Oneal and Steve Mills, another Tribune reporter, covered the case in a four-part series last week called "Broken Deal" (there are excerpts outside the paywall), which was described as "riveting" by Michael Miner, the astute media critic of the Chicago Reader (a once independent weekly now owned by Wrapports, which also owns the Chicago Sun-Times). The activities of the investment funds and their lawyers--running up to $1,000 an hour--piled enormous expenses on the failed deal as it made it ways through the courts, leading Oneal to conclude: "For Tribune Co., its employees and many of its smaller creditors, bankruptcy became a debilitating period of missed opportunities and stalled strategy. The cost to Tribune Co. in legal and professional fees will likely run to more than $500 million." Moreover, the mess could still ensnare thousands of former Tribune shareholders, because they benefited from Zell's dubious buy-out, which went bust--as Zell and his bankers should have foreseen. Oneal and Mill's reporting confirmed that thirty-eight top Tribune Company managers received almost $150 million in payments from the initial deal, including various incentive and option packages.
The Tribune Company has unloaded Newsday to the Dolan family in New York and the beloved Chicago Cubs to the Ricketts family. What emerges is a company with strong new management, only $1.1 billion in debt, and a $300-million line of credit. The chairman is Bruce Karsh, president of Oaktree Capital Management, the private equity firm that ended up with 23 percent of the company, the largest single stake. The CEO is Peter Liguori, a former chief operating officer of cable television programmer Discovery Communications. Eddy Hartenstein, who was interim chief executive remains on the board and will be chief executive of the Los Angeles Times as well as an adviser to Liguori. In a letter to the staff, Liguori wrote that the Tribune Company still has "unparalleled media assets, iconic brands in major markets and very talented, creative employees." He said the company is an example of "what is best is in media, television, and journalism in America."
Aside from the eight daily newspapers, Tribune owns twenty-three televisions stations, a stake in the Food Network, and national cable network WGN America. Given Liguori's broadcast background and the relatively robust condition of cable television and related digital assets, the assumption is that the newspapers will be for sale, perhaps to Rupert Murdoch's new spin-off, News Corp., that has made clear its interest in the Los Angeles Times and perhaps the Chicago Tribune. The Wrapports group is another contender for the Chicago paper. It is composed of Chicago business leaders, who decided to take on the Sun-Times at a bargain price. The Tribune and Sun-Times are already closely related through printing and distribution agreements. I was surprised to read in Michael Miner's assessment of the "Broken Deal" series his decidedly positive view of how the Tribune has endured these years of drastic cutback and criticism.