Chicago entrepreneur steps down as Tronc’s chairman
Michael Ferro Jr, a Chicago entrepreneur and the biggest shareholder in the newspaper publisher Tronc, has stepped down as the company’s chairman, Tronc announced on Monday, hours before the publication of a report in which two women accused him of inappropriate sexual advances.
Justin Dearborn, the company’s chief executive, will replace Ferro as chairman. The move was made just weeks after Ferro helped negotiate the sale of Tronc’s crown jewel, the Los Angeles Times.
“I am confident that under the leadership of Justin and the rest of the board and management team Tronc will continue to deliver value for investors while executing the plan for digital transformation,” Ferro said in a statement.
Later on Monday, Fortune
magazine published an article in which two women made separate on-the-record accusations that Ferro had acted inappropriately toward them during private encounters.
Neither woman worked for Ferro, although they said their interactions with him had been for professional reasons.
“Over more than 20 years of leading public companies and other enterprises, Michael Ferro has never had a claim filed against him nor a settlement made on his behalf,” Ferro’s spokesman, Dennis Culloton said in a statement to Fortune that was later sent to The New York Times.
“Your on-the-record allegations appear to involve private conduct with private individuals who were not employees of Tronc or any other company he ran.
“As recently announced, Mr Ferro has retired back to private life after leading a financial turnaround of Tronc as the non-executive chairman,” the statement continued. “There will, therefore, be no other comment.”
Ferro will remain an investor in Tronc and, through another one of his companies, Merrick Ventures, will maintain a consulting position that will pay him $5 million a year through 2020.
Ferro resigned after a period of intense public scrutiny. Dissatisfaction at the Los Angeles Times spilled into public view early this year, with some employees at the paper fearing that Tronc and Ferro were making hires to try to form a separate unit that would sidestep a newsroom that had recently unionised.
Also, Ross Levinsohn, who had been consulting for Tronc before becoming the publisher of the Times, was placed on leave after National Public Radio reported that he had been accused of sexual harassment at two previous jobs.
After an investigation that Tronc said found no wrongdoing, Levinsohn was reinstated as chief executive of a newly formed division called Tribune Interactive.
In early February, Ferro orchestrated the sale of the Los Angeles Times to Patrick Soon-Shiong, a billionaire doctor in Los Angeles, for $500 million. The deal, which is expected to close soon, also included the Times’ sibling paper, The San Diego Union-Tribune, and smaller publications in the California News Group.
An audacious businessman and former owner of the Chicago Sun-Times, Ferro became Tronc’s non-executive chairman in early 2016 after his fund, Merrick Ventures, invested $44 million in the company.
Almost immediately, he began to transform Tronc, the publisher of the Los Angeles Times, the Chicago Tribune, The Baltimore Sun and other newspapers, sometimes to the bewilderment of its journalists and the rest of the media industry.
During a lengthy takeover battle with Gannett Company Inc, the publisher of USA Today, Ferro changed the company’s name from Tribune Publishing to Tronc, for Tribune online content, a move that was met with ridicule on the internet.
Ferro also introduced a technologydriven approach to journalism that included the use of artificial intelligence and machine learning. And he harboured global ambitions, with plans to open bureaus for the Los Angeles Times
in cities around the world, including Lagos, Nigeria, and Rio de Janeiro.
In September, Tronc acquired the Daily News, the nearly 100-year-old tabloid that was long a voice for New York’s working class.
Nowhere did Tronc’s decisions draw more criticism than at the Los Angeles Times. Last year, the company aggressively tried to thwart a unionisation effort by the paper’s workers, aggravating tension between employees and management.
The company also installed new leaders, including Levinsohn, a former Yahoo executive, and Lewis D’Vorkin, previously the chief product officer at Forbes,
who became the paper’s editor. Neither endeared himself to a newsroom that became set on their ousters.
Newsroom employees at the Times
also made public online reports about Tronc, including the compensation and perks received by executives, as well as Ferro’s use of a private jet that Tronc had paid to sublease from Merrick Ventures.
A regulatory disclosure in December that Tronc had agreed to pay Merrick Ventures $5 million annually on a rolling, three-year basis for consulting services also vexed employees.
Last week, Tronc laid off a number of employees at the Chicago Tribune,
including its only reporter in Washington, leaving the paper without a correspondent in the nation’s capital.
As part of the sale of the Los Angeles Times, Tronc sold its Washington bureau to Soon-Shiong.