The two newspapers serving the most-populous portions of Southern California lost a combined $50 million in revenue last year.
The announcement was made at an all-staff meeting led by executives of the Los Angeles Times and San Diego Union-Tribune, which share common ownership.
The meeting was recorded by an employee and leaked to the entertainment website The Wrap.
Chris Argentieri, the president of the company that operates the two papers, accused the publications of using more cash than they generate.
The losses were illustrated by Argentieri as a “catastrophic drop in revenue for the company north of $50 million, on top of a business that was already using cash and not producing cash.”
Weighing the company down was a significant loss in print advertising, something that has been widely felt at newspapers throughout the industry as more consumers began shifting away from print products toward digital offerings like news websites, news apps, blogs and social media.
In recent years, some major publications have sought to stem the bleed of print revenue by shifting their focus toward carving out their own slice of the digital pie: Both the New York Times and the Washington Post have seen significant revenue gains since going all-in on their digital products, which cost anywhere from $10 to $15 a month to subscribe to, with access included for free if people subscribe to the print edition of the newspaper. (The Wall Street Journal uses a similar model but charges significantly more.)
Others, including McClatchy and MediaNews Group, have experienced more troubles shifting from print toward digital, with each company struggling to compete against free, local news produced by television and radio stations.
Staffers at the Los Angeles Times and San Diego Union-Tribune were hoping for a change of fortune when billionaire Patrick Soon-Shiong agreed to purchase both publications from Tronc, the debt-ridden print company spun off from the Tribune Company.
Though executives painted the cash loss as part of a long trend at the papers, they agreed that the ongoing coronavirus health pandemic made things particularly worse last year as companies began pulling their ad buying across all parts of the media industry.
Like other companies, the newspapers applied for loans through the federal Paycheck Protection Program. The company received $10 million in government relief money, which an executive said would be used almost exclusively to cover employee-related expenses.