Tribune Company Bows to Street: Fires LA Times Editor

The Tribune Company has seen its stock under valued by Wall Street for some time now, and the majority stock holders have been outraged, but that hasn't prevented them from forcing the company to take action that the Street deems appropriate for the stock's value to rise back to where it belongs.

The LA Times has long been noted as one of the plushes plumbs, from a newswriter's standpoint, meaning the editorial staff is overstaffed and very well paid. Nevertheless, the newspaper has shown a consistant and even enviable profit over the years. So what's the problem?

The Street loves to see reorganization in a company. Stasis is anathema to the Street's willingness to value stock prices, and the one thing the Street loves more than anything is employee reductions. (That means "layoffs," "people being fired," "outsourcing.")

So the long and short of it is that one of the country's top five newspapers, a business that has consistantly run at a 20 percent profit margin, and whose business is to provide a service beyond the notions of simple quarterly profits, is being sacrificed to the Street's obsession with the next quarter's earnings.