What to Make of Zell's Purchase of Tribune Co.?
The Tribune Company has announced that its holdings will be sold off to Chicago real estate tycoon Sam Zell. This is the latestthough hardly the lastchapter in the saga of the Tribune Co., whose attempts to use a "convergence media" model to create editorial "synergy" between its newspapers and TV stations perfectly illustrates the pitfalls of placing profits before reporting. As Eric Klinenberg writes in his article on the sad state of the American newspaper in our current issue, Tribune's "cut and gut" approach has been a disaster, particularly for the once-proud Los Angeles Times, which has been bled dry since being picked up by Trib in 2000.
The company's impending sale made some Angelenos hopeful that a white knight such as David Geffen would buy the paper and save the day. But for now, Zell's the man to watch. He has no experience running a media company, which is a good or a bad thing, depending on whom you talk to. One Tribune Co. critic tells the LAT that "Sam Zell is a hands-off guy, so he will pick good people to run this paper and let them run it. The fact that he is a hands-off, strong player bodes well for journalistic integrity." But as others have observed, Zell has a prickly relationship with the media, including his hometown Chicago Tribune. As Dean Starkman observes over at CJR Daily, Zell's company, Equity Office Properties (EOP), was "famously thin-skinned" when it came to the press. And, he reminds readers, "as the going got tough, EOP resorted to a strategy that will sound familiar to newspaper employees: cost cutting." As Klinenberg writes, once you start to see journalism as just another profit center rather than a public service, you start undermining the very product at the heart of your business. You can't cut finanical corners without hurting editorial quality. We'll soon see if Zell has learned that lesson by watching his new company's past performance.