You've put food on the table for your family. All the bills are paid. You take a look at your financial spreadsheet and notice there's a surplus....a big surplus. It doesn't occur very often so you're not quite sure what to do with this extra money. Maybe you put it in the bank so you'll have it for a rainy day. Maybe you'll invest it in yourself or your family to make life better. It's a tough decision because it's so rare that it happens. One thing you probably wouldn't do would be to give it away.
The same thing occasionally occurs to businesses. Occasionally, after taking care of their obligations, they have a few extra bucks. In some cases, the extra bucks are more than a few...a lot more. That's the situation our friends at Tribune Publishing found themselves in recently.
Tribune Publishing owns newspapers and other media outlets throughout the United States. They include the Chicago Tribune and the website you're reading this blog post, ChicagoNow. In recent years, there have been massive cutbacks, buyouts and layoffs at all their properties. Last year, they sold the Los Angeles Times and the San Diego Union-Tribune for $500 million. That left the company a lot smaller, leaner and debt-free. It also left them with a lot of extra cash in its coffers.
The question becomes, what are your going to do with that surplus of money. What can you do with an extra fifty-six million dollars?
The first thought would be maybe you can hire some journalist to help the newspapers that have become short staffed? Maybe the Chicago Tribune could have a dedicated writer to work the Chicago White Sox beat? Maybe they could use the money to cover the Chicago Sky basketball game and not use an Associated Press story? Maybe they can give raises to their current journalists? Maybe the money will help increase the mid-week newspapers from an embarrassing thirty page or so size? Or maybe they can toss a few bucks at one of their websites, where all the writers work for free/exposure so they could have a holiday party without the bucks coming out of their pockets? A lot of maybes.
Instead of doing any of the above and investing in their properties, they decided to hand out a one-time special dividend to their shareholders. The person who received the biggest payout was Michael Ferro. He's going to receive a dividend payout of $13.6 million.
For those of you who aren't familiar with him, Mike was the former chairman and biggest shareholder of Tronc, which was the previous name of Tribune Publishing. He was forced out last year after being accused by two women of making inappropriate advances. Ferro was also accused of making an antisemitic slur, calling a Los Angeles businessman billionaire part of a Jewish cabal that ran the city. Tribune Publishing paid out more than $2 million to keep this from going public.
When Ferro left the company, he cashed out a lot of his stock for more than $200 million. That's TWO HUNDRED MILLION DOLLARS! As if that wasn't enough, he also was given a three year consulting deal for $5 million per year.
So when you have that windfall of money, why not make Ferro a little richer rather than reward the people who are actually doing the work. It's just another story from this company that makes you feel like you need a shower after reading it...and even then you won't feel clean. It's just another story of misplaced priorities and greed.
The name may have changed from Tronc to Tribune Publishing, but the behavior remains the same. Meet the new boss. Same as the old boss.
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