The Chicago Tribune‘s ambitious new leaders have failed to bring the paper back from bankruptcy, the New York Times reports.
After billionaire Sam Zell became the Tribune Company’s controlling shareholder, he appointed former radio executive and disc jockey Randy Michaels to run the company’s properties, which include The Chicago Tribune, The Los Angeles Times, WGN America and The Chicago Cubs. The pair promises employees and shareholders that they would reinvent the media company.
But less than a year after Zell bought the company, the NYT reports, “it tipped into bankruptcy, listing $7.6 billion in assets against a debt of $13 billion, making it the largest bankruptcy in the history of the American media industry. More than 4,200 people have lost jobs since the purchase, while resources for the Tribune newspapers and television stations have been slashed.” Meanwhile, executives were paid out millions in bonuses, the NYT reports.
The NYT’s David Carr calls Zell a “a hard-charging real estate mogul with virtually no experience in the newspaper business” and the Tribune’s troubles a “classic example of financial hubris.” Carr writes that “a deal financed with heavy borrowing and followed with aggressive cost-cutting could succeed where the longtime Tribune executives [Zell] derided as bureaucrats had failed.”
“And while many media companies tried cost-cutting and new tactics in the last few years, Tribune was particularly aggressive in planning publicity stunts and in mixing advertising with editorial material. Those efforts alienated longtime employees and audiences in the communities its newspapers served.
“‘They threw out what Tribune had stood for, quality journalism and a real brand integrity, and in just a year, pushed it down into mud and bankruptcy,’ said Ken Doctor, a newspaper analyst with Outsell Inc., a consulting firm. ‘And it’s been wallowing there for the last 20 months with no end in sight.'”