*TOP 10. Number the stories. Give them a "handle" "In tonight's Top Ten: #1 Obama announces he's a Muslim; #2 Pirates sink US Sub; #3 etc......

Good thinking!

*CASUAL STYLE: What with the suits and ties? I'm not suggesting sloppy...but business casual...maybe even eccentric as the Crime expert could be in a Columbo styled rumpled sweater.

Excellent advice!

*CRIME CENTER. It's simple...we have a Weather Center and a Traffic Center, why not a crime center with a dedicated crime expert.

Simple but brilliant!

*QUALITY: All of this tied together with a level of seriousness instead of trying to be funny and cute. I'm thinking a 60 Minutes vibe.

Haha why not? And finally:

Are the above points valid? I don't know, but that's not the point.

Yes sir! [Daily Pulp via Romenesko; pic via]

SAM: I haven't figured out how to cash in a Pulitzer Prize. There was a day when a newspaper put "Winner of Pulitzer Prize" on the front page, and people flocked to read the Pulitzer Prize story. Unfortunately, I'm not sure that that's the case today But I also think that there are scale issues. In other words, I think that if the goal is a Pulitzer, it's in the wrong place. In other words, we're not in the business of, in effect, underwriting writers for the future. We're a business that, in effect, has a bottom line. So as far as we're concerned, I think Pulitzers are terrific, but Pulitzers should be the cream on the top of the coffee. They shouldn't be the grounds. And I think there are a lot of scenarios in the newspaper industry where the entire focus is on Pulitzers. The entire focus is on becoming an international correspondent. I mean, I know that because our newspaper sent somebody to Kabul to cover the "Afghan Idol Show." Now, I know Idol is the No. 1 TV program in the world, but do my readers really want a firsthand report on what this broad looked like who won the "Afghan Idol" Show"? Is that news?

Haha, not sure what that "broad" bit was about, but otherwise, Sam, you are correct! This is just like the final season of The Wire, where the asshole editor chases Pulitzers at the expense of real local news. And you know everything on The Wire is gospel! Perhaps NYT boss Pinch Sulzberger should take Zell's advice, too:

As of last night, the entire market cap of the New York Times [Co.] was $1.2 billion. And my question to Arthur, who I think is out here someplace, is if you want to be a charitable trust, be a charitable trust. If you don't want to be a charitable trust, then you've got to focus on producing a return for investors' capital, and it's just that simple. It worked in the old days because you could be a public trust and you could do well for your shareholders because you had a monopoly, and monopolies are wonderful. I mean, I think competition is terrific, particularly for all those guys out there. Me? I like monopolies. I'm just sorry I waited 60 years to get into the newspaper industry because the 40 I missed were great.

Well by god, this gnomish asshole CEO of a debt-ridden company just summed things up once and for all. Listen to him, Pinch. (Although you may also want to note that the reason papers like the LA Times can't afford to do Pulitzer-bait investigative stories any more is because Zell has cut staff to the bone.) [Portfolio]

[The ridiculous postscript to this interview: as soon as Lipman went to the audience for questions, in came Jeff Jarvis (or is it Jim? Always get them confused) to complain about online persecution of himself. Read this, then consider this:

Hi, Jim [sic] Jarvis. Mr. Zell, first, I may speak for others here when I say I wish you would do this more often and talk publicly more often. It's great fun. I'm a journalist, and I got attacked in Salon this morning…or Slate this morning—I get them confused—for holding journalists responsible for the fate of journalists.

Meh.]

See, they figure it like this: LAT is owned by Tribune, which is $14.7 billion in debt, and the incoming Obama administration is gonna have $500 billion of government bailout funds to dole out, and $14.7 billion is "a very small proportion" of $500 billion (this is actually included in the reasoning) and if you keep Hussein Obama happy now then, hey, who's to say he won't give Tribune Co. $14.7 billion when he gets on the inside? Read the signs, people, they're all around you. The Corner also points out:

Item: The Tribune Co. is based in Chicago.

No need to say any more. They're always listening. [The Corner; pic via]

And now, Lee Abrams' suggestions to the South Florida Sun-Sentinel:

Sex: SEX AND RELIGION ARE THE TWO MOST IMPORTANT TOPICS ION THE

WORLD! A weekly theme of Sex/relationships. Monday Gay Florida Tuesday Does E-Harmony work? Weds Teens & Sex exposed... etc...

Religion: Monday: Can Jews and Muslims co exist; Tuesday The religious ultra right; Wednesday Catholics in America.... etc...

We practice this theory daily.

*STAR EVERYTHING. Are you a "listing service" or experts? Listing events for Kids? Star them. So Mom can say "Oh—The Sentinel gives the science fair three stars, lets take the kids". Give events and places a 'reason'...be the expert not just the lister. Same goes for restaurants of course, and well, just about everything you 'list'.

"Insurgents Retake Southern Areas Of Fallujah (TWO STARS!)"

*WORDING. At the Sentinel there was a story about exotic Asian restaurants, and the reefer was "Learn about Tasty Treats". Tasty Treats??? OK for Campbell's in 1955 or for a candy article, but other than that, it's old world newspaperspeak!

Heh, "reefer." But how about some new stories, Lee—things our readers haven't heard before?

*SCAM PATROL. Identity theft...Infomercials that are questionable...Nigerian 419 scams...they're everywhere. We need to inform and BUST these 21st century menaces. It's REAL...It's NOW.

*POKER. I know the Sun Sentinel does this. It's HOT. Poker is the 21st Century Bridge.

Why do we love you so, Lee Abrams?

Wanna reach more 30-40? Well, start ATTACKING WITH ANTI A.D.D. NOTICABILITY.

[Daily Pulp via Romenesko]

I think [a 'government bailout' of newspapers—Ed. note: probably not an imminent threat!]is a terrible idea. What would happen is newspapers would then focus on this ultra-elite point-five-percent and create these papers that are just unreachable to a mass audience...I think for government to come in and force this intellectual thing would be terrible. It'd almost be like in 1950, with rock-n-roll coming, all the sudden the government comes in to support classical music.

Tribune is already taking steps to ensure that its papers don't appeal to the ultra-elites. [via Mixed Media]

*Complaint Magnification. .1% stops is insignificant. I think if we got 20,000 complaints, that too would be insignificant. To succeed and grow, we have to become 21st Century mass appeal, and part of that will generate complaints from the fringes.
ersationally, as opposed to a "commercial".

Okay!

*I see more people reading the Tribune than ever. Metra trains are a sea of Tribunes compared to a month ago.

Mmm hmm!

I used to write a blog and someone sent me one that I wrote about newspapers last year and wondered if I still felt the same way. I do.
Which is why we hope to uncover myths, fallacies, assumptions and other sacred components that need to be brought to the table for uncomprimed discussion.

Ah ha!

I really think New Media needs some Old thinking to put soulfulness and magic into their mix, while Old media needs spectacular denial free new ideas to cut through the ever growing clutter. Denial is the key word. The Old Media guys tend to be so engrained in the way it's always worked...new media guys often reject some of the old values that may be unfashionable in the board room, but enlighten and satisfy consumers. Hotels are like that. Some "modern hotels" lack character. Some old hotels, are...old and ratty. But the Old Hotel with all the modern conveniences and charm...or the new hotel that has character and vibe—-that's the magic combination. Old Media integrating new ideas...or new media integrating (the good) old ideas—-That's the plan.

Old thinking into New Media...and New thinking into old media.

Zorp! [via Romenesko]

From an Atlantic interview with Abrams via LAObserved:

Abrams: I was in Los Angeles, sitting in this casual little meeting waiting for someone to show up, and there was this lady who had just got back from four years in Iraq, I forgot her name, I met 300 people in two days, and she was telling me about security problems, bullets in the background and all that, and it really struck me that there should be pictures of her with Iraqi children in the newspaper to show she was there. Whereas in the newspaper, it just says, “Times Staff Reporter.” I really never thought about it, that there was really a person over there going through hell to get this.

[Atlantic]: It didn’t strike you that there were employees of the newspaper over there doing this work?

Abrams: It was just ink to me, just reading. Oh yeah, here’s what’s happening in Iraq, but then I didn’t feel the human side

.

According to multiple sources at the Times, new publisher Eddy Hartenstein has been calling it "treason" for employees to share information with LA Observed...

And yet, solid sources have let me know that current Times leadership is unhappy enough (or paranoid enough) about stuff getting out to consider action against staffers.

Yes, they can sue all the employees that aren't already suing them! It's just common sense, people. As Lee Abrams said, "Are these amazing ideas? Not really." [LAO]

See that, employees? He spent all his money hiring The Eagles, so take your lawsuit and go to hell. [via Philly City Paper]

The Chicago Tribune just unveiled a redesign, which seems like a good occasion for a big old memo from Lee Abrams. High five! All ellipses are in the original text, people:

Well, there were roadblocks. But those were removed, and the New Chicago Tribune is more than a new version of the timeless Tribune, but it represents a completely new attitude in the newsroom, marketing floor . . . everywhere.

Everywhere.

There's a new flexibility and freedom to have so much belief on the brand, the city and the people that we can take chances . . . try things . . . have the attitude of re-invention locked into our genes so we can compete . . . and prevail without the shackles of sacred and tired old line thinking that is weighty enough top sink us all into the land of the obsolete. It's a whole new day . . . and attitude.

Something is happening here.

I thought Allentown did an good job with their re-invent . . . it wasn't really that WOW though, but it is clear that they are a model of daily re-invent as they are on fire with new ideas and angles. They're continually launching new features, upgrading existing ones and THINKING about the newspaper . . . an a 24/7 basis.

Right. Now here's where Abrams really starts to Blow. Your. Minds:

The Baltimore Sun did some very nice special sections . . . BUT—they were plastered with the line "SPECIAL ADVERTISING SECTION"OUCH! Why not just say "Don't read this because it's a bunch of ads and no credible content"I understand the importance of seperating these from the traditional news, that's fine, but how about another name??SPECIAL FEATUREA PUBLICATION OF (PUT PAPER HERE)etc. . . .

Shhh: no words.

"The lawsuit filed yesterday is filled with frivolous and unfounded allegations, and I hope every partner in this company is as outraged as I am at having to spend the time and money required to defend ourselves against it. The media industry is in crisis, the advertising environment is extremely difficult and the economy is in turmoil. The overwhelming majority of our employees have taken up the challenge — they are working hard, leading by example, and devoting themselves to re-inventing our businesses by developing new and innovative products for our readers, viewers and advertisers. As a company we are attacking our problems and revolutionizing the media industry.

"This lawsuit is a mere distraction, and we will work quickly to see that
it is dismissed. It will not deter us from completing the work ahead."

Tuesday, September 16, 2008

Los Angeles, CA-A class action complaint CV08-06040 was filed today against Samuel Zell, the Tribune Company, and others in U.S. District Court, Central District of California, by Joseph Cotchett and Philip Gregory of the law firm of Cotchett, Pitre & McCarthy on behalf of Dan Neil, Los Angeles Times Pulitzer Prize winning auto critic; Corie Brown, former Los Angeles Times wine and food writer; Henry Weinstein, founding faculty member of UC Irvine School of Law and former Los Angeles Times legal affairs writer; Myron Levin, former Los Angeles Times consumer affairs writer; Walter Roche Jr., former Los Angeles Times writer; and Jack Nelson former Los Angeles Times Washington, D.C. bureau chief on behalf of themselves and other members of a class consisting of current and former employees of the Tribune Company who have rights under the Tribune Employee Stock Option Plan (ESOP) or various Tribune retirement plans.

The complaint alleges that since completing his takeover of the Tribune Company in December 2007, Sam Zell's illegal and irresponsible actions and public statements have damaged the reputation and business of the company he purports to want to preserve. According to the filed complaint, through both the structure of his takeover and his subsequent conduct, Zell and his accessories have diminished the value of the employee-owned company to benefit himself and his fellow board members. It alleges further that through their destructive management and self-dealings at the expense of employees, Zell and his co-fiduciaries have repeatedly breached their fiduciary duties to beneficiaries of the Tribune Employee Stock Ownership Plan (ESOP).

Plaintiffs seek to recover all losses to the Tribune ESOP and the company caused by Defendants’ breaches of fiduciary duties. As well, Plaintiffs seek the removal of Defendants from their fiduciary positions and removal of the Tribune Board in its entirety for their ongoing dereliction of duties.

[via Romenesko]

• "If we can morph the Soul of Dylan ... with the innovation of Apple and the eccentric-all-the-way-to-the-bank of Bill Veeck, the WORLD will be a better place."
• "Lee Abrams...floated some provocative ideas for reviving Tribune's newspapers, including front pages primarily composed of colorful maps."
• "That is the MAGIC of newspapers...having the ability to BE the print arm of what a city IS...and aspires to be. Quite honestly, I don't think there's a paper in the Country that REALLY does this right....at least not in 2008 terms. It's not a swipe — it's an opportunity—A BIG one. BE the city...in 2008." [Punctuation by Abrams]
• "Complete and total domination. That's the idea. And...Funny thing, by re-igniting this 'natural' audience, lower demos will follow....but not by TRYING too hard to reach them. I call it cult and fringe. Cult is your natural reader aka core. For a RedEye it's young, a mainstream paper old. I think RedEye does a fantastic job with its cult. They are new and pure."
• "My read: There's ONE important way to sell the change—SHOW THE PAPER. Let people touch, see and live with it. The worst thing would be a marketing slogan "Now...Your New Daily Paper...more concise...more engaging". That will likely come off as marketing BS that no-one will buy into. You gotta SHOW people the actual NEW newspaper."
• "NOTICABLY growing our products (vs. salvaging them) will likely do that. GROWING is the key word."
• "if we sell the outstanding content and prsent it in a more intelligent manner, it'll speak volumes."
• "Q: Editorial-wise, is some of what has been done traditionally now irrelevant?
  A: NOT IRRELIVENT BUT SUPERSCEDED BY OTHER MEDIA WHO DO WHAT NEWSPAPERS ONCE 'OWNED' BETTER."
• "THE ONLINE ARCHIVES! These are amazing! Yet, a mystery...hidden."
• "Are these amazing ideas? Not really."

First people thought Zell would just sell the Tribune's tower, then lease it back and keep the paper there. But no!:

But hold on. Sources said Zell, who has hired Eastdil Secured LLC to market the tower and a parking lot abutting it, is thinking big. They said Zell wants nothing better than to turn over all of Tribune Tower to a residential developer. Such an owner could use it as a Gothic ornament for new construction on the parking lot.

Sad Tribune breakdown: Nobody wants the paper. Nobody even wants the paper's building. But that parking lot is nice!

[Sun-Times]

The blog, TellZell.com, got a sympathy writeup in the NYT this weekend. And while it has some fire in it, it's ultimately a sad relic of the once-mighty newspaper industry. A recent post, for example, contains a bunch of farewell letters from Tribune staffers:

Perhaps I hid behind the smallness of my cog's place in the big machine here, or the fact that I worked in what is perhaps the best photo journalism department in the nation kept me from feeling too worried, but with the loss of talent over the last year or two and the seeming lack of any vision in regard to the future of true journalism (other then to hold to the cliff's edge for as long as possible), I feel that I need to say something, however insignificant it may be.

I'll add to the chorus of goodbyes with an adios y un dicho de mi abuelita: "No hay un mal que por un bien no viene."

The Times literally changed my life. I came here as a musician who occasionally wrote and I'm leaving as a guy looking for work as a writer (not that I, the son of a composer, could ever stop being a musician). I'm proud of having contributed to this paper.

SAD. It really is a quality blog, if you're into that sort of thing. Unfortunately its only chance of impacting Sam Zell is... well, there's no chance.

[TellZell.com]

In '99, it was revealed that the paper's magazine had come up with a plan to share the revenue from a special (flattering) issue about the city's Staples Center with the Staples Center, in exchange for advertising help. Which, needless to say, was a breach of the storied Chinese wall between the editorial and business sides. There was a huge uproar! Some quotes from the time:

"Something this blatant, this bizarre, something that is just so compromising - this was a monumental error," said Stanford journalism professor William Woo...

"The whole tone is, "How can I believe what I read now?' " [Times columnist Patt] Morrison said. "That hurts. Reporters don't pass bar exams; we don't get board-certified like doctors. We're hanging our asses out there everyday. For all of us, this is 10 or 20 or 30 years of our lives put in jeopardy to add another 3 cents to somebody's dividends per share."

Will there be a huge public uproar this time around? No! Because everybody in the newspaper industry knows that their business model is dying. And while they might not like it, they'll grumble quietly, or just go ahead and retire. Because we're far past the days when complaining about jaw-dropping things like this would do any good.

The new radio guys at Tribune include:

• Randy Michaels, number two at Tribune
• Lee Abrams, Chief Innovation Officer, formerly of XM Satellite Radio, started last Tuesday
• Brought in over the past few days, all from radio powerhouse Clear Channel: Jerry Kerstin, Marc Chase, Steve Gable, Dean Compton

The Times reported for tomorrow's paper that Abrams' "long, rambling, excited" emails are scaring the crap out of everyone:

"If we can morph the Soul of Dylan ... with the innovation of Apple and the eccentric-all-the-way-to-the-bank of Bill Veeck, the WORLD will be a better place," he wrote in one missive.

How would Abrams improve Tribune's struggling newspaper? By composing "front pages primarily composed of colorful maps," according to the Journal.

He also wants to shake up meetings with a "'cliché buzzer,' to ring when colleagues offer tired ideas."

Abrams' boss, Michaels, is only slightly less insane. Keep in mind this man is second only to Sam Zell at Tribune. Said the Journal:

He once arrived at a radio broadcasters' conference carried on a litter and dressed in the garb of an Egyptian pharaoh to underscore in a speech how powerful consolidation would prove for radio.

Michaels is now installing pinball machines and a jukebox at Tribune corporate headquarters in Chicago. Because there's nothing like pinball when you have $12.8 billion in debt, deteriorating credit and are worried about missing payments.

There are different theories as to why Zell is bringing these radio guys in. One is that radio was once seen as a medium on the way to extinction, like newspapers are seen now, but was revived. Another is that he wants to emphasize the broadcast side of Tribune, which produces only about 25 percent of revenue but 50 percent of profit.

Times: Tough Guy in a Mean Business'

WSJ: Tribune Turns to Radio to Revive Empire

"I'm not disrespecting anybody. I'm trying to make everybody uncomfortable," Zell said. "This business has been eroding before your eyes and you're worried about my language? ... Everything I said was with an intent to get everybody to get off their [behinds] and understand this is a crisis. We've got to save this business. We've got to make this work. And we've got to prioritize what we get all pushed out of shape about. ... If we keep operating the way we've been operating, there is no future."

Sam Zell: Kicking [behinds] daily.

The arrival of an unrepentantly blunt owner has always caused mass garment-rending in newsrooms. When owner Mike Lacey introduced himself to Village Voice staffers, he told them to get ready to say goodbye to their friends. It didn't help that he reportedly did it with his cowboy boots propped up in their faces. People still talk about the time Lacey walked into the L.A. Reader and called everybody in the place a cocksucker. Philadelphia Inquirer publisher Brian Tierney's tirades at reporters are legendary, and media magnate Si Newhouse was no boy scout.

We're quite sure there are mild-mannered cuddly billionaires, but we haven't met them yet. Resurrecting a sprawling corporation stuck in a flawed and flagging industry involves unpopular decisions and requires some serious chutzpah. Tribune's probably too far gone to be righted no matter how much Sam Zell swears at it, but it's hard not to get a kick out of watching the little guy give it his boorish best. Besides, who hasn't wanted to call a media exec an overpaid motherfucker?

Tribune's fun-filled employee handbook is based on the manual [pdf] at current subsidiary Local TV LLC, from whence came Zell's new righthand man, Randy Michaels. (Who is maybe replacing Zell soon, but is definitely in big big trouble today for talking about it.)

• Now that you're working for Sam Zell, please do Question Authority. Just not Sam Zell's:
• Please "have fun and treat each other with respect." If you are Sam Zell, this proviso will be optional.
• Trib workers shouldn't worry their pretty little heads about employee classification—to make it easier for them, Tribune has cut that section in their version.
• At Tribune, the definition of harassment has been condensed a tad. Local TV's broader definition just didn't sit right with Sam Zell—no public invective-hurling at the employees allowed.

  LocalTV's definition:
  

  Tribune's take:
  

Neither of the handbooks encourages cruising porntastic websites at work, but Sam Zell took care of that horrific oversight during a visit today to the Los Angeles Times newsroom. "Let me know if you find any good sites," he told the staff.

Fellow Employees,

You may have heard me say that I will be taking an annual salary of 50 cents. Apparently, that figure was disturbing to some people. Someone on my team recently received an e-mail from an employee who was concerned that 50 cents does not divide evenly into 26 paychecks.

So, I’ve decided we should form a committee, hold a meeting, and then hire a compensation consultant to decide if my salary should be increased to 52 cents a year.

While I’m sure that falls under the cap for raises, it may be against some old policy restricting salary increases for employees with less than 12 months of tenure.

Do I need a committee, meeting and another consultant to change that policy?

Oh, that’s right, I’m in charge now. What policy?

More to come…

Sam

The journalist in the video asked where the paper's journalism was headed, and Zell said journalists needed to focus on what readers want, thus helping generate revenue to reinvest in the paper.

The journalist then followed up, saying readers want "puppy dogs" rather than real information. Zell took umbrage, delivering the eminently quotable line, "you're giving me the classic... journalistic arrogance of deciding that puppies don't count."

Zell dropped his F-bomb a few breaths later, at the very end of his answer.

The source added this tidbit:

The video was taken down for half the day Friday as the publisher, Kathy Waltz, debated on whether to edit out his little aside, but everyone in the newsroom had seen/heard about it by then. It went back up in its original, unedited form.

For the impatient, a 10 second "fuck you" shot from Zell:

The full 1:45 minute give-and-take between the journalist and Zell:

Previously: Zell Plasters "You Own This Place Now" Banners Over LA Times Office

His point is that our future is in our hands. It's not about the past, not about Chicago or the Chandlers or anybody else. It's about US in the Los Angeles Times Media Group family, and what we make of our mission and businesses in this amazing part of the world that is Southern California.

From: Hiller, David Sent: Thursday, January 03, 2008 10:43 AM Subject: Going for it in 2008 Good morning and happy new year.

I hope all of you had a happy holiday with family and friends. I was back in the wintry Midwest for the closing of the deal with Sam, and to spend a few days with my mom and other family there (thermometer didn't get much over 20 degrees!).

I hope you feel as good about Sam coming aboard as I do. He's a force of nature, and an injection of his kind of energy and confidence is a
great thing.

It was Sam's idea to put up the banners that say "You Own This Place Now." And that has been his steady theme. His point is that our future is in our hands. It's not about the past, not about Chicago or the Chandlers or anybody else. It's about US in the Los Angeles Times Media Group family, and what we make of our mission and businesses in this amazing part of the world that is Southern California.
I don't go too much for the usual New Year's resolutions practice, but this year I think it would be good to take to heart what Sam said in his first note to us on December 20 about how we act moving forward:
* We will take intelligent risks and reward innovation.
* We will tear down bureaucracy and reward entrepreneurial
spirit.
* We will compete fiercely, but with integrity.
* We will work hard and have fun.

These are good resolutions to live by. A number of you sent me emails over the holidays with suggestions and questions. There is also a Suggestion Box on TimesLink that many of you use. I welcome all these ideas, and will always answer an email and talk about some of the suggestions on my blog. And remember Sam has an email box too: talktoSam@Tribune.com.

I was glad to see many of you at our Town Hall meetings before the holidays. Our strategies and priorities we discussed are the ones we are telling Sam about. Near-term actions we will be talking more about in the next few weeks:

1. Completing 2007 year-end results
2. Finalizing budgets and action plans for 2008
3. Communicating 2008 compensation and benefit plans

We will also be planning our Employee Recognition Week activities later in February to fully recognize and celebrate accomplishments and contributions in the eventful year just passed.

I am looking forward to our coming year together.

David

[W]hen Cortés landed on the shores of the New World, he burned his ships so that his men would know that death was the only alternative to success. For the foot soldiers of American commerce — like the 20,000 Tribune employees who have been drafted into serving as Zell's co-investors — that remains true, at least in a financial sense. But American capitalism being what it is, there's always a comfortable way out for the guys at the top.

A change of hands for Tribune [LAT]

Well, it's got something to do with the complexities of the deal's structure as relates to the recent turmoil in the stock market, none of which we fully understand. These people probably do:

"The deal," says the Journal, "has faced doubters since it was finalized April 1 after a long, tortuous auction that brought forward little interest in a purchase of the newspaper and TV empire. Chicago real-estate magnate Sam Zell ended up striking a deal in which he makes a very limited financial commitment to support a buyout; he has agreed to invest $315 million. The centerpiece of the deal is an employee share-ownership plan that is taking on debt and can utilize tax breaks afforded ESOPs to make repayment easier."

But, the Times tells us, "A lot has changed since April 2, when Tribune and Sam Zell, the real estate billionaire, announced the complex takeover. What looked then like a moderate slump in stock prices in the newspaper industry has turned into something worse, with Tribune suffering more than most, and the credit markets the company will rely on to shoulder its debt having gone from easy to tight... since then, the trading price has sunk, at one point last Tuesday dipping below $25 — the lowest, adjusted for splits, in nine years. In deal-making circles, a small discount for uncertainty until a transaction closes is standard. But in this kind of situation, with Friday's closing share price of $25.67, it's another matter, a discount of nearly 25 percent."

What's the problem? "The main reason for the investor skepticism is the heavy debt load that Chicago-based Tribune would be carrying after it went private, plus the continuing decline in advertising revenue and cash flow from the company's TV stations and newspapers, including the Los Angeles Times," according to the Los Angeles Times.

What now? The NYT offers three possibilities. One, the deal goes through as planned, and Tribune takes on a assload more debt than initially planned. The second option assumes the deal fizzles out, leaving Tribune with heavy (but slightly less than the aforementioned assload) debt and none of the tax advantages that made the plan so attractive initially. The third choice? Zell renegotiates the deal. How would that fly?

"It'd take a shareholder vote to change the price, and all hell would break loose," a private equity executive tells the LAT, "but I'm betting all hell breaks loose."

Still, business reporting being what it is, you can always find optimists.

LAT: "More bullish observers said that Tribune still had the cash flow to cover its projected debt payments and could raise money by selling such attractive properties as its one-third stake in the Food Network, which some analysts have estimated is worth $1 billion."

So there you have it. The way it looks now, the only people who might really get screwed on the deal are Tribune employees. The deal relies on an "Employee Stock Ownership Plan, a type of benefit program that invests primarily in the employer company's stock. After the ESOP is formed here, it will buy the Tribune stock and become the sole owner of the Tribune Company; already, the company has halted contributions to most employees' retirement plans, money that will be used to help finance the ESOP." Should things go south, these are the people who are going to pay the price. Well, them and those of us who have to actually read about this stuff for a living.

Feel smarter now? Good!

]]> Gawker-291303 Mon, 20 Aug 2007 13:45:22 EDT abalk http://gawker.com/index.php?op=postcommentfeed&postId=291303&view=rss&microfeed=true

Katie Couric is trying to pretend that she knew her ratings at "CBS Evening News" would blow all along. [USA Today]

]]> Gawker-259302 Thu, 10 May 2007 10:30:32 EDT abalk2 http://gawker.com/index.php?op=postcommentfeed&postId=259302&view=rss&microfeed=true

Simon Dumenco gets letters, a few of which don't even refer to him as a muppet! [AdAge]

]]> Gawker-258180 Mon, 07 May 2007 10:36:36 EDT abalk2 http://gawker.com/index.php?op=postcommentfeed&postId=258180&view=rss&microfeed=true

Vogue publishing director Tom Florio claims Men's Vogue "launched" Barack Obama. Take that, David Axelrod! [WWD]

]]> Gawker-256352 Mon, 30 Apr 2007 10:00:29 EDT abalk2 http://gawker.com/index.php?op=postcommentfeed&postId=256352&view=rss&microfeed=true