Tribune’s tronc Rebuffs Gannett Takeover with Rebranding

In a surprising move, Tribune Publishing has rebranded itself as tronc, Inc., launching a redesigned website and jumping ship from the New York Stock

Subscription News: Tribune's tronc (TRNC) Now Live on NASDAQ

Source: tronc

In the midst of an aggressive takeover attempt by Gannett, Tribune Publishing Company, the parent company for the Los Angeles Times, Chicago Tribune, Hartford Courant, Orlando Sentinel and other media outlets, has rebranded itself, changing its name to tronc, Inc. (lowercase T). tronc stands for “tribune online content,” according to a press release. tronc, which boasts 60 million monthly users across its digital assets, also jumped from the New York Stock Exchange (TPUB) to NASDAQ (TRNC). The changes went into effect June 20, 2016.

As part of the rebranding, tronc has a revamped website which curates content from its many digital properties. Rather than separating the news by media outlet, tronc.com serves up news by category: News, Sports, Entertainment, Business, Real Estate and Travel. tronc reproduces the stories on its corporate website, now in beta, but providing a link to the original story in the byline.

Subscription News: Tribune's tronc (TRNC) Now Live on NASDAQ

Source: tronc

In a press release about the change, tronc chairman and controlling shareholder Michael Ferro commented on the rebranding:

“Our industry requires an innovative approach and a fundamentally different way of operating. Our transformation strategy – which has attracted over $114 million in growth capital – is focused on leveraging artificial intelligence and machine learning to improve the user experience and better monetize our world-class content in order to deliver personalized content to our 60 million monthly users and drive value for all of our stakeholders. Our rebranding to tronc represents the manner in which we will pool our technology and content resources to execute on our strategy.”

These most recent changes are part of the plan the company announced earlier this year to transform its business. Part of that plans include the following changes, already in progress:

  • Reorganizing the business into new operating and reporting units to increase transparency and drive corporate focus.
  • Launching troncX, a content curation and monetization engine, to combine existing assets with new artificial intelligence technology to accelerate digital growth. In a 30-day pilot of this AI program which involved 1 percent of its traffic, tronc saw a 400 percent increase in the yield on programmatic revenue.
  • Partnering with Nant Capital and Dr. Patrick Soon-Shiong to accelerate the transformation from a legacy news organization to a technology and content-driven company. Soon-Shiong joined the company as vice chairman of the board of directors.

“I am excited to join the Company as Vice-Chairman during this pivotal moment of transformation and revitalization,” said Dr. Patrick Soon-Shiong. “Today’s announcement underscores the Board’s commitment to completely transform the Company and the industry to protect the vital role that free speech plays in our communities. In the wake of significant disruption, it is time to bring the legacy publishing business into the modern era and leverage innovative technology – from machine learning to artificial intelligence – to create long-term sustainability and vitality.”

Healthcare entrepreneur Soon-Shiong is also an investor in the company, putting in $70 million in exchange for a 13 percent stake in tronc, said media analyst Mathew Ingram for Fortune.

tronc’s rebranding efforts have temporarily trumped the news about Gannett’s aggressive attempts to acquire Tribune Publishing which began in April. While large Tribune Publishing shareholders including Oaktree Capital Management and Towle & Co. have vocally supported the possible buyout, chairman Ferro, the controlling shareholder, has been vehemently opposed to it, said the Los Angeles Times.

On the same day, tronc announced its rebranding, a Tribune Publishing shareholder, Capital Structures Realty Advisors LLC, filed a lawsuit against Ferro and the rest of the board, trying to block the sale of Soon-Shiong’s 13 percent stake in the company, said the Wall Street Journal. The goal of the lawsuit was to call out Ferro and the board for diluting shares.

“Ferro and the board sold 13% of the company to defendant Soon-Shiong for one reason, to consolidate their control over Tribune in the face of mounting pressure from the company’s stockholders,” said the lawsuit.

As tronc looks to the future with its reorganization and rebranding, the media world and Twittersphere have not been kind. Numerous jokes have been made about the new name, the Washington Post criticized the June 2 announcement as being the “worst press release in the history of journalism,” and Recode compared tronc’s corporate rebranding video to Adult Swim parodies. The initial announcement and the video are both rich with buzzwords, but light on substance on how things will actually change for tronc and how that translates into revenue generation and profitability.

Subscription News: Tribune's tronc (TRNC) Now Live on NASDAQ

Source: tronc

What’s next for tronc? In addition to overcoming the negative publicity, the company needs to address Gannett’s continued efforts to acquire it. Gannett’s latest offer sat at $15 a share, more than a dollar above tronc’s current share price of $13.49 (as of 12:25 PM on June 30, 2016). Shareholders like Oaktree do not support Ferro’s plans for the company’s reorganization and will continue to push for change or acquisition, said Ingram.

Insider Take:

Where do we begin? There are so many issues here, but for now, we’ll focus on the rebranding. Our opinions don’t stray far from what everyone else is saying. The name is not appealing nor intuitive, and the beta version of tronc’s new corporate website leaves a lot to be desired.

For example, the corporate website at tronc.com does not make it clear who tronc is. For example, we could not find any mention of who the company is or represents. There is no listing of media properties or other assets owned by tronc or who the board of directors is. The corporate profile on the investors’ page is one paragraph, and it mentions their 92 Pulitzers and its 60 million monthly visitors, but it gives no other information about the company. Even the financial tear sheet is sparse, and you have to dig to find any contact information for the company.

For a company who wants to rebrand and be taken seriously, they are sharing very little detail with their intended audience, whether they are readers or investors. Why? Did tronc launch the rebrand prematurely to stave off acquisition offers, or are they still trying to figure out who they are? They need to solve this rebranding confusion and lack of detail quickly, because it is indicative of much larger problems.

Meanwhile, we’ll report on any future acquisition attempts of the new tronc by Gannett.

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