Dear Sir or Madam: Your most important responsibility before you settle in as CEO is to make certain everyone knows you respect the institution, not just what its stately gothic tower represents, but also the mission of its embattled employees. It is likely that you are not from the world of news, but from the world of finance. I suspect your objective will be to make Tribune, once the gold standard for journalism in Chicago, a viable, respected company again.
A significant anniversary that nearly coincides with your arrival should not be allowed to pass without notice. Robert R. McCormick took control of the Chicago Tribune in 1911 after its owners had decided to shut it down as a lost cause. He would not allow that and spent much of his troubling, controversial life building a strong Chicago institution.
Your challenge is just as great as his was.
I most certainly believe that you can succeed. Of course, you know every business needs a central mission. Once that is identified, it knows what direction it should take, what objectives it should strive for, what behaviors it should reward, what measures it should apply to its own performance.
Your business is news.
But you are sitting now on top of a company that lost its way years before its troubles became apparent. It also faces perhaps decades of legal conflict over an array of disagreements among various creditors, employee groups, and former shareholders angered by the company’s ill-fated, debt-bloated restructuring. It would take pages just to list the plaintiffs.
Demonizing previous generations of executives serves no purpose. But in the interest of keeping you from repeating mistakes, a digression is in order for some important history about how such a promising enterprise fell into dire straits.
Technology brought such sweeping change to newspapering in the 1970s and 1980s that publishers found themselves delightfully awash in profits. When hot type yielded to offset printing, several layers of costs were squeezed out of a business that was already profitable. The IRS noticed and publishers, eager to protect their fortunes, were quick to sell their family-owned operations to an emerging array of newspaper chains—Tribune among them—rather than to pass huge tax liabilities to the next generation. It happened so quickly that within a decade or so, those chains controlled most of the nation’s newspapers, became media conglomerates, and were collecting capital in the public marketplace. That made newspapers flush for a while. They expanded everywhere. For Tribune, that meant taking on immense debt to buy the company that owned the Los Angeles Times and other papers.
It was an intriguing concept until the costs and conflicts were examined. At one point, there were almost enough Tribune reporters in Washington to give one to each member of the U. S. Senate. There were overlaps around the world when the Los Angeles Times foreign and national staffs and the smaller, but still aggressive, Tribune foreign and national staffs were joined.
Then it all unraveled.
The crushing burden of debt collided with Wall Street’s unyielding demand for increases in quarterly profits. That blasted a hole in the bottom of Tribune. The money started pouring out just as circulation and classified ads were shifting, eyes and dollars having been drawn to a new technology, the Internet.
The news “products,” all of them—from the graying eminences at the center of the business to the radio and TV properties—lost budget, lost staff, and lost, above all, reputation. The Chicago Tribune lost its foreign and national staffs, slashed deeply into its Washington presence, and began whittling away at its costly veterans back home.
With every act, the drama shifted ever closer to darkness.
The Los Angeles Times became a revolving door for editors and publishers. Not even modern legends could stop it. John Carroll and Dean Baquet were driven out in short order. James O’Shea followed. The Chicago Tribune’s institutional memory basically walked out, encouraged by buyouts and hints there would be few good jobs in the unhappy future.
Then, for Tribune, deus ex machina arrived in the form of a stubby, fabulously wealthy real estate baron with a taste for shocking quotes, big parties for his buds, and fast motorcycles: Sam Zell. He put $300 million of his own money on the table, cobbled together $12 billion in debt and bought out all the public shareholders.
It did not work.