BANG-EB publisher steps down

Dear Employees:

We’re announcing a leadership change for our East Bay newspapers. After many years of dedicated service, John Armstrong will be leaving the company effective October 17. We’re very appreciative of the effort that John has put forth during his role as Publisher, and earlier as Editor, and wish him good fortune for the future.

David Rounds, San Jose Mercury News Vice President of Circulation, will replace Armstrong as the new President and Publisher of our East Bay newspapers. David is a career newspaper professional with more than 35 years’ experience in newspaper advertising, circulation and operations. The first half of his career focused on advertising and included work at the Independent in Livermore, ANG newspapers in Pleasanton, Hayward and Fremont, where he held numerous management positions in retail and classified advertising. In 1989, he joined Lesher Communications in the East Bay working at the Valley Times, West County Times, Antioch Ledger and the Contra Costa Times in various positions including advertising manager, general manager, group Vice President, and Vice President of Circulation. David has served as Vice President of Circulation for the Mercury News since January 2005.

Dan Smith, East Bay Circulation Vice President, has been named Vice President of Circulation for the Bay Area Newspaper Group. He will now oversee all circulation efforts for the San Jose and East Bay consolidated operations. We are enthusiastic and optimistic regarding the opportunities associated with one coordinated, strategic effort to generate increased circulation sales and improve our customer retention for the BANG papers. Dan worked for the Mercury News from 1982 through 1995. He is very familiar with the market and has the benefit of having worked with a majority of the South Bay circulation team.

Michael Turpin, San Jose Advertising/Marketing Vice President, has been named Vice President of Advertising/Marketing for the Bay Area Newspaper Group. Michael will oversee all advertising and marketing efforts for the San Jose and East Bay Consolidated operations. We’re equally optimistic that a coordinated strategic effort in advertising and marketing for the BANG operations will be more effective and efficient in reaching and satisfying our advertising customers. Mike Jung, East Bay Vice President of Advertising, will report jointly to Michael Turpin and David Rounds.

Michael joined the Mercury News in 1999 as major accounts manager and later assumed the key accounts group in 2002. In 2005, Michael assumed responsibilities for all of retail advertising including overseeing the assembly of a single major accounts sales team after the MediaNews purchase of The Mercury News and Contra Costa Times. In 2007, Michael became the Vice President of Advertising for The Mercury News and earlier this year assumed responsibility for national advertising, marketing and the publishing of the Milpitas Post, Silicon Valley Community Newspapers and the Daily News Group.

While this is a challenging time in the newspaper industry, I remain convinced that we will not only survive but also thrive in the coming years. We do face immediate hardships associated with the “sea change” that is occurring in the newspaper industry coupled with a stressed economic environment. That said, the economy will eventually stabilize and newspapers will successfully navigate their way through this difficult environment.

Newspapers remain the dominate provider of local news and advertising content. It is our core competency that no other media can match. Local news and information will always be important as people want to know what is happening with the schools their children attend, the safety of their neighborhoods, the roads they drive on, the taxes that the pay, etc. So, we have a core competency that no one else really has and that people really want – the only thing that is changing is how some people want to receive that information. How we adapt our business model to best fulfill the desires of our customers is the question we must answer – and we find the answer.

The aggregate reach of our print and online customers is increasing. We reach more people today than we have in the past – we’re a growing media. Not too many of our competitors can make that claim. I’m confident that newspapers will successfully find our way through these challenging times.

Thank you for everything you have done to make our newspapers better and to get through our current challenges. Please join with me in wishing good luck and best wishes to John, David, Dan and Michael.

Mac Tully

TO MEMBERS OF THE MEDIA:

REGARDING NEIL, BROWN, WEINSTEIN, ROCHE, LEVIN & NELSON vs. ZELL, ET AL

LOS ANGELES, Sept. 16, 2008 -- Today current and former employees of the Los Angeles Times and the Tribune Company filed a class-action lawsuit in federal court against Sam Zell, a Chicago billionaire real-estate speculator who in December 2007 took control of the Tribune Company in a controversial deal that has mired the company in more than $13 billion of debt. The lawsuit was filed by Joseph Cotchett and Philip Gregory of the law firm of Cotchett, Pitre & McCarthy.

As current and former members of the Employee Stock Option Plan that owns 100% of the Tribune Company and participants in various Tribune retirement plans, the plaintiffs filed this action alleging it is time to call the Zell-orchestrated acquisition what it really is: A scam. The lawsuit contends that, since the inception of the deal, it appears that Zell and his accessories have planned to enrich themselves, tax-free, by perverting laws passed by Congress intended to benefit rank and file American workers. The employee-owners of Tribune Company have everything, including their retirement plans, at great risk and little to gain in this deal, while Zell has everything to gain and little at risk. Among the deal's outrages outlined in the complaint: Zell has set up a mechanism to buy 40% of the company – valued at more than $8 billion at the time the ESOP took ownership – for as little as $500 million. It’s a classic grift, played out under the cover of legal technicalities. The real losers in this deal, however, are Americans who rely on news and information collected and disseminated by the respected Tribune news organizations.

The plaintiff-employees in this suit do not seek to enrich themselves. Rather, their announced intentions are: to protect Tribune Company’s pension and retirement funds; to give the employee-owners a place at the table with regard to management of their assets; and to remove Zell and his cronies from the Tribune Company’s board in order to save what is left of a still great news gathering operation.

In the 1970s and later in the 1980s when Senators Bob Dole (R-Kansas), Russell Long (D-Louisiana) and others in Congress spearheaded efforts to promote ESOPs with generous tax benefits, the intent was to empower employees eager to own and manage the companies where they work. When it comes to Tribune Company’s ESOP, nothing could be further from the truth. Employees were never asked if they wanted to own Tribune Company. They had no opportunity to question the wisdom of saddling a media company with $13 billion in debt at a time when the industry faces serious challenges. Even though they are nominally the owners, they have no voice on the company’s board and no say in its management.

When Zell hung “You own this place now” banners at the Los Angeles Times, employees could not know the high price they would pay for this “privilege.” According to the complaint, Zell has de-funded employees retirement packages, raided the employee pension fund for more than $400 million, and eliminated more than a thousand Tribune Co. jobs. Meanwhile, Zell and his band of publishing rookies are wrecking the company’s marquee properties – including the Los Angeles Times, the Baltimore Sun, and the Chicago Tribune – alienating readers by launching aimless redesigns while dramatically cutting coverage. Seemingly ignorant of journalistic ethics, they have, for instance, turned control of the Los Angeles Times Magazine over to the advertising staff, with no indication to the reader that this product is now a “pay-to-play” advertorial. All the while, revenues have continued to decline.

The saga of the Los Angeles Times follows a familiar path in American media. Los Angeles’ Chandler family controlled the newspaper for generations, making it the flagship of the powerful Times-Mirror Company. In 2000, the Chandler heirs merged the family-controlled company with the Chicago-based Tribune Company. Even considering the debt to finance the merger, the company maintained profit margins in excess of 20%.

Despite a slowing economy, a precipitous drop in ad revenue in the real estate, classified, and automotive sectors along with the de-monetizing of content put on the web and the spiraling cost of newsprint – the Tribune Company continued to be profitable throughout this decade. Without the staggering debt load from the Zell deal, the Los Angeles Times would be solidly profitable today – without eviscerating news gathering operations.

It is flat wrong to regard the Tribune Company's troubles as the death throes of the newspaper industry. Americans are not rejecting the industry’s editorial product. The Los Angeles Times has millions more readers than it did a few years ago – over 20 million discrete readers at latimes.com in August 2008. In that month alone, the paper chalked up more than 120 million page views. Its besieged editorial staff continues to produce some of America’s finest journalism.

The media landscape is changing and, yes, newspapers are just learning how to navigate this new world. Unfortunately, current management is making things worse, led by Zell and his Chicago gang who can't shoot straight. Zell does not consider himself a publisher and has shown nothing but contempt for journalism. He notoriously said “F… you” to an employee-photographer who dared question his leadership. Speaking to the Washington bureau of the Los Angeles Times, Zell referred to the staff as “overhead, not producing any revenue.” Zell’s history is specializing in profiting from the purchase and sale of distressed properties. He has said he expects to make a fortune for himself during his tenure at the Tribune Company. And, as it stands, he can do that while leaving the coffers of the Tribune ESOP empty and the readers of the Los Angeles Times, the Chicago Tribune and Tribune Company’s other news outlets without an authoritative local source for news and information.

Should these institutions, vitally important to the life of the nation – indeed, never more so – be allowed to fall victim to ruthless corporate raiding and the pump-and-dump machinations of predatory “investors”? News organizations are both businesses and public trusts. A free press is the only business stipulated by the Constitution. No other entity – no website, no blogger – is on the horizon to replace the boots on the ground around the world providing Americans with the information we need to function in a global economy. The Los Angeles Times, alone, spends $2 million a month to support its Baghdad bureau, making its war coverage among the finest in the world. If Zell and his cronies continue to cut the staffs of these news organizations, it means inevitably that they will give their readers less content that is valuable to them. As these newspapers become less valuable to readers, they become less valuable to advertisers as well.

To that point, Zell and his cronies say they plan to close the Los Angeles Times’ Baghdad bureau.

-- Dan Neil, Corie Brown, Henry Weinstein, Walter Roche, Myron Levin & Jack Nelson

For more information contact:

Attorney for the Plaintiffs Plaintiffs’ spokesman

Joseph W. Cotchett Dan Neil

Philip L. Gregory (818) 508-1000

Cotchett, Pitre & McCarthy

San Francisco Airport Office Center

840 Malcolm Road, Suite 200

Burlingame, CA 94010

jcotchett@cpmlegal.com

pgregory@cpmlegal.com

(650) 697-6000

FOR IMMEDIATE RELEASE
Thursday, September 4, 2008 4:00 P.M. CDT

VOLUNTARY SEVERANCE PROGRAM IS COMPLETED

DALLAS – A. H. Belo Corporation (NYSE: AHC) said today that the voluntary severance offer (VSO) extended to the Company’s newspaper employees in July has been completed. Overall, 413 employees will leave the company under the VSO – 270 at The Dallas Morning News, 23 at The Providence Journal, and 120 at The Press-Enterprise. The total cost of the VSO is approximately $11.2 million, the majority of which will be expensed in the third quarter.

In addition, an involuntary reduction in force will be completed by mid-to-late October to achieve the necessary remaining workforce reductions. The expense related to the reduction in force is estimated at $2.4 million and will be recorded in the fourth quarter. The reduction in force is limited to the news, production, customer retention call center, and Al Día departments at The Dallas Morning News; the news, consumer sales, packaging and production departments (excluding pressroom) at The Press-Enterprise; and, the news, editorial, advertising and promotion departments, subject to contractual obligations, at The Providence Journal.

The combined workforce reductions are expected to result in a savings of more than $29 million on an annualized basis.

Robert W. Decherd, chairman, president and Chief Executive Officer, said, “These job actions are part of a restructuring of our newspaper operations that accelerates the allocation of resources to promising new print and online products while focusing our workforce on A. H. Belo’s local content creation and sales capabilities. We greatly appreciate the dedication and service of all A. H. Belo employees who are leaving the Company under the voluntary severance program. I’m confident that we’re taking the right steps to realign our resources to meet consumer and advertiser needs while maintaining the exceptional quality of A. H. Belo’s journalistic products.”

A copy of the letter sent to operating company employees today by Jim Moroney, executive vice president of A. H. Belo and Publisher and Chief Executive Officer of The Dallas Morning News is available at www.ahbelo.com/invest.