Posts Tagged ‘Sam Zell’

2012 is not shaping up to be a great year for San Diego journalism. First, Prop 8 backer Douglas Manchester bought the San Diego Union-Tribune–and immediately vowed to make it a “cheerleader” for the city of San Diego. Instead of say, a check on powerful interests that run the city. Only a short time after, Voice of San Diego announced it was laying off three of its best investigative reporters due to fundraising problems.

We’re not the only ones who see potential problems on the horizon. An editorial in this week’s San Diego CityBeat laments the current state of the city’s media.

When Voice first launched, we worried that its funding would lose steam as donor fatigue set in and the novelty wore off. But it has grown, and the nonprofit’s been able to add reporters and features even as for-profit news organizations have shrunk. Fueled largely by top-notch reporting on City Hall and education and some impactful investigations into San Diego’s redevelopment agencies, Voice gave a moribund San Diego Union-Tribune a kick in the pants a few years back. Under new leadership starting in 2009, the U-T responded by stepping up its investgative reporting and seems to be moving with a new purpose.

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With all the powerful interests elbowing over every dollar in the Tribune Company bankruptcy case, the one guy we were sure wasn’t going to get a dime back was Sam Zell–given that his leveraged buyout of Tribune is almost universally acknowledged to be the cause of the company’s collapse. I mean, is there a single human being out there, other than Zell, who believes the real estate magnate is entitled to anything?

Well, apparently there is–and that human being is bankruptcy judge Kevin Carey.

From the Chicago Tribune:

In a long-awaited opinion delivered Oct. 31, Carey surprised everyone involved in the case by saying that holders of a deeply subordinated class of notes known as PHONES were being treated unfairly and should be able to recover at least a slice of a claim with an original value of more than $1 billion.

Carey didn’t mention Zell’s $225 million claim, which stems from his failed 2007 leveraged buyout of Tribune Co., but sources said the judge’s logic regarding PHONES provides an opening for Zell’s lawyers to argue that he, too, should be eligible to collect a partial return because the two securities share similar legal language.

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A group of former LA Times employees has settled their lawsuit with GreatBanc Trust, the trustee for Tribune Company’s employee stock ownership plan, for $32 million. The employees alleged that Sam Zell‘s leveraged buyout and subsequent bankruptcy of the Tribune Company defrauded employees, who had gained an ownership stake in the company through its employee stock ownership plan. As is par for the course when big companies commit some kind of wrongdoing these days, GreatBanc and Tribune Co. admitted no wrong doing as part of the settlement.

The suit was brought largely through the impetus of former LA Times auto columnist Dan Neil, who now works for the Wall Street Journal. “Whatever money comes to the members of the class isn’t much cash, but at least it was acknowledgment that they were wronged,” Neil told the Times. “This was a horrible deal for the employees of Tribune.”

About 13,000 current and former employees will split the settlement, minus about $8 million in attorney’s fees.

For the past eight summers, Will Weinstein, a retired investment banker and teacher at San Francisco State University, has skipped across the Pacific Ocean to run a post-graduate summer course at the University of Hawaii, Mãnoa’s law school, titled “Ethics and Integrity in the Real World.”

This Thursday, he will close out an impressive 2011 roster of class speakers with none other than Sam Zell, for a conversation entitled “The Ethical Boundaries of Entrepreneurial Behavior.” Coming on the heels of last week’s LA Times cuts, Zell should be glad this talk is not happening at USC or UCLA. From the conversation series blurb:

Zell’s investments span industries and continents, and include interests in real estate, energy, logistics, transportation, media, and health care. He is recognized as a founding father of today’s public real estate industry after creating three of the largest real estate investment trusts (REITs) in history.

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The staffers laid off from the LA Times last week weren’t the only ones losing their jobs. Some, like Randy Hagihara, director of the metro & summer internship program, took voluntary buyouts. Freelance budgets were slashed in multiple sections, meaning less work for struggling freelancers. We heard from Avital Binshtock, a regular contributor to the travel section, that her Tours & Cruises and Calendar columns were being killed. And we’ve spoken to other LA Times freelance contributors who are uncertain of their future with the paper and are, at this point, just keeping their fingers crossed.

Just when we thought we couldn’t hate Sam Zell any more than we already do.

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The official clock-punch time for those affected by the latest round of LA Times layoffs is midnight, tonight. As first reported by FishbowlLA, one of those who got thrown under the Sam Zell bus this time around was media columnist Tim Rutten (pictured).

Rutten spoke with KPCC-FM 89.3 morning host Madeleine Brand about the end of a very long downtown LA run. There have already been a number of eloquent farewell emails from similarly affected colleagues. Rutten tells Brand he knew he was on shaky ground:

“Whatever the merits of your work, to be older and to be collecting a relatively large paycheck was to have a kind of target on your back,” he says, admitting that he was surprised but not shocked by the news…

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Tribune Company announced some major consolidations in its publishing division today. Four major publishing jobs were just axed– executive vice president of Tribune Publishing Bob Gremillion, senior vice president of financial operations Harry Amsden, senior vice president of publishing strategy Naomi Sachs and Mike Gart, chief financial officer of Tribune Media Services–and were put in the hands of the Chicago Tribune Media Group’s publisher and chief executive–now Tribune Co. publishing division CEO–Tony Hunter.

Hunter’s new responsibilities will include manning the print and digital operations of the Sun Sentinel, Orlando Sentinel, Baltimore Sun, Hartford Courant, The Morning Call and the Daily Press in Virginia. Noticeably absent from the centralized operation is the LA Times, which will remain under the control of president and chief operating officer Kathy Thomson.

This led the Wall Street Journal to wonder whether the Times is being shopped around.

Tribune put most of its major dailies under one umbrella, and conspicuously left the Los Angeles Times as its own entity with a separate executive overseer.

If Tribune wanted to sell the Los Angeles Times — and suitors have circled the newspaper in the past — the company may have created a perfect structure in which to do so.

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Internet killed the newspaper, you say? Ha! More like leveraged debt and corporate greed. Get this, courtesy of the Wall Street Journal. As of last month Tribune Company has spent over $150 million dealing with its bankruptcy proceedings–stemming from Sam Zell‘s supremely leveraged buyout of the company in 2007.

The lawyers, advisers and bankers working on the media giant’s case were paid $10.24 million in fees and expenses from March 28 to April 24, bringing Tribune’s total bill since its 2008 filing to $157.65 million, according to papers filed this week with the U.S. Bankruptcy Court in Wilmington, Del.

More proof that Reaganonmics is the most destructive force in media.

And yet despite all its up against, the LA Times continues to rebound. Just imagine what the paper would be like if human beings owned it.

Eddy Hartenstein, publisher of the Los Angeles Times Media Group, has been promoted to head honcho of the Tribune Company. His official title is Company President and Chief Executive Officer.

Oddly enough, Hartenstein will also keep his current job as LA Times publisher. And he’ll continue to live in Los Angeles, even though the Tribune Co. is headquartered in Chicago.

From the LA Times announcement:

“The board feels strongly that it is in Tribune’s best interest to have one person providing strategic vision and day-to-day direction for the company and its employees as we prepare to emerge from the Chapter 11 process,” said Sam Zell, Tribune’s chairman.

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After more than two years of backroom negotiations, the Tribune Company bankruptcy case finally got underway in court yesterday. Bankruptcy judge Kevin Carey is now faced with choosing between two rival plans. One, backed by the Tribune Company, would essentially shift the company’s debt, and assets, into the hands of lenders like JPMorgan Chase. The other, backed by Aurelius Capital Management, would take a more aggressive stance toward getting funds from those who pushed Tribune Company‘s leveraged buyout–namely Sam Zell. (Zell isn’t a fan of either plan, apparently, because both leave the option open to sue him and his company Equity Group Investments.)

However, during yesterday’s opening statements, Carey let everyone know that after two years of negotiations, he still retained the option to reject both plans.

“What then?” he asked rhetorically, not allowing either side a response.

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