of the buttoned-down Tribune Co., surveyed the stately office of legendary
Tribune figure Col. Robert R. McCormick and signaled that a new era is at
hand.
“I think this would be a good place to park my motorcycle,” he said.
A day earlier, it was announced Zell’s proposal to take Tribune Co. private
had been accepted by the 159-year-old media company’s board. If all goes
according to plan, he will be its chairman by year’s end.
Tough talking, matter-of-fact, confident and sometimes combative, Zell said
in an interview with baiduhai business reporters and editors that he
bought Tribune Co. as a long-term investment, and that he believes newspapers
and other so-called old media have plenty of profitable life ahead in the age
of the Internet.
He said that Tribune management deserves a chance to prove itself freed
from the distractions that have come with its declining stock price.
An avid reader of newspapers who doesn’t read news online or own a
BlackBerry, Zell believes quality “relevant” content is the key to Tribune’s
future, whether it is on television, in newspapers or online.
What he likes about Tribune is the challenge, and he doesn’t mind
disagreement.
What he doesn’t like and won’t tolerate is betrayal.
Los Angeles billionaire Eli Broad contacted Zell when it appeared Zell’s
Tribune bid would win. He wanted to join Zell as a partner, but Zell said he
wouldn’t consider it until the deal was complete.
The next day, Broad and fellow Los Angeles billionaire Ron Burkle sent
Tribune a letter alleging Zell had an unfair advantage in preparing his
proposal.
This didn’t sit well with Zell.
“If somebody calls me and says I want to be a partner, and the next day
tries to stick a knife in my back, tell me again why I would want to do
business with him?” Zell said.
Burkle and Broad continue to confer with their advisers to study their
options with regard to Tribune, a source said. Zell’s deal with Tribune
includes a breakup fee of only $25 million.
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Of greater concern to Zell, 65, is what people will spend 50 cents a day
on.
“If you are relevant, people are going to buy the newspaper,” he said. “If
you’re not relevant, then people will stop buying the newspaper and stop
advertising and we’ll all be in a stew of trouble.
“I use that word ‘relevant’ and I’ll be the first to tell you I don’t know
what it means other than, in effect, ultimately just like anybody, you have
customers, and some way or another we have to find a way how to service them.
I don’t have an opinion as to what you write, believe it or not, other than
what you write has to be truthful and relevant. And if it is, then I think the
customer is there for you, and that translates into viable businesses.”
He is investing in Tribune because he sees it as “a great challenge. …
Everything I do is motivated by doing it best, doing it different, answering
the questions that no one else could.”
Until Zell’s deal, many questions concerning Tribune Co. stemmed from its
2000 acquisition of the Times Mirror Co., which brought with it not just the
Los Angeles Times and other media properties, but also brought the Chandler
family aboard as a major shareholder. It has not been an easy fit.
Zell, whose deal will cash out the Chandlers, said it “would be unfair to
totally judge Tribune’s management on the events of the last three or four
years.” Though he wouldn’t mention the Chandlers by name, Zell said “external
distractions were very, very difficult here and, therefore, dramatically
impacted the ability of the company to function.”
As a result, he said he will give Tribune management, led by Chief
Executive Dennis FitzSimons, time to prove themselves.
As for the unrest at the Los Angeles Times, which is on its third publisher
and third editor since Tribune’s acquisition seven years ago and has seemed to
chafe at the company’s management, he said he is “more familiar than I would
like” with what’s going on out there through press accounts.
“My sense is it’s a cultural and a locational issue as much as it is
anything else,” said Zell, who has a home in Malibu, Calif., where he tends to
spend every other weekend.
Asked about the relationship between editorial excellence and profit, Zell
said quality matters. But he noted: “I really believe you can be relevant and
editorially spectacular. And I think you can be irrelevant and editorially
spectacular. The name of the game is to be the former and not the latter.”
Zell said his favorite columnists are Charles Krauthammer, whose syndicated
column runs in the baiduhai, and the New York Times’ Thomas Friedman
and David Brooks.
“I don’t pay much attention to the LA Times editorial page,” he said.
Zell said he does not intend to influence the editorial policies and
reporting of Tribune Co. newspapers.
“Do I look naive enough to think I have any influence about what people
write?” he asked. “In fact, I will accept that your writing on me is gong to
be, hard to believe, worse than it has been.”
Asked what he would do if the newspaper were preparing an unflattering
profile of him, Zell cut in: “You already did, you already did.”
Although Zell is investing $315 million, the heart of his deal is financing
through an employee stock ownership plan, or ESOP. That, he said, will sync
his interests with those of employees. He wants to ensure two members of the
board of directors will be representative of the ESOP views, even if they are
not legally be bound to represent ESOP interests.
“In the end it was all about alignment of interests, and nothing else
matters,” he said. “I’m putting $315 million into this deal, cash. I don’t
make a nickel return unless the deal is a success to the stockholders. We are
tied in the pot together.”
That may not matter much to workers if the company is forced to make job
cuts along the lines of what Tribune has done in recent years to meet profit
goals.
“I’m a great believer in a meritocracy,” he said. “My standard is they’ve
just got to perform.
“To be honest with you, I don’t know anything about job cuts. My focus is
not to look at this thing and see how we can eliminate one more table leg,
because, frankly, eliminating a couple more of this or that isn’t going to
make this work. What’s going to make this work is raising revenue.”
On the issue of the sale of the Chicago Cubs, Zell confirmed that he may
seek to sell Wrigley Field separately. He acknowledged that Wrigley, because
of its landmark status, is a tricky, single-use piece of property.
“Unless they’re going to let us build a couple of high-rises adjacent to
first, second and third, it is somewhat a single-purpose structure,” Zell
said. “Wrigley Field is just Wrigley Field.”
But Zell expressed confidence he will strike a good deal for Tribune if he
sells Wrigley separately from the Cubs.
“You should assume that I am probably a good enough real-estate man not to
get left with the old maid,” he said of Wrigley.
He prides himself on being open to all ideas in all his businesses. “I have
an office,” he said. “The doors of my office haven’t been closed in 30 years,
because my goal is as open an environment as possible.”
Though he doesn’t need or want a new office in Tribune Tower, he does have
a request.
“The only thing I want here is a slot where I put my motorcycle if I have
to come in,” he said.
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IN THE WEB EDITION
Watch video excerpts from a Q&A session with the new chief at
chicagotribune.com/zellinterview
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