Tribune Co. (NYSE:TRB) released a summary of its revenue and newspaper advertising volume for May and no one can accuse the media outfit of sensationalism in its reporting. Reading between the lines suggests that some of its difficulties may stem from the movie industry's stingier spending habits.

Consolidated revenue rose just 3.2% to $467 million from $452 million in May 2003 and growth in advertising spending for the publishing group was slower than expected. To make up for the shortfall, Tribune plans to cut staff and expenses. The firm cited flat retail ad revenue as a primary culprit in the disappointing results, but also noted that weakness is limited to a few newspapers, including the Los Angeles Times.

Tribune previously indicated that the Left Coast paper had hit something of a speed bump back in its first-quarter earnings call in April. At that time, the media concern pointed out that the Los Angeles Times' movie advertising was a problem area. It blamed the sparse spending on the earlier date of the Academy Awards, among a number of other factors. Still, Tribune sounded a hopeful note that the situation would improve in the second quarter with "strong action film releases."

However, this renewed spending evidently has not yet materialized. Despite the release of the box-office smash Shrek 2 in late May and the run-up to the debuts of major films such as Time Warner's (NYSE:TWX) Harry Potter and the Prisoner of Azkaban and Sony's (NYSE:SNE) Spider-Man 2, Tribune disclosed that movie and entertainment ads were down this May versus last year. And the planned restructuring may indicate that Tribune does not expect a dramatic upturn any time soon. That's bad news, since the Los Angeles Times is the company's largest newspaper.

On the bright side, Tribune continues to trade at a lower valuation than competitors Gannett (NYSE:GCI) and the The New York Times Co. (NYSE:NYT), and the firm still expects to meet analysts' second-quarter EPS estimates. But investors should follow the performance of the L.A. Times closely.

Fool contributor Brian Gorman is a freelance writer living in Chicago, Ill. He does not own shares of any companies mentioned here.