• by Erik Sass , Staff Writer @eriksass1, April 4, 2016

Tribune Publishing may be in deeper financial trouble than previously acknowledged, according to Crain’s Business Chicago, which took a close look at the troubled publishing company’s business following the abrupt exits of both its chief financial officer and its external auditors last week.

Crain’s noted a number of additional pieces of evidence pointing to financial distress and accounting woes, including Tribune’s statement of  “material weaknesses” in its internal financial reporting two years in a row, including chaos in basic functions like tracking newspaper inserts and sales commissions.

More recently, the surprise decision to bring in longtime rival Chicago Sun owner Michael Ferro as an investor, followed by his swift removal of former Tribune CEO Jack Griffin last month, also points to financial crisis.

According to accountants interviewed by Crain’s, the likelihood that the company is in financial distress will have wider repercussions, by making banks and vendors leery of further lending, or prompting them to offer harsher terms. From a business perspective, advertisers may question the transparency of the company’s ad tracking operations.

After separating from Tribune Broadcasting last year, Tribune Publishing is still saddled with debt assumed during the transaction to take the company private, a deal engineered by real-estate mogul Sam Zell in 2007. The company has also remained active on the acquisitions front, buying the San Diego Union-Tribune in May 2015 and attempting to buy the Orange County Register from a bankrupt Freedom Communications last month. (The latter deal was scuttled by the DOJ on anti-monopoly grounds.)

In its most recent financial statement, Tribune disclosed that it carries $833 million in total liabilities and equity, up from $677.7 million in the fourth quarter of 2014, and paid a total of $26 million million on interest payments, up from $9.8 million.

The company also faces the same headwinds as other big regional newspaper publishers.

According to its most recent financial results, the company’s total advertising revenue slipped 1.9% to $268 million in the fourth quarter of last year, with digital revenues down 9.2% to $45.1 million, contributing 16.8% of total revenues. Tribune’s total income fell 71.2% from $86.7 million in full year 2014 to $25 million in 2015.