All the Pate children remember the long days of their youth, writing stories, running the printing press or selling newspapers for the Madill Record in Oklahoma.
The tiny weekly was a pillar of the community in Madill, an oil-and-ag town of 3,400, so respected that two generations of Pates landed in the Oklahoma Press Hall of Fame. A 1990 plane crash killed the last Pate to publish the Record, effectively ending the family's local newspaper legacy.
Now Bill Pate, the youngest member of the third generation, is on the verge of returning to the newspaper business, and in a big way. He was a key player as the Chicago firm led by billionaire Sam Zell planned to take Tribune Co. private in an $8.2-billion deal.
On Wednesday, Zell joined the board of Tribune, owner of the Los Angeles Times and the third-biggest U.S. newspaper chain by circulation. Pate is expected to join later this year.
Pate, Zell and their colleagues at Equity Group Investments have been surprised by the attention the planned transaction has generated, considering that Equity Group has completed deals worth a whole lot more. On the other hand, none of those involved marquee holdings like The Times, the Chicago Tribune and the Chicago Cubs.
"This is a risky deal," Pate said last week. "If we stumble on this investment, this will mark Sam's career."
Much of the risk will be in the $8.4 billion in fresh debt that will be heaped on Tribune when newspaper advertising revenue is shrinking. Pate, Equity's chief investment officer, said he thought the company could carry that load if all else went well.
"The bigger concern is finding ways to grow the top line," he said. "We have to find more revenue."
In meetings at The Times' offices last week, Pate predicted the new leadership would be less formal, skeptical of using staff reductions to increase profit and aggressive about finding ways to extract money from Internet portals that rely heavily on newspaper content.
Equity Group's confidence in the future of newspapers bucks conventional wisdom, Pate acknowledged. The 43-year-old executive thinks the challenges confronting papers, though real, have been exaggerated.
"Newspapers have been popular and profitable for quite some time," he said, "and we think they will continue to be for quite some time."
Given his roots, Pate's belief in the business might come as no surprise.
