It depends on what you call the ‘Zell acolytes.’ If you are talking about Randy Michaels, he’s clearly gone, and Nills Larsen, who was running the broadcast side, he’s gone, but he did a fairly decent job there. Some of the existing Tribune people who were put into positions by Zell, like Gerould Kern, the editor of the Tribune, are still there, but they aren’t really his acolytes.
Do you feel that Tribune overall has changed course for the better since you left the company?
No, I don’t think they have. When Sam Zell bought the Tribune company, he had the best collection of newspapers in the country, and then they began dismantling that. Today you can’t say it’s the best collection of papers. Even though the company recently emerged from bankruptcy and ditched much of its debt, it had nonetheless suffered a severe loss of revenue and is a company with diminished assets, including its newspapers. Cash flows are off steeply, too, as are profits.
A lot of the reviewers of The Deal From Hell pointed out that even though you rightfully center on the problems with the executives at Tribune, even companies owned by strong families with a commitment to journalism—The Washington Post, The New York Times—also made substantial cutbacks to their editorial staffs. Are the troubles you pinpointed at Tribune unique or part of a wider industry problem?
First of all, I did not say you didn’t have to cut. My argument was, if you’re going to cut, you have to reinvest the money in a way that would generate revenue. At Tribune, what they were doing is that they would pass the savings back to Chicago, and then that would be used to bolster their earnings. Other companies did this. The Washington Post diversified their revenue base with Kaplan, and while that’s having it’s challenges now, that revenue probably saved them.
If you were in charge of Tribune now, given the situation with the spinoff, and the assets they put there, what steps would you take to ensure the continued viability of the papers?
I can’t say there’s one solution for all of them. I believe that the future of the newspapers is in becoming content companies. The fundamental value of a news organization is the ability to generate content, and the companies that win and survive are going to be those that invest in their ability to provide content. Tribune, however, has disinvested in content, by cutting the editorial staffs. Looking forward, I think each market you have to look at individually. in LA, I would look at making the Times a state newspaper. By covering California aggressively, you’re in effect a national newspaper, because California is bigger than most nations. If I were in Chicago and Florida, I would do the same thing and make it regional. if I were in some of these smaller markets, like Hartford, you then want to look at if I can create an online operation with a weekly magazine, and evolve into that over the next five to seven years, because printing the paper is the real cost, and papers often have limited other options for savings. As you saw in New Orleans when that happens, it can blow up in your face too if you don’t handle it right.