Friday, January 18, 2008

New Guard Arrives at Tribune, a Developer Who Speaks His Mind

Published: December 21, 2007
New York Times

On Thursday, after completing an $8.2 billion deal that turned the Tribune Company into a privately held operation, Samuel Zell made himself chief executive, announced a new set of directors and managers, and declared that the troubled company would look to raise revenue more than cut spending.
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Zbigniew Bzdak/Chicago Tribune, via Associated Press

Samuel Zell visited the Chicago Tribune office on Thursday. “I’m sick and tired of listening to everybody talk about and commiserate about the end of newspapers,” he said. “They ain’t ended.”

At a news conference in Chicago, Mr. Zell, who has made billions in real estate, cheerfully upheld his reputation as a blunt, funny and thoroughly contrarian businessman.

He disparaged the conventional wisdom that the newspaper industry — and the Tribune Company in particular — was suffering through a long, unavoidable contraction, and repeatedly stated that Tribune could increase its revenues.

“I’m sick and tired of listening to everybody talk about and commiserate about the end of newspapers,” he said. “They ain’t ended. And they’re not going to be.”

He said of Tribune, “I think it’s a very low-risk investment, but this wouldn’t be the first time that my opinion diverged from everybody else’s.”

The transaction makes Tribune a nonprofit organization owned entirely by an employee stock ownership plan, but Mr. Zell, who invested $315 million in the deal, has the right to buy up to 40 percent of it in the future. Tribune owns The Chicago Tribune, The Los Angeles Times, Newsday, The Baltimore Sun and 23 television stations, among other properties.

The company added five members to its board on Thursday, replacing four departing directors. Three others remain, including Mr. Zell, the new chairman. Most of the newcomers have long experience in communications, but not in Tribune’s core industries of television and newspapers.
“This is not a board where we have to have people on it who are going to impress Wall Street,” Mr. Zell said. “They tend to be nonconventional thinkers.”

One new director is Brian L. Greenspun, who heads his family’s investment company, the Greenspun Corporation, which made an unspecified investment in Tribune. The corporation owns several publications, including The Las Vegas Sun, where Mr. Greenspun is the editor.
The others are Jeffrey S. Berg, who heads International Creative Management, the talent agency; William C. Pate, an executive of Mr. Zell’s investment firm; Maggie Wilderotter, chairman and chief executive of Citizens Communications, a telephone and Internet company; and Frank E. Wood, who has led a chain of radio stations, a venture capital firm and an Internet technology company.

Mr. Zell also named two executive vice presidents: one of his former lieutenants in real estate, Gerald A. Spector, and Randy Michaels, a veteran television and radio executive.
Mr. Zell took several swipes at the departing management of the Tribune Company, saying that the old guard ran a place where “decisions take a long time.”

“I believe this company has spent a significant amount of time in the last five years on cutting costs, and maybe not enough time on growing revenues,” he said.

“What this company needs is an owner,” he said later. “It needs someone who accepts the responsibility for what this company does.”

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