Monday, March 10, 2008

Zell invokes Viagra, F-word urging creativity, speed at Tribune


By Leon Lazaroff

Bloomberg News Published: 3/10/2008


Billionaire Sam Zell is traveling the U.S. using pep talks laced with profanity to exhort Tribune Co.'s 19,000 employees to be more creative or risk seeing their jobs disappear.

The real estate mogul turned chairman of Chicago-based Tribune has used the f-word and called himself the human equivalent of Viagra to address what ails one of the company's newspapers, the 126-year-old Los Angeles Times.

Zell, 66, has been telling staff members at Tribune's nine newspapers and 23 local television stations that he wants to cut bureaucracy and encourage quick decision-making and more collaboration among newspapers, TV and the Internet. Management experts say that while his choice of language risks offending people, he may succeed in forcing change.

``That free-wheeling, shake-things-up way of behaving isn't for everyone, but it is effective for reaching those people who are willing to embrace new ways of doing their jobs,'' said management consultant Karissa Thacker, an adjunct professor at the University of Delaware's business school in Newark who works with executives at Pfizer Inc. and Morgan Stanley.

Some of Zell's employees object to the language he uses and complain that he hasn't clearly stated what Tribune's new strategy should be.

`Doesn't Need to Swear'

``He doesn't need to swear to get our attention,'' said Julie Cart, a 25-year metro reporter at the Los Angeles Times. ``We see how newsrooms are shrinking. Zell makes a lot of noise but he hasn't articulated the new model other than saying we're doing it wrong.''

In a Jan. 31 meeting at the Orlando Sentinel, a female photographer asked whether Tribune's newspapers risked being dumbed-down. Zell replied and, as the audience was applauding, added ``f--- you.'' Zell later tried to reach the photographer to apologize, said Sentinel spokeswoman Ashley Allen.

On Feb. 7, he told Los Angeles Times employees that Internet pornography could be viewed at work provided it didn't hamper productivity.

``Let me know if you find any good sites,'' he said.

Zell, who has described himself as a ``grave dancer'' for his purchase of out-of-favor assets, became the object of discussion on media and journalism Web sites after videos of his talks were posted on the Internet. His speaking tour began in January and is expected to conclude this month.

`Over the Line'

``A number of people at the company, and especially women, have been deeply offended by some of the statements you've said at other places,'' Chicago Tribune public editor Timothy McNulty told his new boss at a Feb. 19 gathering at the Chicago newspaper.

Zell said he meant to create urgency and intended no offense, adding that he had promoted many women to senior management positions.

``I went over the line on purpose to see if I could bring you to the edge,'' he told the Tribune audience. ``How soon is this organization, and this company, going to wake up to the fact that we're on the edge?''

Through a spokeswoman, Zell declined a Bloomberg request for an interview.

Tribune and other newspaper publishers face declines in advertising sales and a preference among younger readers to get news from Web sites. Tribune is investing in its Internet operations and last month created an online venture with Gannett Co., New York Times Co. and Hearst Corp. to sell online advertising.

Job Cuts

Meanwhile, Zell's company is cutting jobs to offset ad revenue decreases and trim more than $12 billion in debt. The number of positions eliminated will total as many as 150 at the Los Angeles Times, about 100 from the group that includes the Chicago Tribune and 120 at Newsday on Long Island, New York.

``Zell is trying to overthrow an industry model that needs a major correction,'' said Jeremy Garlington, an Atlanta-based executive leadership consultant, who works with companies in financial services, private equity and technology. ``The result may be to change the status quo.''

Tribune's debt increased in December after Zell led an $8.2 billion transaction taking the company private. Tribune bonds due in 2015 are trading at 40 cents on the dollar.

Bruce Barry, a professor of management and sociology at Vanderbilt University in Nashville, Tennessee, says encouraging change works best when employees believe their suggestions won't be met with ridicule or retribution. Zell, he said, needs to tailor his message so that it jolts without offending.

``If a lot of people find his style offensive, then it probably is offensive and that doesn't do any good,'' Barry said. ``If, however, what he's doing is really loosening up the expressive aspects of his corporate culture, and not just being flamboyant, that's a very good thing. It all depends on how he executes his vision.''

To contact the reporter on this story: Leon Lazaroff in New York at llazaroff@bloomberg.net.

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