Zell: Sell The Times

30 July 2008 |permalink | email article

“WHERE will Sam Zell take the struggling Tribune Company? Connie Bruck wrote in her New Yorker profile of the real estate magnate in November 2007. Seven months earlier, Zell signed an $8.2- billion deal that would give him control of the giant media conglomerate.

Even before Zell acquired the Los Angeles Times, the Tribune Company treated the newspaper as if were a crown jewel and LA, bigger than Chicago, a captured Roman province like Gaul.

Imported publishers and a turnover of respected editors because they refused to make deep staff reductions and compromise quality began to take a toll.

It has only gotten worse. Last month the Times said it would cut 150 newsroom jobs – more than one-sixth of the staff jobs and publish 15 percent fewer pages.

Sections have been merged or eliminated and, as LA Observed’s Kevin Roderick, a former LAT editor noted, the “newspaper feels like the smallest and lightest Los Angeles Times I’ve ever seen.”

After Zell acquitted the Times, offers from Eli Broad, Ronald Burkle and David Geffen to buy it were rebuffed.

What amazes is the current lack of outrage about the decline and fall of LA’s most important asset. In another era, long before the Chandler family sold out to Tribune, the powerful civic Committee of 25 would have insured that such a sale never happened.

Gary Spiecker, my opinion editor at the deceased Herald Examiner who joined the Los Angeles Times in 1989, sent me an 11-word e-mail yesterday which summarizes the anger many of us feel about the loss of scores of remarkable journalists: “Well, Joe, I’m done here. Opinion’s death is my demise too.”

In June, Standard & Poor’s noted that Tribune could face default by the end of the year. The problem continues to be generating enough cash to meet the terms of the loans that were arranged late last year.

Selling the Chicago Cubs and Wrigley Field won’t solve Zell’s problems. Famous for his bluntness, he has said, “The way I look at transactions, and the way I look at risk, I have no room for sentiment.”

With the possibility of default slipping into 2009 (Tribune newspaper ad revenue was down 15% in the first quarter) Zell should consider selling the Times.

I hear some talk about the formation of a private syndicate which cares deeply about journalism in LA that might offer to buy the Times in a cash deal.

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