News reports coming from Illinois indicate that the Chicago Tribune could be moving its headquarters for the second time in just 3 years. Tribune Publishing which owns the paper is pushing for a move from the paper’s current home at the Prudential Plaza. This potential move is linked to concerns related to this year’s pandemic.
The newspaper is currently holding talks with the owners of Prudential Plaza, Sterling Bay, in an attempt to buy itself out of its lease. Currently, the companies rents over 137,000 square foot of office space. For now, it is unclear how long the original lease agreement was for.
On The Road Again
This news is most surprising owing to the fact that the Chicago Tribune has only recently made a huge move to the Prudential Plaza. That move saw the company leave the Tribune Tower on North Michigan Avenue, after inhabiting the building for 93 years. Speaking at the time, Tronc CEO had this message for employees:
“While moving is always difficult, and leaving our home since 1925 brings a sense of nostalgia, this is a wonderful opportunity to create the next generation newsroom and an overall energetic and inviting environment for our entire team,”
Conditions change, however, and there is little doubt the paper expected to have a long run at the Prudential Plaza. But the events of 2020 seem to have changed the thinking.
The changes which Tribune Publishing is currently making is not exclusive to Chicago. The publisher also owns other newspapers such as Baltimore Sun and New York Daily News, both of which are in a similar position. A regulatory filing revealed that rent hasn’t been paid on most of the Tribune’s properties since March.
The publishing company is looking to renegotiate rent deals and leases across most of its subsidiaries in an effort to preserve the company’s financial stability in the long term. Alongside its quarterly results, the company stated the following in a regulatory filing on Wednesday:
“The company has been notified by a number of lessors that it is in default and certain of such lessors have formally filed complaints in their local jurisdictions, the company is negotiating with such lessors on terms of the rent relief and the lessors’ remedies and is responding timely to all filed complaints.”
The filing also detailed how the company has secured ‘rent abatements and deferrals’ for 11 leases, and there are a further 13 which have been modified.
Whilst the CEO of Tribune Publishing Terry Jimenez feels confident in the measures that the company has taken, it leaves a lot of uncertainty for those working at the Chicago Tribune. Jiminez’ plans of “focusing on our fixed cost infrastructure, reducing our real estate footprint, and reducing compensation expense” have come at a tough time for many in the industry.
Talks with Prudential Plaza are still in their early stages, but Tribune Publishing will be pushing to get this resolved as soon as possible. In terms of where the Chicago Tribune may relocate to, there has been no mention of potential alternatives. To further add to the uncertainty, both Sterling Bay CEO Andy Gloor and Tribune’s Max Reinsdorf refused to comment on the situation.
The hedge fund Alden Global Capital, the newspaper’s largest shareholder, has been described as the ‘grim reaper’ of newspapers. The hedge fund has been accused of bleeding newspapers dry and many were concerned earlier this year that the Chicago Tribune was firmly on its radar. Back in February, two investigative reporters from the Tribune sent a letter to the hedge fund’s president Heath Freeman:
“Press commentary about your media acquisitions has been relentlessly negative,” wrote David Jackson and Gary Marx “Is there a counter-argument this coverage has not reflected, or evidence that has been overlooked or ignored?”
These concerns will have been heightened since the news that the Tribune was possibly on the move again, which stinks of cost slashing. It is generally thought that the hedge fund is using this year’s pandemic as a smokescreen for nefarious intentions which they have planned from the outset, and the Tribune, its staff and its readers will be the ones paying the price.