TRONCCHAIRMAN FERRORETIRES, SCANDALERUPTS
Ferro steps down from Tribune parent company before two women’s sexual misconduct allegations reported by Fortune
Two women have come forward with allegations that Michael W. Ferro Jr. — who surprised the newspaper industry Monday by retiring as chairman of the company that owns the Chicago Tribune — made unwanted sexual advances toward them during separate late- night business meetings in 2013 and 2016, according to Fortune magazine.
Kathryn Minshew is alleging she met with Ferro in his corporate apartment in 2013 to discuss potential funding for her career- advice startup, The Muse, when she said he poured two glasses of bourbon and — giving one to Minshew — put his hand on the back of her head and pulled her face in for a kiss.
Although the move was forceful enough that she couldn’t pull away, she told Forbes she was able to turn her head so that Ferro’s lips landed on her cheek.
Hagan Kappler was nine weeks pregnant during a private business dinner in 2016 with Ferro, who allegedly wrapped his arms around her from behind. She told him he was in her space and that she didn’t like it. Then Ferro did it again, this time groping her breast, she said.
The Fortune report came hours after Ferro, 51, announced he was resigning from Tronc, short for Tribune Online Content. As ofMonday evening, he had yet to respond to the allegations leveled by Minshew and Kappler.
The Chicago Sun- Times could not reach either woman for commentMonday evening.
The Fortune story landed at a time when Tronc is in chaos, with workers at the Tribune considering unionizing in the wake of the second round of layoffs in the past four months.
Ferro made millions as a tech mogul before taking an interest in journalism, founding a company that bought the Sun- Times in 2011.
Ferro donated his SunTimes shares to charity in 2016 to take a $ 44.4 million stake in Tribune Publishing, which he renamed Tronc. His departure as Tronc chairman comes as Tronc is set to close on a $ 500 million sale of the Los Angeles Times and San Diego UnionTribune to local ownership.
Justin Dearborn, CEO of Tronc, has been named to replace Ferro as chairman of the Tronc board. Besides the Tribune, the company also owns the New York Daily News, Orlando Sentinel and several other national newspaper titles.
“Michael retires having created considerable shareholder value for the company in just two years as chairman of the board,” Dearborn said in a statement releasedMonday. “Prior to Michael being elected Chairman in 2016, the company had a market capitalization of approximately $ 200 million, $ 41 million of cash on hand and nearly $ 500million of debt and pension liability as compared to amarket capitalization today that represents a more than 300 percent improvement, a greater than 400 percent improvement in cash at the end of 2017 and significantly lower debt.
“Additionally, the California News Group transaction he engineered for $ 500 million in cash plus the assumption of $ 90 million in pension obligations leaves the company in its strongest financial position in more than a decade. We look forward to Michael’s continued support as an investor and wish him the best in his retirement.”
“I want to thank everyone who worked so hard over the last two years creating great journalism, strengthening the company’s financial position and delivering significant value for shareholders,” Ferro said in the company statement.
Dearborn became Tronc CEO in February 2016.
SEC filings last year revealed that Tronc had entered into a 3- year/$ 15 million consulting contract with Merrick Ventures — a private equity firm where Ferro serves as CEO.
A spokeswoman for Tronc did not respond when asked if that contract would be revisited. She also did not say what, if any, impact the publishing of Fortune’s story had on the timing of Ferro’s resignation.
Last week, a dozen journalists at the Chicago Tribune were laid off. One day later, Tronc disclosed that Dearborn and CFO Terry Jimenez had received raises.
Ferro’s resignation comes two months after Ross Levinsohn, the publisher of the Los Angeles Times, was put on unpaid leave after NPR reported he had been named as a defendant in two sexual harassment lawsuits. NPR also reported that “his conduct in work settings over the past two decades has been called into question repeatedly by female colleagues.”
Ferro and the Tronc board cleared Levinsohn of wrongdoing.