Monday, March 31, 2008
Saturday, March 29, 2008; Page D01
Abrams, a radio legend, has told employees of the struggling Tribune that news and information are the "new rock-and-roll" and ripe for reinvention. Tribune was sort of on board with this idea already; it had posted a lobby display about "transformative change," championed by John Kotter, a Harvard professor and leadership guru.
But on a recent tour of the building, Abrams saw the display and said, "Huh?" So he had a large black-and-white head shot of a young Bob Dylan hung in a display case near the grand lobby entrance of the gothic Tribune Tower. Posted alongside are the lyrics to Dylan's 1964 classic "The Times They Are A-Changin'."
Burdened with $13 billion in debt and facing sharp revenue losses, Tribune staffers walking past the lyrics may be especially struck by these lines:
And admit that the waters around you have grown
And accept it that soon you'll be drenched to the bone.
If your time to you is worth savin'
Then you better start swimmin' or you'll sink like a stone
XM threw a party for Abrams yesterday at the company's headquarters in the District. He got the biggest laugh with his sign-off direction to the staff, who are awaiting final government approval of their merger with rival Sirius Satellite Radio: "I'll leave you with four words: Don't [mess] it up!"
Friday, March 28, 2008
First on TVNewser: Following yesterday's announcement of a reorganization of the operations and finance areas of ABC News, TVNewser has learned as many as 21 jobs have been eliminated. However, insiders tell us a number of new jobs have already been posted, and that those who were cut are being encouraged to apply for the added positions. In the end, the insider figures around 11 jobs will be lost.
In his note yesterday, ABC News president David Westin wrote, "...we will reduce the level of operations management and the number of operations positions overall."
Click continued to see the list of new jobs posted today at the network...ABC News Operations has an opening for a Vice President, News Technology. Responsibilities include working with News management and other ABC departments including News Gathering, Broadcast Operations and Engineering, Finance and Human Resources to successfully direct technical resources across ABC News worldwide. The VP will lead the effort to creatively identify and acquire the most effective new technologies and create an implementation strategy across ABC News platforms. Please send resumes to David Westin, President, ABC News.
ABC News Operations has an opening for a Manager, News Technology. Responsibilities include working with News Gathering and Broadcast Operations and Engineering to manage ABC News technical resources. Take the creative lead in identifying new technology solutions for ABC News. Implement and manage new technologies across platforms. Please send resumes to Sandy Sidey, Director, Executive Projects.
ABC News Operations has an opening for an Executive Director of News Program Operations. The Executive Director directs technical/operational resources across ABC News programs — World News, GMA, Nightline, This Week, Magazines, Long Form, World News Now, America This Morning and Special Events. The Executive Director will work with the Executive Producers to allocate resources across ABC News operations to the benefit of the programs. The Executive Director will participate in the strategic development of new technologies and the creation of the appropriate new workflow. The Executive Director will also work closely with EPs and Finance to manage show budgets and enforce company policies and procedures. Please send resumes to Dave Davis, Executive Vice President.
ABC News Operations has several openings (4) for an Operations Manager, Hard News. The Operations Manager will be responsible for the day-to-day production management across ABC News Hard News platforms including scheduling crews, commercial integration, control room coverage. Must have the ability to work on remotes. 3-5 years of studio and field television production experience is required coupled with a strong technical and financial background. Please send resumes to Renu Thomas, Executive Director, Operations.
ABC News Operations has an opening for an Executive Director for News Gathering & Operations. The Executive Director will oversee logistics and operations for News Gathering, working in conjunction with the Executive Editorial Director, the News Assignment Desk and the ABC News bureaus. The Executive Director will oversee News Operations, the Logistics Desk, the News Acquisition Center (ABSAT and the Satellite Desk) and Transport to provide technical and production support for individual news assignments, including extensive remote origination for the various programs and platforms. Please send resumes to Kate O'Brian, Senior Vice President, News Gathering.
ABC News Operations has an opening for a Director, Business Continuity & Crisis Management. The Director is the first response to any interruption in the production, technical or physical operation of the division. The Director will oversee the effort to return adequate service as soon as possible, plan for the resumption of full service, direct the investigation into the cause of the failure and take whatever long term steps are necessary to prevent a recurrence of the problem. The Director will also plan and manage the regular, necessary and ordinary interruptions in production, technical or physical services (regular maintenance, upgrade in equipment or systems, etc.). The Director reports to the Vice President, News Technology. Please send resumes to Bob Murphy, VP, News Administration.
ABC News Operations has several openings (2) for a Manager, Business Continuity & Crisis Management. The Manager is responsible for any interruption in the production, technical or physical operation of the division. Responsibilities also include managing the assignment, distribution and maintenance of the communication tools necessary to gather, report and produce the news (cell phones, blackberries, computers, etc.) Serves as ACS point of contact. Please send resumes to Bob Murphy, VP, News Administration
ABC News Operations has an opening for a Director, Logistics Desk & Crew Safety. Responsibilities include day-to-day oversight of the Logistics Desk, which will coordinate deployment and maintenance of ABC News operational resources. Must have strategic understanding of the operational needs of a competitive news organization to ensure that the Logistics Desk is coordinating operations and field productions accordingly. The Director is also responsible for Crew Safety initiatives to ensure ABC News staff is trained accordingly. This position reports to the Executive Director, News Gathering & Operations. Please send resumes to David Reiter, Executive Editorial Director.
ABC News Operations has several openings (2) for a Manager, Logistics Desk & Crew Safety. The Manager will assume responsibility for coordinating logistics, operations and field production across ABC News platforms. Additional responsibilities include coordinating and managing remotes, field production, operations and new technology. The Manager will work closely with the News Assignment Desk on newsgathering activities. Please send resumes to David Reiter, Executive Editorial Director.
ABC News Operations has several openings (2) for a Coordinator, Logistics Desk. The Coordinator will be responsible for logistics and operations across ABC News platforms. Additional responsibilities include organizing crew coverage and travel. Please send resumes to David Reiter, Executive Editorial Director.
BO&E currently has four (4) NABET Staff Control Center Engineer openings in New York City!
Television’s Network Control Center provides 15 full time digital satellite feeds to over 200 network affiliates across the U.S. As a Control Center Engineer, you will work in Network Control Center (NCC) and Master Control.
· Router switching programming source to designated network transponders.
· Monitoring and controlling the digital uplink of the network.
· Quality assurance of all network downlinks.
· Identify network interruptions and implement recovery to minimize broadcast disruptions
· Monitoring the health of affiliate downlinks.
· Monitoring live-feedback from affiliates for problems and take corrective actions.
· Verifying distribution of ancillary data within broadcast signal.
· Identify and troubleshoot system problems / failures.
· Quality checkout of all transmission paths.
· Diagnose and troubleshoot technical problems.
The requisition ID for the Control Center Engineer position is 149639. This corresponds to Position # 70112836.Also, Local 16 has been advised that the ABC-TV Network has the following full-time staff job openings in New York, starting on or about April 12, 2008:
Five (5) - Technical Directors (Group 8) - reporting to Steve Rebidas
One (1) - Technical Director (Group 8) - reporting to Ellen Zalk
Four (4) - Control Center Engineers (Group 7) - reporting to John Cauda
With billions of dollars in debt in the deal, Sam Zell needs to find buyers for parts of the Tribune company -- and nothing is sacred.
(Fortune) -- While speculation continues to swirl about the possible sale of Newsday to the likes of Rupert Murdoch or Mort Zuckerman, the Long Island newspaper's owner, real estate magnate Sam Zell, won't confirm whether the estimated $600 million asset is actually for sale. Some analysts, in fact, believe it doesn't make sense for Zell to sell.
Last April, Zell acquired Newsday when he choreographed a complex $8.2 billion deal to purchase the Tribune Company. Zell took the company - with its 11 newspapers including the Los Angeles Times, Chicago Tribune, and 23 television stations - private.
Zell put up $315 million of his own money and took on a sizable debt to finance the transaction. The deal's structure sparked considerable conjecture at the time that the magnate would sell some of Tribune's assets to whittle away at the debt. So far, the company has said that it is selling the Chicago Cubs and the team's baseball park, Wrigley Field.
"It's company policy not to comment on speculation about asset sales," said a Tribune Company spokesperson.
Even so, the Newsday sale rumors persist. And in the last week, the New York Times, New York Observer and others have quoted unnamed sources that claim to have knowledge of ongoing sale negotiations.
"I think it's illogical that Newsday would be for sale," says John Morton, newspaper analyst and president of Morton Research Inc. "Newsday is one of Tribune Company's higher cash-generating properties. I really doubt that anything is going to happen with Newsday."
Indeed, Newsday, with no direct competition for relatively affluent suburban New York readers, had a net operating income of $498 million in 2007.
Aside from Newsday, there are other assets within the Tribune Company that might make for more rational sales, according to observers. One of them is the company's 31% stake in the Food Network, a stake that could be worth as much as $1 billion.
The Food Network's cable fare can be seen in more than 96 million U.S. households. Last year, according to the network's own data, six million unique Web users visited the network's site each month.
E.W. Scripps, the Food Network's majority owner, would be amenable to a deal that would give it full ownership, believes Jake Newman, a debt analyst with CreditSights, an independent capital structures research firm in New York.
"That would reduce leverage for Tribune the most among all the assets Tribune has," says Newman.
John Miller, senior vice president of Ariel Capital Management in Chicago, agrees.
"I wouldn't be surprised if Sam Zell sold his part of the Food Network."
Hinting that informal talks may already be underway between Scripps and Tribune, Miller says that "Scripps wants to pay one price for the piece, and Tribune is a seller at a higher price."
Zell's moves are being closely watched because he needs to sell something soon. According to his agreements with lenders for his Tribune purchase, Zell has to repay $650 million in December 2008 and $750 million in May 2009.
"The company has no other visible means of repaying that," says CreditSights's Newman. Therefore, Newman posits, "nothing can be sacred, not Newsday, not even the L.A. Times.The only asset that may be untouchable is the Chicago Tribune, Zell's hometown paper."
Referring to Zell's own claim to be Viagra the 126-year-old LAT needs, Boyarsky writes:
"I don't know about Sam, but the Times doesn't need Viagra. It needs journalists who can go to work each day without worrying about looking for a new job or whether they'll wind up with any money in the Employee Stock Ownership Program that Zell used to buy Tribune Co.Fat chance. The Zell Deal uses their money and gambles with their futures, but most employees didn't have a choice and don't have a voice in the ESOP. With $10 billion in debt hanging over Tribune employee heads, is it any wonder some Newsday staffers hope Murdoch takes over their paper?
Instead of silly pep talks, Sam ought to fire off some e-mails providing transparency on the ESOP deal."
Wednesday, March 26, 2008
Sam Zell wants his "partners" in the Tribune empire to send their ideas to a new online Idea Bank -- and to make withdrawals too. The latest from Uncle Sam:
From: Talk to SamGoing forward, I’d like you to direct your ideas to our IdeaBank, rather than sending them to talktoSam@tribune.com. This will enable others across the county to see them. I will still read and respond to all of the ideas that are submitted, and I still encourage you to e-mail me directly with comments and questions.
Sent: Wed Mar 26 09:16:41 2008
I’m thrilled with the hundreds of ideas employees have sent me. It’s been great to see your creativity, and in many cases, the thoughtful approach you’ve taken to analyzing your suggestions.
As I’ve said repeatedly, the best ideas for this company will come from you, and we’ve seen a number of these innovations come to life in the past 60 days, including: a new morning show in Hartford, a free newspaper targeting young adults in Baltimore, a new national news section in Newport News, and spadia ads in Orlando and South Florida. We need to test a lot of ideas; we recognize that some won’t work. But, we’ll never find the ones that do work, unless we try them.
To open up this idea exchange across the company, we are launching an online IdeaBank, accessible via TribLink.
The IdeaBank has a crowd-sourcing element, so you can tag ideas you think are particularly good. You can also sort ideas by categories, and we’ll feature the top Revenue-Generating ideas, as determined by their popularity, on the front page of the site. We’re placing special emphasis on revenue-generating ideas because, as you know, that is our current focus. (One reminder: Ideas should cost significantly less than the revenue they produce.)
Most importantly, I want to convey that this is not some lighthearted initiative. I expect you to participate. Make deposits. Make withdrawals. Review the ideas to determine how you might adapt them to your business unit. And, managers, by reviewing and analyzing these ideas, you dramatically increase the probability of their viability.
So, be prolific. The future of our company is literally in your hands.Sam
Tuesday, March 25, 2008
Credit Agencies Warn Declining Newspaper Revenue Threaten Debt Agreements, Or In Layman Terms, Who Was Expecting An 18% Downturn?
Sam Zell simply explained why Tribune may now consider selling newspaper properties, “We started with the assumption that print would be down two or three per cent this year, not 18%.”
Everyone knows that once Sam Zell got his hands on Tribune he wasn’t about to screw up the investment by missing debt payments or falling foul of debt covenants. But whereas before he had a “no sale” sign on the newspaper properties, apparently he has now hung out the “For Sale” sign on Newsday.
Rupert Murdoch would love to get his hands on Newsday (competition authorities allowing) for the synergies (read: savings) it could bring to back office functions at his New York Post that still loses millions of dollars annually. That’s probably why Mort Zuckerman, publisher of the New York Daily News, has also expressed interest, and thus with that kind of competition Newsday may be the one newspaper (the Los Angeles Times possibly a second) where the going price could be higher than financial market value.
When Murdoch wants something badly enough he’s not afraid to pay over the odds (the $5 billion plus for Dow Jones proved that yet again) and Zell and Murdoch have been discussing Tribune newspapers in California and Florida possibly printing the Wall Street Journal so one could almost see a win-win deal in the making.Zell says Tribune Co. will continue 'strategic review' of assets
By Michael Malone -- Broadcasting & Cable, 3/24/2008
Tribune Co. is having a tough recovery. It reported a loss from continuing operations of $78 million for the fourth quarter of 2007 compared with income of $233 million in the same quarter of 2006, and full-year 2007 income from continuing operations at $55 million compared with $661 million in 2006.
Tribune's fourth-quarter 2007 operating revenue decreased 12%, or $180 million, to $1.27 billion. Operating cash flow decreased 44% to $214 million, while operating profit decreased 92% to $27 million. The quarter had one fewer week than 2006's fourth quarter.
New chairman and CEO Sam Zell, who assumed control of Tribune Co. near the end of 2007, said the company will continue a strategic review of assets.
Zell said he sees ample growth opportunity amid a rough business climate.
"Despite the continued difficult operating environment and weakness in print revenue, we see significant opportunity within Tribune Co.," he said. "In our first 75 days, we've made a series of key leadership changes, launched a number of programs and projects to drive new revenue and initiated a fundamental shift in culture. In addition, we have begun a strategic review of certain Tribune assets to determine whether capital can be more effectively redeployed into our core operations or toward reducing our outstanding leverage."
Just Wednesday, Tribune announced that it was moving WSFL Miami into the South Florida Sun-Sentinel newspaper headquarters in Fort Lauderdale, Fla.
Revenue for the broadcasting and entertainment division (generally, Tribune's syndication arm), its baseball Chicago Cubs and radio station for the quarter were down 11% to $316 million compared to a year earlier.
Television station revenue decreased 9% for the fourth quarter to $297 million; television operating cash flow was down 24% to $90 million and television operating profit slid 26% to $79 million.
For the full year 2007, which also had one fewer week than 2006, broadcasting and entertainment operating revenue decreased 2% to $1.4 billion, operating cash flow dropped 8% to $408 million and operating profit slid 9% to $357 million.
Television's operating revenue for the full 2007 were off 4% to $1.14 billion and operating profit decreased 10% to $322 million.
Privately held Tribune Co named Chandler Bigelow as chief financial officer, effective immediately.
Bigelow, who has been its vice president/treasurer since 2003, succeeds Don Grenesko, who is retiring, the company said.
The debt-laden newspaper publisher and broadcaster went private in a buyout last year led by real estate tycoon Sam Zell.
Grenesko, who served as the company's CFO for the past 17 years, and Bigelow were instrumental in closing its going-private transaction, the company said.
(Reporting by Ratul Ray Chaudhuri in Bangalore; Editing by Deepak Kannan)
Monday, March 24, 2008
The Chicago Sun-Times ran a contest called “Zell No!”, a video contest to protest the possible selling of naming right for Wrigley Field by new owner of Tribune Co., Sam Zell. The winner of the UGC video contest would slide into home with $1,000. Well, pranksters over at the Chicago Tribune entered the contest under the name of one of their interns, and their video won. The Chicago Tribune’s site proudly declares, “Zell yeah! The winner of the Sun-Times’ Wrigley Field name music video contest is… the Chicago Tribune.” And the Sun-Times presents a much smaller announcement that “The Sun-Times has been punked.” The prize is being donated to the Chicago Tribune Charities.http://www.youtube.com/watch?v=3ZAcvoeXmDE&eurl=http://www.lostremote.com/
The Tribune intern and a reporter proudly show off the front page of the Sun-Times in this video:
A reasonable and fair compensation system for executives and workers is fundamental to the creation of long-term corporate value. However, the past two decades have seen an unprecedented growth in compensation for top executives and a dramatic increase in the ratio between the compensation of executives and their employees.
Boards of directors are responsible for setting CEO pay. Too often, directors award compensation packages that go well beyond what is required to attract and retain executives and reward even poorly performing CEOs. These executive pay excesses come at the expense of shareholders as well as the company and its employees.
Excessive CEO pay takes dollars out of the pockets of shareholders—including the retirement savings of America’s working families. Moreover, a poorly designed executive compensation package can reward decisions that are not in the long-term interests of a company, its shareholders and employees.
Some CEOs may have far greater control over their pay than anybody previously suspected. The past year has witnessed a stock options backdating scandal that has resulted in U.S. Securities and Exchange Commission (SEC) investigations at as many as 160 companies and the departure of many CEOs, such as William McGuire of United Health Group.
Also in 2006, departing CEOs Henry McKinnell of Pfizer and Robert Nardelli of Home Depot both received exit packages of more than $200 million. Both companies underperformed during their tenures, although their excessive pay was an issue in itself.
In some cases, CEOs were entitled to receive generous exit packages, despite their involvement in the stock options backdating scandal. Former CEO Bruce Karatz departed because of options backdating at KB Home, but because he retired and was not fired for cause, the terms of his employment agreement entitled him to an exit package worth as much as $175 million.
Karatz’s compensation is frozen until an agreement is reached between him and KB Home on how much he will actually receive. Investors have urged the company not to pay Karatz. However, because of the legally binding employment agreement, KB Home has a weakened case if it decides not to pay him
Excessive CEO pay is fundamentally a corporate governance problem. The board of directors is supposed to protect shareholder interests and ensure that CEO pay reflects performance. However, at approximately two-thirds of companies, the CEO also chairs the board. When a single person serves as both chair and CEO, it is impossible to objectively monitor and evaluate his or her own performance.
CEOs also dominate the election of directors. The vast majority of directors are hand picked by incumbent management. Because of the proxy rules, it is prohibitively expensive for long-term shareholders to run their own director candidates. Moreover, even if a majority of shareholders withhold support from directors, they still are elected to the board at many companies.
Ultimately, shareholders have to be able to trust their boards of directors to set responsible CEO pay packages. For this reason, CEO pay will be reformed only when corporate boards become more accountable. Until then, CEOs will continue to influence the size and form of their own compensation, and CEO pay will continue to rise.
The good news is that investors may finally get the tools needed to make boards of directors more accountable. Last year, a historic court decision at American International Group ruled that shareholders have the right to reform the way that directors are nominated for election.
The business community has been pushing the SEC to undo this decision through regulatory action. Hopefully the SEC will resist this pressure and ensure the protection and expansion of long-term shareholders’ rights to participate in corporate board elections.1]The Corporate Library's Annual CEO Pay Survey 2007, The Corporate Library, December 2007.
 Remarks by Linda Chatman Thomsen, director, SEC Division of Enforcement, at the March 19, 2007 conference of the Council of Institutional Investors.
 Pfizer 8-K, Dec. 21, 2006; and Home Depot 8-K, Jan. 4, 2007.
 “Exiting Under a Cloud, with $175 Million,” Los Angeles Times, Nov. 20, 2006.
 “U.S. Prosecutors Examining Options Case at KB Home,” The New York Times, Feb. 24, 2007.
KSWB in San Diego to Depart CW Clan
By Michele Greppi
Tribune Co.’s KSWB-TV in San Diego will shift its network affiliation to Fox at the end of August, dramatizing the willingness of new Tribune owner Sam Zell to depart from the approach of the company’s former management.
KSWB is affiliated with The CW and was a founding affiliate of its now-defunct predecessor, The WB.
The station will start the 2008-09 season carrying Fox’s popular NFL coverage (San Diego is the home of the Chargers), as well as a prime-time lineup fueled by such hits as “House,” “24” and “American Idol.”
The talks were spearheaded by Randy Michaels, who has headed Tribune Co.’s Internet and broadcast operations since December, according to Tribune Broadcasting President Ed Wilson, who was president of the Fox Television Network before joining Tribune in February.
Mr. Wilson said Tribune will add three to four hours of news per day to the lineup of KSWB, which currently simulcasts the local morning program produced by Tribune’s KTLA-TV in Los Angeles and broadcasts a late local newscast produced by NBC-owned KNSD-TV in San Diego.
“This is a very good move for us,” Mr. Wilson told Television Week.
As for what will happen to The CW affiliation in the market, John Maatta, chief operating officer of The CW issued a statement saying: “Tribune is a valued partner of The CW’s and we’re confident that our interests in San Diego will be fully protected.”
Mr. Wilson noted that Tribune still will have 12 CW affiliates, whose general managers recently were briefed on prime-time plans by The CW President Dawn Ostroff.
“We continue to be very loyal. We’re going to do what’s best for The CW,” Mr. Wilson said. “We are talking on a daily basis.”
Tribune stations already represented the second-largest group of Fox affiliates. The addition of San Diego will mean seven Tribune-owned stations within the Fox fold.
The station losing Fox affiliation is XETV-TV, which is based just across the Mexican border in Tijuana and was purchased by Grupo Televisa in 1996.
Jon Hookstratten, Fox network distribution exec VP, said the network’s gains in this affiliation switch start with the fact that instead of working with a station situated in another country, the network will be collaborating with a station whose transmitter is located in the middle of the San Diego market, the 27th largest TV market in the country.
“It’s more of a stable situation,” Mr. Hookstratten said. “We are looking forward to it as a great opportunity.”
McKinnon Broadcasting had been in talks with Fox Broadcasting about affiliation when Tribune reached out to Fox about making the switch.
According to sources familiar with the history of the negotiations, the subject first came up when the previous Tribune regime was grappling with a great deal of challenge and change.
Last week brought the news that Tribune Co. had lost $79 million for the fourth quarter of 2007, its last as a publicly traded company, and ended the calendar year barely profitable.
There also was the announcement that Mr. Zell’s new management team was going to combine operations of its Miami TV station, CW affiliated WSFL-TV, and the Tribune-owned South Florida Sun-Sentinel newspaper.
Friday, March 21, 2008
Tribune owner hopes to revive embattled Times
And when he met with employees of what has been the Tribune Co.'s problem child, the Los Angeles Times, last month, he was quick to define the newspaper's problems with a kind of cartoonish naughtiness.
"The challenge is, how do we get somebody 126 years old to get it up?" Zell said, referring to the newspaper. "Well ... I'm your Viagra."
But for all the color that has trickled out of these gatherings, and all the fear and loathing that has rippled through the more refined parts of Tribune, there are serious questions as to whether Zell can actually pull off a transformation of the media empire.
He is trying to lead a revolution inside the rock-ribbed, old media business culture of the 160-year-old company whose marquee properties are losing audience and market share.
Zell has brought in new executives who talk of "breaking the rules" and bringing "rock 'n' roll" and "street moxie" into play to reinvigorate Tribune's eight daily newspapers and 23 TV stations. But the solutions to the fundamental problems that spurred Tribune's sale are not so easily prescribed. Changing a corporate culture in any business is a formidable assignment, especially for a company that has been stuck in an L.A.-vs.-Chicago civil war ever since Tribune acquired the L.A. Times parent in 2000 (for $8.3 billion, a little more than the $8.2 billion buyout that Zell led last year).
The influx of new blood and nontraditional creative thinking that Zell and his lieutenants have promised also will take time to implement.
But that is complicated with a much more immediate problem -- one that even raises questions about the long-term stability of the complex deal.
Advertising revenue at Tribune's newspapers has dropped sharply, down more than 15% so far this year compared with 2007. That's much more than Zell's number-crunchers predicted when the deal was being completed in December. It's the perfect storm of a general slump in the newspaper business and the economic slowdown hitting key print advertising sectors like real estate and automotive.
Although the Zell-led buyout took the company private again, and freed the company from the scrutiny of quarterly results and share price, the complicated, $34-per-share buyout under an Employee Stock Ownership program left Tribune with $13 billion in debt.
So where once Zell roundly criticized Tribune's previous management for being too focused on cost-cutting to improve its financials, he said last month that the weaker-than-expected revenue left the company no choice but to implement layoffs of 400 to 500 staffers in its publishing and corporate units.
In the meantime, publisher David Hiller tapped Russ Stanton as the Times' next editor, replacing James O'Shea, who resigned rather than presiding over the cuts in the newsroom. Stanton, a 10-year veteran of the paper, was a relatively unconventional choice, because he has cut his teeth most recently in trying to boost the company's online presence, among other endeavors. He became the paper's fourth editor in three years.
Outside observers say that Tribune is under pressure to maintain annual earnings in the neighborhood of $1 billion to service that debt and not run afoul of the covenants with the banks that helped finance the buyout, including Citigroup, JP Morgan Chase and Merrill Lynch. (Zell invested $315 million in Tribune in exchange for a note allowing him to acquire up to 40% of the company within 15 years.)
Why enter into such a deal, particularly when it was clear that the newspaper business is faltering? On the upside, the company is not obligated to pay taxes because of its employee-owned structure. All of its available cash can be used to pay down debt, and the more Tribune whittles down its debt, the more equity employees have in the company. On the downside, if Tribune's businesses deteriorate, the company runs the risk of defaulting on its debt payments and the possibility of bankruptcy.
Even with the complex deal, Zell won Tribune despite a high-profile bid from Los Angeles billionaires Eli Broad and Ron Burkle. Tribune's board was said to lean toward Zell's bid because he was a fellow Chicagoan and a hard-driving businessman who would make the most of Tribune's newspaper and TV assets.
That Zell even completed the deal was, to be blunt, against all odds. Given the turmoil in the credit markets, there was much speculation that he would have to dramatically restructure or table the Tribune deal. But Zell was just coming off the February 2007 sale of his office building portfolio to private equity behemoth Blackstone Group -- a $39 billion transaction that yielded tens of millions of dollars in fees for the financial community.
"The banks couldn't turn around and say no to him" on Tribune, a former company exec observed. "Sam Zell was probably the only guy in the country who could get that deal done."
Zell has been candid in telling employees that 2008 is shaping up to be a "shitty year" financially for the company -- a point he reiterated in a recent letter to Tribune personnel. Addressed "Dear Partner," Zell said employees must take the initiative and that success will rely upon "heroes in the field who lead a grass-roots sea change."
For the first time this month, he said that asset sales may have to be considered. But that is a tricky option: The ESOP structure is hinged on the asset base that the Tribune had in place at the time of the sale.
The company, then, would face a huge tax bill if it tried to sell off one of its big pieces, like the Los Angeles Times, though some Tribune insiders believe there are creative ways to structure a transaction or partial sale. Those reportedly interested in buying Newsday include Rupert Murdoch, Mort Zuckerman and James L. Dolan.
Tribune executives are emphatic that there is "no risk" of the company defaulting on its debt payments this year, according to Randy Michaels, Tribune's newly appointed CEO of broadcasting and interactive.
Michaels was recruited by Zell in December to be his top lieutenant overseeing Tribune's TV stations, Internet operations and its smaller newspapers. Michaels previously ran Jacor Communications, the Zell-owned radio station that went on a buying spree in the mid-1990s and was later sold to Clear Channel Communications.
The immediate focus at Tribune seems to be on staunching the bleeding at newspapers and broadening and improving the company's online offerings.
Michaels says that his lack of a background in the publishing world will help him brainstorm new ways to approach the print business. The same goes for Lee Abrams, the former XM Satellite Radio exec who has been recruited by Michaels to serve as Tribune's chief innovation officer. And Ed Wilson, a veteran in the syndication business, was brought in last month as the new president of Tribune Broadcasting.
What they face, Michaels observes, is a Balkanized bureaucracy.
Says Michaels: "I've been surprised by ... how silo-ed we are and how little communication there is. The best practices in one part of the company aren't shared anywhere else. This has been a vertically silo-ed company. While certainly each of our brands needs to be individual and reflect our communities, at the backend, we need to do a much better job of using the resources we have and using the clout we have. Sam likes to say, 'We haven't been a media company; we've been a collection of media outlets.' "
Like many media congloms, Tribune faces the dilemma of needing to invest in Internet businesses to make it more competitive, even as the vast majority of revenues still come from the old-school of print and 30-second spots on its TV stations.
"You have to understand that traditional media is (often) trading dollars for dimes when its advertising business moves online," Michaels says. "I think we have an opportunity to trade a dollar for 50¢ (online) and lose 60¢ in costs, so we come out ahead."
Nevertheless, such a transition is proving wrenching, not just as to the prospect of layoffs but in the entire notion of exactly what content the Chicago Tribune or the Los Angeles Times provides. The Times' website's entertainment page now tilts less toward industry-centric news and much more toward Us-inspired celebrity photos and the latest on Lindsay Lohan.
Last week, Tribune announced a plan to combine the operations of its South Florida-based newspaper and TV station under one roof, a melding of formerly distinct operations that is likely to be replicated in other Tribune markets as the new regime overhauls its local management structure. The plan calls for Tribune's Miami station, CW affiliate WSFL-TV, to move into the Fort Lauderdale offices of the South Florida Sun-Sentinel. The paper's publisher, Howard Greenberg, also will assume general manager duties for the TV station. In the words of Greenberg, the move is intended to make the operations "work together to develop unique content and programming" and to be a one-stop shop for local advertisers.
"The big message right now is changing the culture, and changing our focus," Michaels says. "You have journalists who write mostly for each other, not readers. I laugh when I sit in on ad department meetings and hear them talk about what sized ads we ought to sell instead of what the customer wants to buy. We need to get reader-focused and customer-focused."
That's just the kind of talk that sets off alarm bells among journos who believe there is a public service aspect to the newspaper business, as Zell has been informed during his tour of Tribune's newspapers.
Zell's response has been clear: He has said that he brings no editorial agenda, nor does he have any sentimentality about newspapers' role as civic institutions.Zell also said the value of stock held by an employee trust was
"I'm a businessman," Zell told Times employees in February. "All that matters in the end is the bottom line."
___________So much for Sam Zell's promise he wouldn't sell off Tribune Co. piecemeal. He's considering doing exactly that with the shadow auction of Newsday, now in play with a guesstimated price tag of $350-$400 million.
That would almost make up for the $500 shortfall in profits last year at Tribune, which is doing even worse than Zell thought (and he didn't think much of the company.)
Rupert Murdoch and Mort Zuckerman -- owner of the New York Post and Daily News, respectively -- have offered to form joint partnerships that would save on back-end costs (read: layoffs for the press workers and other unionized employees), while Cablevision has offered to buy the paper outright, promising bold management on par with its ownership of the New York Knicks.
The real losers, of course, would be the paper's employees, who would no doubt be let go in droves to pay for the latest round of debt needed to finance the deal...
Three of New York’s biggest moguls are in discussions to buy Newsday, the Long Island newspaper, from the Tribune Company, people involved in the sale process said Thursday.
The three interested bidders are Rupert Murdoch, chairman of the News Corporation, owner of The New York Post; Mortimer B. Zuckerman, the real estate developer and publisher who owns The Daily News, The Post’s tabloid rival; and James L. Dolan, whose family controls Cablevision, the cable television operator, these people said.
The sale process, which is described as a soft auction in which investment bankers are approaching a selected number of buyers, involves several possible kinds of deals.
Mr. Murdoch, for example, is considering a deal that would be structured as a joint venture between The Post and Newsday, that would combine the back-office operations of the two papers. None of the people involved in the auction would be identified because of the confidential nature of the talks.
On the seller’s side, Tribune made public its 2007 results Thursday, showing why it is eager to unload assets. The company, which has been controlled by Samuel Zell, the Chicago real estate magnate, since the end of last year, reported a loss of $78.8 million for the fourth quarter, compared with a $239 million profit in the year-earlier quarter. For the full year, it reported a profit of $86.9 million, down from $594 million.
The company’s newspapers, which include The Chicago Tribune, The Los Angeles Times and The Orlando Sentinel, are losing ad revenue even faster than the industry as a whole, in part because of their heavy exposure to the struggling California and Florida real estate markets.
Mr. Zell said last year that he did not intend to part with Tribune Company’s newspapers. But in a series of recent visits to those newspapers, he has made it clear that Tribune’s financial picture was worse than he had anticipated, and could force a change of plans.
Newsday is probably one of Tribune’s more lucrative papers, according to John Morton, a newspaper analyst, because it serves an affluent region near New York City. People involved in the Newsday sale declined to name a price, but Mr. Morton estimated that it could be worth $350 million to $400 million, though he cautioned that it was hard to say because Tribune does not report the performance of individual publications.
“Five years ago, I might have said a billion,” he said, “but it’s been a rough five years in that business.”
Analysts say that Newsday illustrates the paradox Tribune faces: The best way to raise cash to meet short-term demands is to sell the very same properties the company would want to keep in the long run because they generate healthy profits.
The News and The Post are fierce competitors for readers and advertisers in New York City, and the pursuit of Newsday could become a high-stakes battle between Mr. Zuckerman and Mr. Murdoch. Thus, the jockeying for control of Newsday could decide the fates of three of the nation’s largest newspapers, and dominance in Long Island, with nearly three million people.
Last fall, Newsday reported weekday circulation of 387,000, 10th-highest in the country, and the highest for a newspaper serving a suburban area rather than a city. The Daily News had the country’s fifth-highest weekday circulation, with 681,000, and The Post was sixth, at 667,000.
The proposed deal between the News Corporation and Tribune would include a clause in which the News Corporation would eventually purchase Newsday, people involved in the talks said.
(News of Mr. Murdoch’s interest was first reported Thursday on the Web site of Crain’s New York.)
Mr. Zuckerman is also considering a joint venture between The Daily News and Newsday, according to people with knowledge of the auction.
For years it has been clear that New York City could not profitably support two tabloids. The Post has lost money for decades — tens of millions of dollars annually in recent years — but Mr. Murdoch has been willing to subsidize it, while people close to Mr. Zuckerman say The Daily News roughly breaks even.
The Daily News has healthy Sunday circulation — 726,000 last year — which is the most lucrative day of the week for ads. The Post, which did not print on Sundays for many years, still lags far behind in Sunday circulation, at 405,000.
Executives of each paper have long believed that putting the other out of business would provide some competitive breathing room. Owning Newsday would offer Mr. Murdoch a golden opportunity to ratchet up the pressure on The Daily News.
Cablevision, meanwhile, is said to be interested in acquiring Newsday outright. Cablevision, like Newsday, is based in Long Island, where the company also owns a local news station. Representatives for News Corporation, Cablevision and Mr. Zuckerman all declined comment.
A person briefed on Mr. Zuckerman’s plans confirmed that “he definitely intends to bid on it,” but added that no formal process had begun yet. The person was given anonymity because he was not authorized to discuss the matter. Mr. Zuckerman is chairman of Boston Properties, a major commercial real estate firm, and also owns U.S. News & World Report.
No one answered calls late Thursday to the main editorial and trade union at Newsday, Local 406 of the Graphic Communications Conference.
Mr. Murdoch’s interest in Newsday has long attracted speculation. Last year, for example, he considered bidding with a partner for the entirety of Tribune in an effort to establish a joint venture with The Post and Newsday. And in a quarterly earnings call last year Mr. Murdoch discussed his interest in combining the printing operations of The Post and Newsday.
Mr. Murdoch and Mr. Zell have also reportedly discussed a business relationship between Tribune and Dow Jones, which the News Corporation acquired last year for $5.6 billion. According to press reports last month, the two have talked about a deal in which Tribune would print editions of The Wall Street Journal at facilities in Florida and Los Angeles.
A press officer for Tribune declined to comment specifically on Newsday. But in a statement Thursday giving Tribune’s 2007 results, Mr. Zell said, “We have begun a strategic review of certain Tribune assets to determine whether capital can be more effectively redeployed into our core operations or toward reducing our outstanding leverage.”
Mr. Zell said last year that he would sell the Chicago Cubs and the team’s ballpark, Wrigley Field, but no deals have been struck yet. The company’s most pressing problem is the nearly $8 billion it borrowed to go private, raising its total debt load to $12.8 billion.
Analysts estimated last fall that Tribune would have debt service payments of more than $900 million a year. The company’s operating cash flow was $992 million last year and slowing significantly.
Citigroup is handling the Newsday sale.
Andrew Ross Sorkin contributed reporting.
Commentary: Its valuable pedigree has suitors salivating
NEW YORK (MarketWatch) -- Long Island, the sprawling suburban expanse, has over the years spawned Billy Joel, Howard Stern, Amy Fisher and Jerry Seinfeld (and, come to think of it, me). Its story has been chronicled by Newsday for decades. With nary a rival to speak of, it's hard to imagine a media market so dominated by a single newspaper voice for so long.
Yet, Newsday has reportedly been at the top of new Tribune Co. owner Sam Zell's to-sell list. The suitors are said to include News Corp. which owns MarketWatch, the publisher of this report, and Mort Zuckerman, whose properties include the New York Daily News. See full story.
10-K Watch: Tribune: Newsday Numbers; Disposals Planned;Interactive Revs Up 12 PercentJoseph Weisenthal
Friday, March 21, 2008; 12:54 PM
Privately-held Tribune has filed its 10-K, a day after reports suggested that the company was shopping Newsday. Also yesterday, the company released Q4 numbers showing it had swung to a loss. The filing gives a fuller picture of the challenge ahead for owner Sam Zell, as he copes with a struggling business and a monster debt load:
-- Newsday: Revenue at the Long Island-based paper is in a steady decline. 2007 revenue was $498 million, down from $541 million in 2006 and $574 million in 2007. Note that in addition to the actual Newsday paper, the unit includes a few niche, Long Island-serving magazines, as well as a number of pennysavers in the region. Presumably all of these assets would be included in any sale of the unit.
-- Interactive: The filing makes you do a little bit of legwork to figure out the company's annual interactive revenue.
What they say is that total interactive revs increased by 12 percent or $27 million, by which we can calculate that 2007 interactive revenue came to $252 million, up from $225 million in 2006.
Using another clue, 2005 interactive revenue was $174 million. This means that the rate of interactive growth slowed precipitously year-over year, from 29 percent (05-06) down to the aforementioned 12 percent (06-07). Given that digital growth will be key for Zell, this decline is troubling.
-- Balance sheet: Just to give you a sense of how much leverage is behind this deal. At the end of 2006, Tribune had $3.6 billion worth of long-term debt on its books. At the end of 2007, post-acquisition, that number is up to $11.8 billion. Cash and cash equivalents on hand comes to $233 million, up from $174 million. Note that Zell invested an extra $65 million into the company, upon closing his purchase.
-- Deals: Tribune may make some acquisitions, but it's definitely more interested in divestitures:
" We intend to pursue dispositions of certain assets or businesses or other transactions to enable us to repay a portion of our indebtedness and meet our financial or operating covenants contained in our debt agreements. In addition, we continuously evaluate our businesses and make strategic acquisitions and investments, either individually or with partners, and divestitures as part of our strategic plan."
It also made mention of possible interactive deals, using almost the exact same language as was found in MSO's 10-K earlier this week (must be the preferred legalese at the moment):
"Moreover, competition for certain types of acquisitions is significant, particularly in the Interactive space. Even if successfully negotiated, closed and integrated, certain acquisitions or investments may prove not to advance our business strategy and may fall short of expected return on investment targets."
By ALLEN P. ROBERTS Jr.
LA Business Journal
The parent company of the Los Angeles Times reported a $79 million fourth quarter loss as advertising sales declined across all categories.
The Tribune Co.’s loss, released late Thursday, is in sharp contrast to a profit of $233 million a year earlier.
Revenues for the Chicago-based media giant declined 12 percent to $1.27 billion.
Revenues were down widely, including a 13 percent decline in publishing. Advertising was off 15 percent, led by a 25 percent plunge in classified advertising revenue.
The company also said full-year net income was $55 million, down significantly from $661 million for 2006.
Tribune blamed the declines on lower revenues, higher interest expense and other factors as advertising and circulation continued to decline.
Tribune also said it eliminated 700 jobs during the final quarter.
Tribune Co. went private at the end of last year in an $8.2 billion buyout led by Chicago billionaire Sam Zell, but it still reports its financial figures due to its publicly traded debt.
Thursday, March 20, 2008
It must be hard to be Sam Zell. Mumble an obscenity at an employee and it's all over YouTube. Take over Tribune Co. on the backs of employees and suffer their magpie chattering about the fate of journalism.
And those politicians, you never know what they'll do. Zell probably figured he had covered himself for his scheme to sell Wrigley Field to the taxpayers. His family trust lavished $100,000 in 2006 on the Richard M. Daley Campaign Committee. For the 2002 election, Zell and his wife supported Gov. Blagojevich with $82,500. Four years later, Zell switched to Judy Baar Topinka, but no harm was done.
Zell had every right to think the politicians would meekly accept his taxpayer-subsidized plan to wring profit out of Wrigley. But Mayor Daley hasn't. He has refused to support Zell's suggestion that pesky landmark rules be relaxed to make the ballpark is even more valuable. Daley also spurned the Zell proposition to have taxpayers pay for Wrigley through sales tax receipts. Daley this week argued sensibly that government has more pressing needs before it can consider a donation to Tribune Co. and a new Cubs owner.
The Zell plan is for the state to buy Wrigley Field from Tribune with proceeds from increased sales taxes generated at the ballpark. The state would create a special sales tax district that includes the park and perhaps the surrounding bars and other businesses.
Zell's sales tax plan is a new spin on tax-increment financing districts, or TIFs, that tap property taxes. The Illinois Sports Facilities Authority, the state agency that would buy Wrigley, has called the funding mechanism a STIF, without any intended humor.
Throughout Chicago, wherever people gather for entertainment or revelry, the sales taxes they pay go to the common good. That's true for the crowds at the United Center, the clubs along Rush Street and the audiences at Steppenwolf. The sales tax charged on every beer and ticket pays for essential city and state services, such as roads and schools.
But if Zell gets his way, this would not be wholly true for Wrigley. There, the growth in sales taxes for everything from Cracker Jack to skyboxes would be siphoned to pay Tribune for the ballpark.
And what is the payoff for this public investment? Ownership of a pristine ballpark, says ISFA chairman and former Gov. James Thompson. Never mind that this is a ballpark the Cubs are not leaving and that every potential buyer of the team knows is integral to the franchise's appeal.
And who profits? Tribune and the Cubs' new owners if the sales tax cash goes toward Wrigley renovations.
The timing is bad on two counts. For one, the state and local governments are struggling to pay their bills. This is no time to help Zell. And two, TIFs as a means to finance just about anything right now are drawing growing criticism.
TIFs can be a smart way to encourage investment amid blight. They are designed to skim the growth from a district's tax revenues to subsidize private developments that wouldn't happen otherwise. But they have been twisted beyond recognition. Covering more than 30 percent of Chicago's land area, TIFs are the monster that ate the city's tax base.
This page has strongly argued against any sale of Wrigley Field to the state, and we're pleased to see the growing opposition in Springfield and City Hall. But the ballgame's not over. Still pushing for the sale are the state's acquisitive sports facilities authority, hoping to show off for those who would grant Chicago the 2016 Olympics, and a magnate not used to hearing the word "no".
March 20, 2008
The move goes further than any previous newspaper-TV station collaboration, said Ed Wilson, new president of Tribune Broadcasting. He said the merger would give advertisers "a single point of contact" for reaching the South Florida market via print, broadcast and the Internet. It also would enable the company to more efficiently create editorial content, particularly in "lifestyle" areas, that could be used on all three platforms.
Chicago-based Tribune owns the Los Angeles Times and KTLA Channel 5. Since Chicago billionaire Sam Zell took over as chief executive in December after leading an $8.4-billion buyout of Tribune, he has talked about trying to wring more synergy from the company's same-city print and broadcast outlets. Previous Tribune management also favored the idea, but the goal proved elusive.
"This is the new Tribune," Wilson said. "Instead of sitting and debating, let's at least give it a try."
Zell and top lieutenant Randy Michaels, CEO of broadcast and interactive, have expressed enthusiasm for combining some operations of The Times and KTLA. Wilson said no Fort Lauderdale-style merger was on the horizon, but he and Times Publisher David Hiller said the newspaper and TV station were ramping up their cooperation.
The two have discussed joint ad sales, Hiller said, adding that Times reporters are doing more KTLA appearances lately and "we do a ton of Web video together."
Wilson said he could envision more complete mergers occurring in smaller markets. "If it works, our competitors might give it a try," he said.
WSFL, like 13 of Tribune's 23 stations, gets prime-time entertainment as an affiliate of the CW network, but it doesn't have a news operation of its own. It contracts with Miami's NBC affiliate, WTVJ, for a nightly local news broadcast.
The Sun-Sentinel has an in-house TV studio and creates many of the video news clips shown on its website. It also produces news content for local TV in Fort Lauderdale.
At least initially, most of the editorial content that the newspaper would create for WSFL would be features on travel, food, fashion, entertainment and the like, Sun-Sentinel Publisher Howard Greenberg said Wednesday.
He said that advertising salespeople for the Sun-Sentinel, WSFL and their respective websites would begin working side by side next week. Editorial projects and a marketing push to help brand the effort would be developed over the coming months, he said.
Greenberg, who also serves as interim publisher of Tribune's Orlando Sentinel, is assuming the additional role of WSFL general manager. Broadcasting President Wilson said Greenberg was the first person to hold newspaper publisher and TV general manager titles at the same time.
Tribune Creates Multimedia Powerhouse
in South Florida
Company Joins Broadcast, Interactive and Newspaper
Operations Under One Roof; Properties Will Collaborate
to Generate Unique Content and Sales Opportunities
Wednesday, March 19, 2008
Note to KTLA: the TV station that Sam Zell's Tribune company owns in South Florida is moving in with the Fort Lauderdale Sun-Sentinel newspaper. Zell has said the company would start to experiment with new ways of doing things at its smaller properties before importing them to Los Angeles etal. Memo from Zell exec Ed Wilson after the jump.
Also: Zell is getting less ink for being profane as he continues to visit Tribune properties and that's not necessarily a plus, says Chicago Tribune columnist Phil Rosenthal:
Because what's being said as he and Randy Michaels, Tribune Co.'s chief executive of Internet and broadcasting, continue their road show is still newsworthy—even if it has nothing to do with cursing, Cubs and Wrigley Field....
"Tribune was a very old company. It was very tradition bound," Zell said at WGNO-TV in New Orleans earlier this month, deriding predecessors as "sleepy."
Zell has previously sounded exasperated that Channel 5 and the L.A. Times don't do more together.
Wilson memo:Today marks the beginning of a bold new era for Tribune Broadcasting—we’re taking the unprecedented step of joining the print and broadcast operations of WSFL in South Florida with those of the South Florida Sun-Sentinel. For the first time ever, we’ll have all our media properties in this region under one roof in Ft. Lauderdale.
And that is great news for consumers and advertisers. It will give us the chance to develop new content, programming and sales opportunities in such areas as fashion, food, travel, entertainment and lifestyle. It will give advertisers a single point of contact and a way of buying media efficiently across all our properties in South Florida.
Since we didn’t think he had enough to do while running two newspapers, Sun-Sentinel publisher Howard Greenberg, who is also serving as interim publisher of the Orlando Sentinel, will assume the additional responsibilities of general manager at WSFL. Also joining the new leadership team at WSFL is Allyson Meyers, who will serve as station manager.
Howard knows the region better than anyone; Ally knows TV sales and operations. Together they’ll make a great team....Ed Roderick
Zell ready to flex Tribune Co. muscle
- Phil Rosenthal | Media
- March 19, 2008
Which is too bad.
Because what's being said as he and Randy Michaels, Tribune Co.'s chief executive of Internet and broadcasting, continue their road show is still newsworthy—even if it has nothing to do with cursing, Cubs and Wrigley Field.
Like a possible affiliation change for Tribune Co.'s San Diego station, KSWB-TV, from The CW to Fox that initially was shot down by their predecessors atop the Chicago-based media concern.
Or Zell's statement that previous Tribune Co. management nixed an opportunity to invest in Google, although it's not clear what opportunity he means. And how the old regime vetoed spending for high-definition capability for Tribune's ABC station in New Orleans when it was building a new facility there, which the current management isn't rushing to invest in, either.
Then there's the revamp of Tribune television stations' Web sites in the coming weeks using a platform used by Toys "R" Us in a bid to be more flexible, functional, attractive and e-commerce-friendly.
"Tribune was a very old company. It was very tradition bound," Zell said at WGNO-TV in New Orleans earlier this month, deriding predecessors as "sleepy."
A Tribune spokesman indicated the statements of Zell and Michaels speak for themselves. Former Tribune Co. Chairman and CEO Dennis FitzSimons and former Tribune Broadcasting chief John Reardon declined comment.
According to Zell, old Tribune management rejected an invitation to switch affiliation from The CW to Fox in San Diego, where Fox parent News Corp. now has an affiliate that transmits from over the border in Tijuana, Mexico.
"The good news is, Randy and I found out about it four or five weeks ago," Zell said during a visit last week to Tribune's KPLR-TV in St. Louis.
"I called Rupert [Murdoch of News Corp.], and I said, 'Rupert, what the [bad word] is going on?' ... He says, 'Well, why didn't you take it when we offered it in the first place?' I said, 'Well, you didn't call me. You called those [less bad word].' "
So, trading "Gossip Girl" and "Smallville" for " American Idol" and the National Football League?
Yeah, that's a tough call.
"It isn't that they were happy with CW. [They] were afraid to upset them," Michaels said.
Now how this will play out and on what timetable is unclear. Tribune has a contract with The CW, a joint venture of CBS Corp. and Time Warner's Warner Bros. Executives at CW couldn't be reached.
"But the contract has us committed to them and has commitments from them to us," Zell said. "There seems to be some question as to whether those commitments have been fulfilled or not."
The difference between the old Tribune and the new Tribune, according to Michaels, is how the company flexes its muscles.
"We're going to exercise some clout," Michaels said in St. Louis. "It's crazy that we let them give us shows that 18-to-24-year-old girls watch [as a lead-in] into the news. Someone sat down and said, 'We're going to come up with a program that no one who likes the news could possibly watch' and then they give it to us. What are they thinking? … We deserve to have something better than the [offal] they're feeding us."
Although Tribune Co. has six Fox stations and 14 CW affiliates among its 23 stations, Zell simply doesn't believe the company leveraged its position properly.
"I don't think Rupert Murdoch paid much attention to whoever called him from the old Tribune and that's a huge difference," he said in New Orleans. "We've got the muscle and we've got to use it."
He swears he will.
Promotional material: Hanke Gratteau is the Chicago Tribune's new deputy managing editor, news. The paper's associate managing editor for metropolitan news since 2002, Gratteau was an assistant to the late columnist Mike Royko early in a career in which she was a reporter, columnist, investigative team leader and city editor. She is married to Chicago Sun-Times columnist Mark Brown.
[Former Tribune Co. Chairman and CEO Dennis FitzSimons declined comment.]]
...that's because he's busy counting the $48 million he walked away with.
Smart move on Tribune's part. Companies become successful because they are aggressive and passionate. There hasn't been passion in the hallways of the Tribune Tower since the Colonel ran the place 60 years ago. Nice to see these guys have a 2008 model and not a 1970's model.