You would think that the bankruptcy of the Tribune Company would be an indicator of a dying industry, newsprint. Most of the other major newspapers are dying as we speak as costs are rising and demand is shrinking. Advertisers are able to market in a more measurable way on the internet where the readers already are as opposed to newspapers where they used to be. And let’s just say classifieds are a lost cause.
But to hear those in the newsroom, the Tribune’s demise can be laid on the feet of one person, Sam Zell. Now when Zell purchased the Tribune we all knew it was a risk. He saw the vast real estate and business holdings in the company and knew there were assets there. What he did not expect was that the leverage of the credit market would be gone when it came time to refinance.
But critics argue that it was more than that — Zell himself, some say, is also largely to blame.
“We know that he was a real estate person and I think he’s demonstrated that in his short ownership of the Tribune Company,” said Bernie Lunzer, the president of the Newspaper Guild of the Communications Workers of America. “I just don’t think he really fully understands what he got into. … I think a lot of us predicted that the Tribune Company would get to this point.” via ABC News
To those reporters that Zell infuriated all I have to say is too bad. The road that you were on was one of failure. That was the only certainty. What Zell offered was a ray of hope by changing the culture quickly, you hated him. And that is understandable as he became the symbol of your world being torn apart.
But like the buggy whip makers, you are in a period of extreme and difficult change. Sam Zell was looking to capitalize during this period by buying a newspaper chain that was dying and releasing the underlying assets while hoping that he could find a way to save the rest of the business.
When the capital market fizzled, his chances to save the company went with it.
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Actually what really torpedoed the deal was Zell's leveraging the company to the hilt, which made it more difficult to take the time and money to properly invest in a robust multi-media Internet strategy. This is a great example of how someone successful in one industry — commercial real estate — won't necessarily strike gold in another (media).
Having written freelance for the L.A. Times and also the creator of a housing blog, I don't think blogs can EVER replace the depth and energy of a fully stocked newsroom, and to dismiss writing talent's complaints as "too bad" shows a very weak grasp of a much larger issue.
Blogger Andrew Sullivan has a great piece on the future of blogs and media here:
http://www.timesonline.co.uk/tol/comment/columnis…
I believe there will be many other major Newspapers following suit. Advertising in newspapers is dwindling and it will be very difficult to keep them profitable or even breaking even without increasing the price of a newspaper.