Tribune chairman may consider sale of some assets
|Baltimore Sun reporter
Sam Zell addresses employees of The Baltimore Sun. (Sun photo by Monica Lopossay / March 13, 2008)
A difficult economy and a steeper-than-expected decline in revenue could prompt the new leadership of Tribune Co. to re-evaluate its plan to keep all of the media giant's assets, Tribune chief executive Sam Zell said yesterday.Zell, the motorcycle-riding real estate mogul who took control of Tribune in an $8.2 billion sale in December, has previously said he intended to keep Tribune's core newspapers. Besides The Sun, those papers include the Los Angeles Times, Chicago Tribune, Newsday and smaller papers in Florida, Virginia and Connecticut.
Zell didn't rule out the possibility of asset sales. Asked if he would consider selling The Sun, Zell responded, "I don't know. The goal was to keep all of the assets together." But those goals were set with the expectation that revenue would be down 2 percent to 3 percent year over year, he said, not the 16 percent to 18 percent decline Tribune newspapers are experiencing.
"If that trend continues, we may have to re-evaluate a lot of our decisions," Zell told the crowded meeting.
Zell also said he was evaluating what to do with The Sun's real estate holdings, including its headquarters, Port Covington printing plant and leased space for its Web operations. He said he expects to make changes, though he said he had no timetable.
"That land on the bay is worth a lot," he said, referring to the printing plant, which sits on nearly 60 acres near the Middle Branch.
Zell, visiting The Sun for the first time yesterday, walked into a meeting with employees at Calvert Street headquarters as "Born to be Wild" blared from speakers. He painted a dire picture of a media giant faced with declining ad revenue, falling readership and stiff online competition.
"The news business is something worse than horrible," Zell said. "If that's the future, we don't have much of a future."
The answer, Zell said yesterday, repeating the message he's delivered at a series of visits to various Tribune properties, is to embrace change and to do it fast.
"This is a company that really needs a lot of change," Zell said. "We have to move into a more realistic era."
Zell said he is committed to winning and is wasting no time trying to change a top-down culture in which decisions - such as budgeting - have been made in corporate offices rather than in individual business units.
Zell appeared with Randy Michaels, whom Zell put in charge of Tribune's broadcast, Internet operations and a group of newspapers including The Sun.
The new executives devoted much of their talk to the notion that newspapers must embrace change and react nimbly to the evolving needs of readers and advertisers.
The first priority, he said, will be to increase revenue through new avenues such as a new free daily tabloid called b for young adults and accompanying Web site that The Baltimore Sun Media Group will launch next month.
Zell, appearing in his trademark open-collar shirt and sport jacket, repeatedly criticized past management of Tribune Co. as bureaucratic, unwieldy and overly centralized. He listed the top executives he has shed, including the chief executive officer, chief financial officer and head of human resources, and noted his new hires.
The most recent is Lee Abrams, the chief creative officer at XM Satellite Radio credited with inventing the "album rock" FM radio format, as Tribune's first chief innovation officer.
"This is not an easy task," Zell said. "The challenge is there, but the opportunity is there. We have extraordinary brand names. But we haven't used them to our advantage."
- Sam Zell, Tribune Company chairman and CEO, talks about the possibility of a sale of The Baltimore Sun Video
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