Tribune: Zell Talks; Burkle And Broad Plot; Debt Looms

Sam Zell, who hopes to be chairman of the Tribune Company by the end of the year, reads five daily newspapers and various business mags but doesn’t go online for news. (He also doesn’t own a Blackberry, which could be a point in his favor.) Zell knows the internet is integral to this latest endeavor, though — and, more important, he knows that he’s not the expert on how to make that work. At least, that’s what I get from reading the edited transcript of a long post-announcement interview Zell did with four journalists from the hometown Chicago Tribune. He started with a little chain yanking by joking about parking his motorcycle in the former office of Col. Robert R. McCormick but spent most of the session explaining how the deal came about, suggesting he’d have the answers many of the pressing questions within a few months, and trying to assuage concerns about his impact on the company’s journalism. He actually had very little to say about the digital plans. Some highlights:
— Current management hasn’t been able to focus on running a good company because of shareholder issues ie the Chandlers. He would give them a chance to succeed without that pressure.
— Eli Broad burned a bridge with him by suggesting being partners one day and then, after Zell said they could talk when the deal was done, sending a letter to the board with Ron Burkle. “If someone calls me one day and says I want to be your partner and then the next day tries to stick a knife in my back, tell me again why I would want to do business with him?”
— “We thought, just as Mark Twain said, ‘stories of my death are greatly exaggerated,’ we felt the same way about the newspaper business. People were beating it up and predicting its demise. And we didn’t see it that way. We thought there was a lot of future in the newspaper business.”
— “Our goal in the near term is to listen to everything that’s going on. And hopefully reach some conclusions and then match them up with our own opinions.”
— Zell said he was aware of discussions about shifting resources online but that “it is a little early for me to opine on it.”
— “I guess what I would say is that I really think that the board believed that bringing in some outside influence to this company was a definite positive. That taking it private and off the roller coaster was beneficial to the company.”

Tribune will take on more debt: One word that didn’t pop up in a search of the transcript: debt. The WSJ dissects that issue based on its own interview with Zell and a batch of concerned analysts. The transaction will leave the company with more than $12 billion in debt — more than 10 times annual cash flow.

Zell rivals still at work: Meanwhile, the low breakup fee of $25 million keeps the company in play. Broad and Burkle are considering another bid and others, including David Geffen are looking at various assets. The NYT rounds up the usual suspects while the LAT explains a complicated way that Geffen could wind up as its owner and why servicing the debt might keep that from happening.