Zell tells plans for Tribune; may sell Wrigley, Cubs apart

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CHICAGO - In his first full day as the prospective buyer of Tribune Co., real estate investor Sam Zell looked around the stately office of legendary Tribune figure Col. Robert R. McCormick and signaled that a new era is at hand.

“I think this would be a good place to park my motorcycle,” Zell said.

Pugnacious, matter-of-fact, confident and sometimes combative, Zell said he has bought Tribune Co. as a long-term investment, and that he believes newspapers and other so-called “old media” have plenty of profitable life ahead in the age of the Internet.

“I really believe you can be relevant and editorially spectacular. And I think you can be irrelevant and editorially spectacular,” Zell said. “The name of the game is to be the former and not the latter.”

Zell said he invested in Tribune because “this is a great challenge. It’s a great opportunity. ... Everything I do is motivated by doing it best, doing it different, answering the questions that no one else could.”

The existence of an Employee Stock Ownership Plan should help align Zell’s interests and those of employees, he said. He will seek to assure that two members of the board of directors will be representative of the ESOP views, even though they will not legally be bound to represent ESOP interests.

“The idea was that two of the independents (directors) would be run by the ESOP,” Zell said. “In the end, it was all about alignment of interests, and nothing else matters. I’m putting $315 million into this deal, cash. I don’t make a nickel return unless the deal is a success to the stockholders,” he said. “We are tied in the pot together.”

He looks at his investment of $315 million with a 10-year outlook for starters.

“My influence will be felt,” Zell said, but he declined to lay out specifically what he strategies he plans to pursue.

One area Zell promised his influence will not be felt: In the editorial policies and reporting of Tribune Co. newspapers. “Do I look naive enough to think I have any influence about what people write?” he asked. “In fact, I will accept that your writing on me is gong to be - hard to believe - worse than it has been.”

When asked what he would do if the newspaper were preparing an unflattering profile of him, Zell cut in: “You already did, you already did.”

Zell plans to compare the views of the business that his team of advisors has developed as outsiders to what Tribune management has developed over the years.

“We’re in the early stages of mapping our opinions, and then we’re going to run it up against everybody and see how our thinking and their thinking is similar,” Zell said.

He plans to recruit directors with a wide variety of experience to serve on Tribune’s board. “I want to find people who in one form or another are cheap consultants. I’m not kidding,” he said. “Newspapers. TV, the Internet: What do we do? What do we do? Those are the three (key) areas.

“I promise you, I have no monopoly on ideas. In fact, whatever ideas I have are not enough,” he added.

Zell and his associates plan to visit other major media companies. “We’re going to see everybody in the business,” he said. “We’re going just to listen, and to watch.”

Zell said the key issue will be to deliver relevant content to readers, or viewers whether in newspapers, on TV or over the Internet.

“The question is, if Harry is a great reporter and in fact he ends up being a blogger on the Internet for the Tribune or the LA Times and that creates revenue, that’s the name of the game,” Zell said. “What I’m saying to you is it’s all about relevance. It’s all about contribution. I feel very strongly that that core thesis permeates everything.”

He plans to put ideas to the test in the same crucible of debate that he uses in other businesses. “One of my favorite terms in that circumstance is, `Take me on. Here’s what I think, take me on. Why is this not relevant?’ And you know what, sometimes they’re absolutely right and I’m dead wrong,” Zell said.

Zell said he will give Tribune management, led by chief executive Dennis FitzSimons, time to prove themselves. Board room infighting in the years since Tribune acquired Times Mirror Co. in 2000 have made it hard for them to focus on a strategy, he said.

“I view the period since the LA Times (merger) as being a period in which too much time, effort and focus have been spent on dealing with issues that had nothing to do with the running of the business,” Zell said. “I hope that our transaction puts all those issues to bed.”

Zell said he is an avid newspaper reader who each day consumes five newspapers: The Tribune, the New York Times, the Los Angeles Times, the Wall Street Journal and the Financial Times. He reads several business magazines, too. “I read everything.”

One thing he does not read: The editorial page of the L.A. Times. But Zell declined to say why.

On the issue of the sale of the Chicago Cubs, Zell confirmed that he may seek to sell Wrigley Field separately. He acknowledged that Wrigley, because of its landmark status, is a tricky, single-use piece of property.

“Unless they’re going to let us build a couple of high rises adjacent to first, second and third, it is somewhat a single-purpose structure,” Zell said. He acknowledged that the ballpark probably will never serve any other purpose. “Wrigley Field is just Wrigley Field,” he said.

Zell expressed confidence he will strike a good deal for Tribune if he sells Wrigley separately from the Cubs.

“You should assume that I am probably a good enough real-estate man not to get left with the old maid,” he said of Wrigley.