Times' owner casts its lot with real estate magnate
Sam Zell's plan to buy Tribune Co. would put one of the nation's largest public media companies into the hands of a maverick investor with little experience in the business but a belief that there's still money to be made in newspapers and television.
The $8.2-billion deal would give the Chicago real estate magnate virtual control of the Los Angeles Times, KTLA-TV Channel 5, the Chicago Tribune, cable TV network Superstation WGN and about 30 other daily papers and TV stations. Perhaps the biggest surprise in Chicago, the company's hometown, was the news that the beloved Chicago Cubs would be sold at the end of the baseball season that started Sunday.
The Tribune deal faces obstacles, the biggest of which could be winning regulatory approval from the Federal Communications Commission. The FCC might force Zell to sell newspapers or television stations in some markets, including Los Angeles, because of federal rules preventing a concentration of ownership in any one location.
The 159-year-old Tribune also left the door open to new offers by setting a penalty payment of only $25 million in the event that the company kills the deal with Zell -- compared with the hundreds of millions of dollars that typically must be paid when backing out of such agreements.
It remains possible that pieces of the company could be sold, although Zell initially said he planned to keep the company intact. Los Angeles entertainment tycoon David Geffen said he maintained a keen interest in acquiring The Times.
"I think there is an opportunity for Tribune Co. of Chicago to maximize shareholder value," said Geffen, whose $2-billion offer for the paper was rejected last year.
Tribune Chief Executive Dennis J. FitzSimons appeared relaxed and upbeat when he met Monday with an auditorium full of employees at the company's landmark Tribune Tower. Tired after a six-month auction that ended late Sunday night, he nonetheless smiled broadly.
FitzSimons remarked on Zell's business acumen but added that he wasn't sure that the Tribune board knew exactly what the investor had planned. "I don't know if we heard Sam Zell's vision for the company," FitzSimons said.
Zell had left his sprawling weekend home on Broad Beach in Malibu late Sunday to return to Chicago. He declined interview requests but released a statement.
- Tribune's Zell outraged by Times workers' lawsuit Sep 18, 2008
- Zell's past may hint at plan for Tribune Mar 12, 2007
- Tribune said to still favor Zell's buyout bid Mar 31, 2007
