October 5, 2010
At Flagging Tribune, Tales of a Bankrupt Culture
By DAVID
CARR
In January 2008, soon after the venerable Tribune Company was sold for $8.2 billion, Randy Michaels, a new top
executive, ran into several other senior colleagues at the InterContinental Hotel
next to the
Okay, first of all: If I buy something, then its mine. And if I spend $8,200,000,000 to buy it, then
it is really, really mine. The essence
of Capitalism is property rights. In
this case, the billions risked on a struggling firm provide the incentive to
make that firm successful.
The armchair quarterback
has no such incentive. A loudly critical
armchair quarterback is properly suspected of a hidden agenda.
Mr. Michaels, a former radio executive and disc jockey, had been handpicked
by Sam
Zell, a billionaire who was the new controlling shareholder, to run
much of the media company’s vast collection of properties, including The
Chicago Tribune, The Los Angeles Times, WGN America and The Chicago Cubs.
I wonder if Mr. Carr
worked at a McDonald’s when he was in high school. Then (in his construction) it would be proper
to say that this piece was authored by “David Carr, writer and drive-thru
window clerk”.
After Mr. Michaels arrived, according to two
people at the bar that night, he sat down and said, “watch this,” and offered the waitress $100
to show him her breasts. The group sat dumbfounded.
“Here was this guy, who was responsible for
all these people, getting
drunk in front of senior people and saying this to a waitress who many of us knew,”
said one of the Tribune executives present, who declined to be identified because he had left the
company and did not want to be quoted criticizing a former employer. “I have
never seen anything like it.”
Mr. Michaels, who otherwise declined to be
interviewed, said through a spokesman, “I never made the comment allegedly attributed to
me in January 2008 to a waitress at the InterContinental Hotel, and anyone who
said I did so is either lying or mistaken.”
First he writes that Mr.
Michaels “sat down and said ‘watch this’”.
Two sentences later he
quotes, “…getting drunk in front of senior people and saying…”.
Those were conflicting
stories. Therefore one of them is
wrong. Or both.
The quotation is from an
anonymous source who said he didn’t wish to be identified with that
criticism. After all, he was not sworn
to tell the truth. In court, a witness
is not allowed to be anonymous but I’ll bet Mr. Carr will claim that he is the
noble one to defend his source from cross-examination.
Mr. Carr says he has a
second source from the bar but does not claim it is the waitress. Wouldn’t she be the most important
witness? If she is not complaining, why
should we care about two unidentified drinkers?
In any case, Mr. Michaels
denies it all and the only person publicly disputing that is Mr. Carr, but he
wasn’t there.
It was a preview of what would become a rugged
ride under the new ownership. Mr. Zell and Mr. Michaels, who was promoted to chief executive
of the Tribune Company in December 2009, arrived with much fanfare, suggesting
they were going to breathe innovation and reinvention into the conservative
company.
So, two years after the
InterContinental incident, Mr. Michaels was promoted by those with $8 billion
dollars at risk.
With two years of
hindsight, the people who had the most to lose endorsed Mr. Michaels.
On the other hand, we
have the anonymous gripes of barflies. But not of the alleged victim.
Mr. Carr is concerned
about journalistic integrity. That’s why
he reports drunken rumors from 33 months ago.
By all accounts, the reinvention did not go
well. At a time when the media industry has struggled, the debt-ridden Tribune
Company has done even worse. Less than a year after Mr. Zell bought the
company, it tipped into bankruptcy,
listing $7.6 billion in assets against a debt of $13 billion, making it
the largest bankruptcy in the history of the American media industry. More than
4,200 people have lost jobs since the purchase, while resources for the Tribune
newspapers and television stations have been slashed.
Mr. Zell’s company has a
negative net worth of more than $5 billion less than a year after he bought
it. Mr. Carr thinks everybody should
keep his job.
The new management did transform the work
culture, however. Based on interviews with more than 20 employees and former
employees of Tribune, Mr. Michaels’s and his executives’ use of sexual innuendo, poisonous
workplace banter and profane invective shocked and offended people
throughout the company.
The company said Mr. Michaels had the support
of the board.
Nice contrasts. “Staid company” and “frat
house”. Mr. Michaels “offended
people throughout the company” but had “the support of the board”. Mr. Carr has collected more than 20 opinions.
And what’s with “more
than 20”? I understand that Mr. Carr
doesn’t want to name them, but shouldn’t he at least know how many they
are? Or is the number of interviewees
just another opinion?
“Randy is a tremendous motivator, very
charismatic, but he is very nontraditional,” said Frank Wood, a member of the
Tribune board. “He has the kind of approach that motivates many people and
offends others, but we think he’s done a great job.”
The company is now frozen in what seems to be
an endless effort to emerge from bankruptcy. (The case entered mediation in
September after negotiations failed, and a new agreement between two primary
lenders was recently announced.) But even as the company foundered, the tight
circle of executives, many with longtime ties to Mr. Michaels, received tens of millions of dollars in
bonuses.
Mr. Carr is now frozen in
what seems to be an endless and vapid rant.
He doesn’t trust Capitalism and he doesn’t like private property. He thinks money used for managerial incentive
is wasted and we should bring in bureaucrats to maintain the status quo.
Nobody is worth more pay
than what Mr. Carr is paid. And the
Tribune belongs to Mr. Carr just as much as Mr. Zell, right? It is all so unfair.
Behind the collapse of the Tribune deal and
the bankruptcy is a classic example of financial hubris. Mr. Zell, a
hard-charging real estate mogul with virtually no experience in the newspaper business, decided
that a deal financed with heavy borrowing and followed with aggressive
cost-cutting could succeed where
the longtime Tribune executives he derided as bureaucrats had failed.
Mr. Zell has experience
making money. Mr. Zell has experience
making hard decisions. Mr. Zell has
virtually no experience in the newspaper business.
Those are three reasons
that the Tribune remain a media fixture through the 21st
Century.
And while many media companies tried
cost-cutting and new tactics in the last few years, Tribune was particularly
aggressive in planning
publicity stunts and in mixing advertising with editorial material.
Those efforts alienated longtime employees and audiences in the communities its
newspapers served.
“They threw out what Tribune had stood for,
quality journalism and a real brand integrity, and in
just a year, pushed it down into mud and bankruptcy,” said Ken Doctor, a
newspaper analyst with
Outsell Inc., a consulting firm. “And it’s been wallowing there for the
last 20 months with no end in sight.”
Finally,
a name.
Ken Doctor has the diagnosis.
He works for an outfit
that offers sales training. It is not
clear why I should care about his opinion.
He simply makes a vague, negative comment which Mr. Carr offers as
evidence.
I bet that if the Trib hired Mr. Doctor we would discover that they need
sales training.
Mr. Zell has acknowledged that the deal has
not turned out how he hoped. But noting a recent upturn in results, he said
through a spokesman, “Tribune has made significant strides in becoming a
current, competitive and sustainable media company. The measure of management’s
performance is reflected in the increased profitability of Tribune’s media
properties.”
The Purchase
An
Innovative Deal for Little Cash
When Mr. Zell purchased the Tribune Company in
December 2007, he bought into an industry desperately in need of new ideas. And
Mr. Zell, a consummate deal maker, had a barrelful.
Tribune, home to some of the most important
newspapers in the country — The Baltimore Sun, The Hartford Courant and The Orlando
Sentinel as well as The Chicago Tribune and The Los Angeles Times — had been
battered by big drops in
advertising and circulation. According to Mr. Zell, the company was also
suffering from stodgy thinking and what he called “journalistic
arrogance.”
Here is my
diagnosis: Structural changes in the
macro-economy imposed drops in advertising and circulation. Creative destruction (described by
Schumpeter) is the prescription.
Luddites are the obstruction.
Messrs. Zell and Michael
must overcome great inertia and refocus their entire industry.
“There’s a new sheriff in town,” he said, in
speeches that were peppered with expletives, as he toured the Tribune’s
offices.
It was a message that some within the company
initially welcomed.
“Sam Zell was sort of a rock star when he went
around and toured the various properties,” said Ann Marie Lipinski, the former
editor of The Chicago Tribune who left less than a year after the takeover.
“People had been living with uncertainty for so long and they hoped something
good would come from an owner with a proven track record of success in other
businesses.”
Mr. Zell’s first innovation was the deal
itself. He used debt in combination with an employee stock ownership plan,
called an ESOP, to buy the company, while contributing only $315 million of his
own money. Under the plan, the company’s discretionary matching contributions to the 401(k) retirement plan for nonunionized Tribune employees
were diverted into an ownership stake. The structure of the deal allowed the Tribune to become an
S corporation, which pays no federal taxes, making taxpayers essentially silent
partners in the deal.
This is some of that
journalistic arrogance that Mr. Zell must cope with. Subchapter S does not avoid taxes – indeed it
speeds the tax obligations of the owners.
The idea of taxpayers as silent partners is Mr. Carr’s wishful thinking.
The $8 billion in new loans used to finance the deal left the company with
$13.8 billion in debt. But Mr. Zell was convinced that by quickly
selling the Chicago Cubs and other assets while improving operating margins,
the company could emerge as a valuable property. It was typical Zell: a risky
approach to gain control over a large, distressed asset while minimizing his
own exposure, something he acknowledged in a company newsletter:
“I’ve
said repeatedly that no matter what happens in this transaction, my lifestyle
won’t change,” he wrote to his combination employees/shareholders. “Yours, on
the other hand, could change dramatically if we get this right.”
Remember that other NYT
writer who quoted (in May, 2003) President Bush but used an ellipsis to reverse
the meaning? The president said that
some al Queda leaders were killed so they weren’t a
problem but Maureen Dowd claimed he said that al Queda
wasn’t a problem.
In that same tradition,
Mr. Carr reverses Mr. Zell’s meaning:
Mr. Zell said that he is already rich, so the employees and other
stakeholders stand to reap the most relative gain.
Mr. Carr claims he said
he can’t lose and only the employees are taking risk. Now, if Bill Press, Miles O’Brien and the
reliable Paul Begala will just repeat Mr. Carr’s
spin, the tradition will be complete.
His second innovation was bringing in a new management
team, largely from the radio business, that, like Mr.
Zell, had little newspaper experience, which constituted more than 70
percent of the company’s business.
Mr. Michaels, who was initially in charge of
Tribune’s broadcasting and interactive businesses as well as six newspapers,
was a former shock jock
who made a name for himself — and a lot of money for Mr. Zell — by scooping up
radio stations while at the Zell-controlled Jacor
Communications. Jacor was later sold to Clear Channel Communications for
$4.4 billion.
In turn, Mr. Michaels remade Tribune’s
management, installing in major positions more than 20 former associates from
the radio business — people he knew from his time running Jacor
and Clear Channel — a practice that came to be known as “friends and family” at
the company.
Mr. Carr equates
“experience” with “stability” and is fine with leaving everything the way it
is. But advertising and circulation are
not stable. If the Tribune is not profitable,
then it will descend to the stability of death.
Mr. Carr believes all
profits are evil and he assumes we all see it that way. The fact that Mr. Michaels made lots of money
for Mr. Zell is a reason to throw them both in jail, in Mr. Carr’s world.
One of their first priorities was rewriting
the employee handbook.
“Working at Tribune means accepting that you might hear a word that you,
personally, might not use,” the new handbook warned. “You might experience an
attitude you don’t share. You might hear a joke that you don’t consider funny.
That is because a loose, fun, nonlinear atmosphere is important to the creative
process.” It then added, “This should be understood, should not be a surprise
and not considered harassment.”
The new permissive ethos was quickly on
display. When Kim Johnson, who had worked with Mr. Michaels as an executive at
Clear Channel, was hired as senior vice president of local sales on June 16,
2008, the news release
said she was “a former waitress at Knockers — the Place for Hot Racks and Cold
Brews,” a jocular reference to a fictitious restaurant chain.
Mr. Zell takes an $8
billion risk and Mr. Michaels bets his career and their first priority was rewriting
the employee handbook? Sure. Only in Mr. Carr’s world.
Can Ms. Johnson be forced
to testify against herself in this clear-cut case of self-harassment? Or does it serve her right for becoming a
senior vice president at a company that hates women?
A woman who used to work at the Tribune
Company in a senior position, but did not want to be identified because she now worked at another media
company in
“The conversation just wafted down on all of
the people who were sitting there.” She also said that she was present at a
meeting where a female executive jovially offered to bring in her assistant to perform a sexual
act on someone in a meeting who seemed to be in a bad mood.
Two more hearsay
objections by a politically-correct, humorless (Is that redundant?) anonymous
ex-employee. She liked working at a
company she was slowly grinding down and left when vitality returned to the
company. It is for the best – she was
too good to work there.
Staff members who had concerns did not have
many options, given the state of the media business in
There have been complaints about Mr. Michaels in the past, however. In
1995, Mr. Michaels and Jacor settled a suit brought
by Liz Richards, a former talk show host in Florida who filed an E.E.O.C.
complaint and a civil suit, saying she had been bitten on the neck by Mr.
Michaels and that he walked through the office wearing a sexual device around
his neck.
“They were like 14-year-old boys — no
boundaries at all — but with money and power,” Ms. Richards said in an
interview.
After telling us about
the humorless ex-employee and attempting to smear Marc Chase without any reply
by Mr. Chase or by the Trib, Mr. Carr wrestles with
the fact that the vast company has no pending EEOC complaints. For a lesser journalist, this might be a
challenge. Not so for Mr. Carr.
He goes back 12 years
prior to the Zell acquisition – 15 years ago – to find someone with an axe to
grind. No doubt he would have gone back
further if needed.
During and immediately after Mr. Michaels’s
tenure at Clear Channel, three lawsuits were filed contending sexual harassment
at the company. One plaintiff, Karen Childress, a senior executive, said she
was fired after complaining about receiving lewd e-mail from senior company
executives. In her complaint, Ms. Childress also stated that women who slept with male executives at the
firm were promoted. The cases were settled out of court. Clear Channel
declined to comment on the lawsuits.
“Settled out of court”
means that the merits of Ms. Childress’s complaint were never examined. She was fired. She fired back. They settled.
That is not conclusive to anyone except Mr. Carr.
On Dec.
11, 2008,
the Tribune board was made aware that not everyone appreciated the new cultural
dynamics at the company.
The board received an anonymous letter detailing a hostile work
environment and a pattern of hiring based on personal relationships and
suggested that the company was leaving itself open to “potential litigation
risk.”
The letter also suggested that a senior
executive and a female employee had been discovered by a security guard engaged
in a consensual sexual act
on the 22nd-floor balcony. The board took the allegation seriously
enough that it hired an independent law firm to investigate it. A company
spokesman said the investigation found that the executive and the woman denied the incident and the
inquiry could find no evidence that such an incident had occurred or
that any harassment had taken place. But a person who worked in security at the time confirmed to
The New York Times that a security guard reported seeing the incident.
That person declined to be
identified because of the sensitivity of the issue.
So, an anonymous letter
suggests “potential litigation risk” and the board hires an independent law
firm to investigate. To this observer,
that seems like an abundance of caution.
The investigation found
no evidence that the incident ever happened.
But a security guard said he knew another security guard who said he saw
it. That may be double-hearsay, but it
is good enough for Mr. Carr to report that it was “confirmed to the New York
Times”.
By
September 2008, the historic
So after a security guard
says that another security guard says something, Mr. Carr continues, “By
September 2008” the Trib changed the head of
Security, he writes. Mr. Carr makes it
sound like a cover-up.
But look at the
timeline. The anonymous letter was
received in December, 2008. Changing the
head of security in September, 2008 is not a reaction to the letter. Did Mr. Carr lie? No, but he tried to deceive.
He then quotes from the
security head’s Facebook page about cigars and poker
tables, just like Woodward and Bernstein before him.
Mr. Phillips posted pictures of the party on
his Facebook page, showing Mr.
Michaels and Mr. Chase, along with Lee Abrams, a former radio programmer who
had joined Tribune earlier that year, playing poker and drinking in the ornate
office. The
“We are in the office of the guy who ran the
company from the 1920s to 1955,” Mr. Phillips wrote on his Facebook
page. “It’s normally a shrine. We pretty much desecrated it with gambling,
booze and cigars.”
A New Culture
Staff
Cutbacks and Promotions
While the new owner and managers went about
changing the corporate tone at Tribune, they were also under pressure to
service the enormous debt. In his initial tour of the company, Mr. Zell
promised there would be no job cuts. But like other media companies caught in
the downdraft of advertising revenue, the company was forced to cut staff and slash
budgets. Elsewhere, the company introduced promotions that seemed to have been
drawn from the radio playbook. At four of the company’s television stations, an
event called “CA$H GRAB,” in which a viewer was led into a bank vault and
allowed to scoop up dollar bills, was inserted in the middle of the station’s
newscasts. At WPIX-TV in
Mr. Abrams, who describes himself as an
“economic dunce,” was made Tribune’s chief innovation officer in March 2008. In
his new role, he peppered the staff with stream-of-consciousness memos, some of
which went on for 5,000 typo-ridden, idiosyncratic words that left some amused
and many bewildered.
“Rock n Roll musically is behind us. NEWS
& INFORMATION IS THE NEW ROCK N ROLL,” he wrote
in one memo, sent in 2008. He expressed surprise that The Los
Angeles Times reporters covering the war in
James Warren, the former managing editor and
In
“Don’t be a pussy,”
he told her. “You can always be harder on him.”
In a news meeting later the same day, she
found out that Mr. Zell was in negotiations to sell Wrigley Field to the state
sports authority.
“It was
hard to avoid the conclusion that he was trying to use the newspaper to put
pressure on Blagojevich.”
Through a spokeswoman, Terry Holt, Mr. Zell
denied he used the newspaper to business ends. “From Day 1, Sam vowed never to
interfere with the editorial content at any of Tribune’s media properties, and
he has always honored that commitment,” Ms. Holt said.
In a
criminal complaint, federal authorities accused Mr. Blagojevich of trying to
trade public financing of the stadium for the dismissal of some members of the
Tribune’s editorial board. An aide to the governor charged with pursuing the matter reported
back that Mr. Zell “got the message and is very sensitive to the issue,”
according to a criminal complaint filed by the
There is dispute about
whether Mr. Zell wanted his newspaper to take a hard look at then-Governor
Blagojevich, but even if he did: So
what? Compare that to the governor
trying to trade public financing of Wrigley Field for the firing of editorial
writers.
This is damning to Mr.
Zell only if you share Mr. Carr’s (and Mr. Blagojevich’s) views toward property
rights.
Ms. Lipinski said it was that episode and
other conflicts with management that prompted her resignation in July 2008,
just one month after Scott Smith, the paper’s longtime publisher, left.
“I was plenty used to crisis, in many ways
thrived on it,” said Ms. Lipinski, who had joined the newspaper as an intern in
1978. “But this nonsense was a form of intentional man-made distraction that
made the work impossible. I couldn’t protect my staff from what they could see
plainly with their own eyes.”
Mr. Zell’s various approaches didn’t slow the
company’s decline. In the third quarter of 2008, the company posted a loss of
$124 million, and the recession
made it difficult to sell the Cubs. His purchase of Tribune became, as
even he described it, “the deal from hell” and the company filed for bankruptcy on Dec. 8, 2008.
It wasn’t simply the huge debt that burdened
the company; the performance under new management continued to slide. While its
television division has since done well in the advertising rebound — over all, the 23 stations are on track in
2010 to pass $1 billion in revenue for the first time since 2007 —
Tribune’s newspapers have
continued to underperform the rest of the industry.
So the television
stations are doing well, but the newspapers continue to struggle.
Advertising has been inserted into The Los
Angeles Times in new and unsettling ways. In March, an ad mimicking the front page for Disney’s “Alice in Wonderland” was wrapped around the first
section and in July, a
fake version of the newspaper’s section for late breaking news, called LATExtra, was wrapped around the real one, promoting
Universal Studios’ King Kong attraction, with a lead “story” that read
“Universal Studios Partially Destroyed.” In April 2009, an advertisement posing as a news
article about NBC’s new show “Southland” appeared on the front page.
In July, the Los Angeles County Board of
Supervisors, the governing
body of the
The ads do not seem to have helped. The
Chicago Tribune’s circulation continues to slide, with weekday circulation down
9.8 percent in the first half of 2010. The Los Angeles Times is in worse shape, having lost 14.7
percent of its weekday circulation in the period. (Over all, the
industry lost 8.7 percent weekly circulation in the period.)
But Mr. Carr faults
attempts to breathe life into the papers and cites the Socialists on the
Imagine if you spent a
fortune to buy a dying newspaper and made great efforts to regain circulation, and
were then told by county government that your effort “makes a mockery of the
newspapers mission”. Who do they think
they are?
Radio, which was the core expertise of the
management, has had a mixed record since the takeover. After bringing in many
longtime associates of Mr. Michaels, WGN-AM, the company’s well-known talk
radio station in
In an effort to shake up the station, the
management jettisoned a sports talk show at night and installed someone with no
radio experience, Jim Laski, an
Steve Cochran, a longtime midday host who has
said he was dismissed as he was walking out of the bathroom this summer, said
the changes seemed aimed at destroying WGN.
“This was supposed to be their comfort zone,
what they were good at, and they have ruined a radio station that has had an
80-year relationship with its listeners,” he said.
“This is a collection of carnival workers who
are only looking after their friends, giving jobs to their buddies. Blagojevich
is on trial and you bring in a politician who has done time in jail?”
The Bankruptcy
Creditors
Lose, as Do Workers
More than the Tribune’s creditors took a
haircut: the shares that about
10,000 nonunion employees received in the ESOP deal are now worthless as a
result of the bankruptcy, although at the beginning of this year, the
company replaced the ESOP plan with a cash incentive contribution. But if and
when the Tribune exits bankruptcy, the value of the company will be worth
substantially less than when Mr. Zell bought a controlling interest. Under a proposed settlement
filed recently with the court, senior lenders, including the Angelo Gordon
hedge fund and Oaktree Capital Management, would
receive $5.5 billion, while other lenders with less priority would
receive far less. The case is in mediation.
Failing companies like to
give stock to employees to keep the votes in “friendly” hands. Mr. Zell brought a huge cash infusion to the
company and is using it in part for incentive payments that have concrete value
to the recipients. Yet Mr. Carr makes it
sound like it is Mr. Zell’s fault that the “nonunion employees” suffered from
the Trib stock decline. Weird.
Mr. Carr says “if and
when” as if bankruptcy could be perpetual.
In fact, Mr. Carr’s stated purpose in writing this article is to
influence the bankruptcy proceeding. Disingenuous.
Secured lenders might get
$5.5 billion from a company that has only $7.6 billion of assets and a negative
net worth. This is a magnificent
feat. Mr. Zell and Mr. Michaels are
digging out from under a terrible burden.
Unsecured creditors will be less satisfied, as will be the 4,200
downsized employees. But the Trib will get a fresh start. Brilliant.
“How can anybody say that they have done a
good job?” said Henry Weinstein, a former Los Angeles Times reporter who filed
a lawsuit, still pending, that contends that the use of employee pensions to
finance the deal was illegal.
“Anybody can make money when you are not
servicing the debt and cutting people. Zell and the people he brought in had no
idea what they were doing.”
And Mr. Zell? On Aug. 13, his
lawyers suggested that if
other junior creditors were paid, he should get his money back as well.
Mr. Zell is last in
line. If the unsecured creditors are
satisfied in some way, only then does he recoup his contributions, Mr. Carr
dryly observes. It is not his idea of
wealth redistribution.
Until the bankruptcy is resolved, Mr. Zell’s
handpicked team will continue to run the company, but it is frozen out of any
large strategic alliances or purchases. The issue of who will run the company
will remain unsettled until the bankruptcy is resolved. Mr. Zell remains the
chairman of the board and is no longer involved in the day-to-day operations of
the company.
Despite the company’s problems, the managers
have been rewarded handsomely. From May 2009 to February 2010, a total of $57.3
million in bonuses were
paid to the current management with the approval of the judge overseeing the
bankruptcy. In 2009, the top 10 managers received $5.9 million at a time
when cash flow was plummeting.
By submitting to a
bankruptcy court, Mr. Zell and Mr. Michaels gave up much discretionary
authority. The management team that is
saving the company received bonuses that had to be approved by the bankruptcy
court.
Get that, Mr. Carr? A judge said it was okay.
Mr. Wood, the board member, said, “We think
they earned those bonuses. They’ve done a fabulous job in very difficult
circumstances.”
At the time, the court-appointed trustee in
the bankruptcy case filed an objection, writing that while the current owners
argued for “shared sacrifice,” they “fail to understand what the concept means
when it comes to compensating their management,” and then added, “now is not
the time for yet another round of bonuses.”
Other proposed bonuses on the table for 2010
could bring the figure for management pay enhancements to more than $100 million,
and those bonuses are heavily weighted to top management. (Earlier this week,
management announced that beginning in 2011, it would
begin awarding merit raises to nonunion employees of about 3 percent.)
“You have advertising wrapping around sections
and being disguised as news and empty desks all around you, and then you read
about these ridiculous bonuses and feathering their nests with severances, you
want to scream,” said Steve Lopez, a longtime columnist at The Los Angeles
Times.
The creditors, which also include JPMorgan Chase and the Deutsche Bank Trust Company, have acquiesced to the
lucrative bonuses in part because they fear that antagonizing management could
further hold up the company’s emergence from bankruptcy, according to two
lawyers representing creditors who did not want to be quoted publicly during
bankruptcy negotiations.
“No one is in charge there,” said an adviser
to one of the senior creditors, who declined to speak on the record because it
was not in his business interest to be in conflict with the current board or
management.
Mr. Michaels suggested in public statements
that his current team was very much in charge. According to the company’s monthly
statements, cash flow is
on the rise and the company has $1.6 billion in cash on hand, about half of it
from the sale of the Cubs, which Mr. Zell eventually managed to sell.
“We are just getting started,” he said in the announcement.
And management still is confident that the new
thinking has Tribune on the right track. The company recently announced the
creation of a new local
news format in which there would be no on-air anchors and few live reports. The
newscasts will rely on narration over a stream of clips, a Web-centric approach
that has the added benefit of requiring fewer bodies to produce.
“The TV revolution is upon us — and the new Tribune Company is
leading the resistance,” the announcement read. And judging from the job
posting for “anti-establishment producer/editors,” the company has some very
strong ideas about who those revolutionaries should be: “Don’t sell us on your
solid newsroom experience. We don’t care. Or your
exclusive, breaking news coverage. We’ll pass.”
The Tribune Company is a
for-profit business. It is not a
monument to nostalgia. Never was.
Sydney Ember
contributed research.
comments by Don
Russ