They don’t call real estate tycoon Sam Zell the “gravedancer” for nothing. Or even “Yosemite Sam” for that matter. Zell performed his magic today, filing Chapter 11 for Tribune Co., one of the most storied names in U.S. journalism.
The Chicago Tribune was founded in 1847 with an original press run of 400 copies. It survived the Civil War, Great Chicago Fire of 1871—reappearing two days after the blaze totaled its headquarters with the headline, “Chicago Shall Rise Again”—Great Depression and WWII. It could not, however, survive the crushing debt connected with Zell’s scheme to transform the publicly traded company into the country’s largest employee-owned media company.
The Chicago Tribune, Los Angeles Times, Baltimore Sun, Sun-Sentinel and Hartford Courant have already been savaged by staff cutbacks ordered by Zell in his effort to pay down the massive $12B debt connected to the buyout of the Tribune. Thousand of talented and hard-working journalists were fired at those papers so Zell could make a go of it. That was for naught. There will be more blood. [The lucky stiff at Newsday are counting their blessings today. Zell sold that Long Island daily earlier this year to raise some much needed cash.]
Sam blames “factors beyond our control” for tossing the media institution onto the bankruptcy heap. He sees the restructuring as a tool to “bring the level of our debt in line with current economic realities.” The reality is the $12B was for too much for a newspaper company to carry even in the most flush of times. Zell rolled the dice, hoping the real estate properties of the newspapers could bail out the "ink and paper" or heart and soul part of the business. That was not to be.
The newspaper industry is in sad enough straits these days. It doesn’t need the stigma of bankruptcy attached to some of the country’s biggest and most influential papers. Zell’s bankruptcy did let the cat out of the bag. Be sure other newspaper owners are watching Zell’s financial maneuvering. You can bet Brian Tierney and his ownership crowd at the Philadelphia Inquirer and Philadelphia Daily News will closely monitor the situation.
About that Yosemite Sam tag. Zell earned that nickname from staffers at the Los Angeles Times for his “cartoon naughtiness,” according to Variety. It reported in March that Zell in one of his classic rants told workers at the 126-year-old paper that he was the newspaper’s Viagra.
We know Bugs Bunny always got the best of Yosemite Sam during their Looney Tunes encounters just as the Tribune debt got the best of Zell.