For reporting that is an embarrassment to the profession
of journalism, and for being beholden to corporate paymasters rather than
the citizens of America.
Usually we give a Media PUTZ to someone on the air, over the airwaves, in
print, or online who compromises the integrity of the media. Well, this week's
winner doesn't write, edit, or speak his way into the media world, but has
clearly made his own stamp in a very short period of time.
Sam Zell is the owner of the Tribune Company, completing
a leveraged buyout in April 2007. His previous media experience was when his Chillmark
fund owned the radio broadcast group Jacor Communications, Inc. between 1992-1999.
But what Zell has done to the media properties within the Tribune Company
is why we honor him this week.
Slashing budgets, pages, and workers. Bringing in clueless radio people
who didn't know the first thing about print. Consolidating Washington bureaus,
diluting local coverage.
On December 20, 2007, Zell took the company private, and the following day,
became the Chairman and CEO. On December 8, 2008, the Tribune Company declared
bankruptcy.
As for the financial mess Zell created, let's hear
from Harold Meyerson of The Washington Post:
Last year, when he purchased the Tribune Company, which filed for bankruptcy
today, he put up $315 million of his own money and paid the balance of
the purchase price, $8.2 billion, with the employee stock ownership plan – a
move in which Tribune employees had no say whatever. But that actually
overstates the amount of Zell's investment. Of the $315 million he
sunk into the company, it turns out that $225 million was simply a promissory
note. Due
to the vagaries of bankruptcy law, writes business analyst Mark Lacter
on laobserved.com, that means that Zell has better protection for his stake
than all his employees. Trib's ESOP holds 100 percent of the company
common equity – and it's the holders of common stock who usually
take a bath, or get wiped out altogether, in the debt restructuring that
goes on under Chapter 11.
So Zell has worked very hard to slash the integrity of the newspapers in
an industry that is struggling to not become another Wreck of the Edmund
Fitzgerald. And he somehow escapes on a lifeboat, drowning the employees.
Yes, the company Zell bought had its troubles stemming from tax problems
surrounding the Tribune Company's purchase of the Times Mirror Company (e.g.,
Los Angeles Times) in 2000. And there were potential conflicts with ownership
of both newspapers and TV stations in New York, Los Angeles, and Hartford,
CT (The Chicago media properties was grandfathered but the Zell purchase
has possibly put that in danger).
But what Zell did to those papers in a very short while far exceeded any
damage from the tax issues of the acquisition over seven years.
Then we have the allegations from the Rod Blagojevich criminal charges.
According to the transcript
released by the Justice Department:
ROD BLAGOJEVICH asked HARRIS about the Tribune issue. HARRIS said that
he met with Tribune Financial Advisor the prior day (November 10, 2008),
and
that Tribune Financial Advisor talked to Tribune Owner and Tribune Owner "got
the message and is very sensitive to the issue." HARRIS stated that
according to Tribune Financial Advisor, there will be "certain corporate
reorganizations and budget cuts coming and, reading between the lines,
he's going after that section."...
HARRIS stated, "I had singled out McCormick as somebody who was the
most biased and unfair." ROD BLAGOJEVICH responded, "to [Tribune
Financial Advisor] you did?" HARRIS confirmed that it was to Tribune
Financial Advisor. ROD BLAGOJEVICH stated "that would be great," and
McCormick is a "bad guy." ROD BLAGOJEVICH asked, "[Tribune
Financial Advisor] is on top of this, right?" HARRIS replied that Tribune
Financial Advisor said they would be "downsizing that division or changing
personnel" and that Tribune Financial Advisor understands and "[Tribune
Owner]" understands.
Those in the newsroom of the Chicago Tribune have flatly denied any requests
from Zell. But is that because a potential
plot fell through due to the exposure of the conversations?
In less than a year's time, Sam Zell has taken a giant media empire, and
reduced its efforts, short-term and long-term, to survive in an ever-changing
media world. And if the allegations in the criminal charges against Illinois
Governor Rod Blagojevich are true, he was willing to get rid of journalists
under governmental pressure in order to get a better shake on a financial
deal. For all of this, we gladly give Sam Zell the Media PUTZ of the Week
award.
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