And he steered reporters to yegsz.com, an online display of the year-end gifts he hands out annually to hundreds of friends and associates. The gift for 2006 was a metallic music box dedicated to criticism of the Sarbanes-Oxley corporate disclosure rules, set to the tune of "Love & Marriage." ("Sarbanes-Oxley, Sarbanes-Oxley, but for businesses their act is toxic.")
Zell made these other points during the hourlong interview.
* He hopes to pay down within 10 years the more than $8.2 billion in debt Tribune will take on to go private. He believes the company's cash flow ($1.3 billion last year) will be adequate to cover debt payments, especially with the tax breaks it gains under its new structure. Nevertheless, cash flow will have to be monitored assiduously.
"I don't think you need the cash flow to go up," he said, "you need for it not to go down."
* He does not expect Federal Communications Commission regulations prohibiting cross-ownership of newspapers and broadcasting stations in the same communities to pose an obstacle because he expects those rules to disappear. Tribune has both a newspaper and a television station in each of five cities: Los Angeles; New York; Fort Lauderdale, Fla.; Hartford, Conn.; and Chicago.
* He believes the deal has been structured to align the interests of employees, who will be the company's primary owners through an employee stock ownership plan, with his own. "I'm putting $315 million in, and I don't get any back unless you [employees] make money."
He noted that senior executives have "in effect taken what would otherwise be bonus money and invested it in the deal." His reference was to a payout of 8% of the future company's equity that will be made to top executives starting four years after the acquisition closes.
A shareholder lawsuit filed Friday in Chicago alleges that Tribune management dismissed competing bids and did not get the best price.
* The breakup fee of $25 million, which Tribune would pay Zell if it accepted a higher offer before he completed his acquisition, was set at a low level at Zell's suggestion. He said he wanted to disavow any notion that his motive was to reap the fee without completing the deal. "I really get off on making 1 plus 1 equals 3. If I can make it 6, even better."
As for the prospects of a higher bid coming from other investors, "I can't spend any time worrying about that."
