Belo Announces Layoffs, Strategy Shift

Sep 29, 2004  •  Post A Comment

Belo on Wednesday said it would lay off 250 people, re-evaluate executives’ bonuses and shift its operating strategy in the wake of a circulation scandal at the company’s flagship newspaper, The Dallas Morning News.

Most of the layoffs will hit the Morning News, though the company left open the possibility that layoffs might take place at its Dallas/Fort Worth ABC affiliate, WFAA-TV. The layoffs should happen by Nov. 1.

“Belo’s total revenue from all sources in the Dallas/Fort Worth market has been essentially flat since 2001, making changes in the expense structures of the Morning News and WFAA-TV … necessary,” the company said in a statement.

Despite the shift, Belo stood by its financial guidance for the third quarter, and Belo’s shares were little changed at $22 in midday trading Wednesday.

The shift in operating focus came as the company completed its probe of the circulation overstatement at the Morning News. That analysis resulted in Belo reporting a 5 percent decline in daily circulation for the first nine months of 2004, compared with a year ago, and a 12 percent year-over-year drop in Sunday circulation for the same period.

At the same time, the company said it would look for ways to redirect $10 million in expenses from various businesses to marketing efforts at Belo’s biggest contributors of revenue of cash flow.

Belo already has ceased operations of its local cable news operations in Houston and San Antonio, and handed control of a third cable news channel in Raleigh, N.C., to its former partner in the cable news venture, Time Warner Cable. That move will spare the company around $10 million in annual losses.

Belo executives are also weighing the fate of its Texas Cable News channel, which has had difficulty gaining analog carriage from Time Warner Cable in Houston, San Antonio and Austin, Texas, as well as other cable operators in Texas, including Cox Communications. The channel generates around $1.7 million in annual losses, the company said.

Other steps being taken will be a reconsideration of the funding of the company’s online business, Belo Interactive, as well as the consolidation of a marketing unit and closure of a conference business.