Baltimore Sun CEO Forced Out in 'Shakespearean' Power Play

By PATCH CHICAGO and Deb Belt

BALTIMORE, MD — A Chicago investor who just put more than $40 million into Tribune Publishing -- the parent company of the Baltimore Sun, Capital-Gazette in Annapolis and other Maryland newspapers -- has ousted the CEO.

Tribune Publishing CEO Jack Griffin praised the stock deal he set up last month that landed Michael Ferro as the Tribune’s largest shareholder and non-executive chairman. Now, Griffin has been removed as CEO.

The company filed a statement with the Securities and Exchange Commission Tuesday morning announcing the leadership change.

Justin Dearborn, who has worked with Ferro since 1997, is the new CEO.

The media company owns the Baltimore Sun Media Group, which includes The Capital in Annapolis, the Carroll County Times, The Aegis in Harford County, the Howard County Times, and Baltimore’s alternative weekly City Paper, says the Sun.

Executive changes were also made at The Sun Tuesday, where Richard J. “Rick” Daniels was named publisher and CEO. He had served as the interim publisher since September.

Ferro, the principal partner in the ownership team of the Chicago Sun-Times, invested $44.4 million in Tribune Publishing earlier this month for a 17 percent stake in the company. The day he assumed his ownership stake, Ferro moved from his Sun-Times office into the chairman’s office at the Tribune building and began calling the shots.

Ferro’s purchase set off speculation that major changes would come to the Tribune, as well as fears Chicago would become a one-newspaper city with an eventual merger of the Trib and Sun-Times newspapers.

The company will announce further personnel and strategic moves on March 2, reports media columnist Robert Feder at RobertFeder.com.

Tribune Publishing owns the Chicago Sun-Times, Los Angeles Times, Baltimore Sun as well as newspapers in Florida, Connecticut, Virginia and Pennsylvania. Since mid-2014, shares in Tribune Publishing have lost about 70 percent of their value. Tribune desperately needed Ferro’s cash. And Ferro has long coveted the Tribune.

Media commentator Ken Doctor had the scoop late Monday evening and posted this on Politico Media:

Griffin had planned to use the new pot of money to fund a bid for the Orange County Register and Riverside Press-Enterprise ... Griffin intended that buy to be the linchpin of his California strategy: Tribune, owners of The Los Angeles Times, would be a company with half its revenues in the Golden State. It would have been the most important step in his overall strategy to buy up more metro assets in Tribune’s biggest markets.

Instead, Ferro surprised Griffin and moved the board he had just taken command of to terminate the CEO. Griffin had not expected the man he had brought in as essentially a partner to push him out. “This is almost Shakespearean,” said one savvy industry observer. “The CEO brings in a new shareholder as his ‘partner’ and his ally’s first move is to kick him out. Act One is Romeo and Juliet and Act Two is Julius Caesar.”

After establishing his financial stake, Ferro immediately began lining up board of directors support to fire Griffin, according to Doctor.

Who is Dearborn? He’s former CEO of Merge Healthcare, a Ferro information technology venture bought by IBM in October for $1 billion. Dearborn, 46, will be paid $600,000 a year with a 70 percent bonus as Tribune CEO, according to the SEC statement.

“I believe Tribune Publishing has a significant opportunity to leverage technology to increase the value of its content and distribution channels,” Dearborn said in a Tribune company statement. “Although this is a different medium than my last technology company, it has the same challenge on how to create the highest value for our content.”