Sex, Profanity and Bankruptcy at the Tribune Company

The New York Times drops a bomb on the Chicago media giant

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Late last night, The New York Times published a scathing, 4,000-word investigation of the Tribune Company, the parent company of The Chicago Tribune, The Los Angeles Times, WGN America and other properties.  The story's message is threefold: Under the leadership of real-estate billionaire Sam Zell, who took over in 2007, the company has gone bankrupt, sacrificed its journalistic integrity and become a veritable "frat house" of lurid and profane behavior. The heavily sourced article details locker-room humor, office trysts and heated anecdotes from aggrieved former employees .

Getting ahead of the story, the Chicago Tribune's chief executive Randy Michaels sent an e-mail to employees instructing them to "ignore the noise" of the Times article:

We have been informed that tomorrow's New York Times will run a column written by David Carr... Many of the questions Mr. Carr asked us for this article concerned events, distortions and rumors more than two years old. He will apparently paint the work environment at Tribune as hostile, sexist and otherwise inappropriate...

It is our intention to have creative environment. A creative culture must be built on a foundation of respect for each other. Our goal is an environment where people are free to speak up, free to challenge authority, and free to fail on the way to success. Our culture is NOT about being offensive or hurtful.

From the Times article, here's what bloggers are focusing on:

  • An Incredible Amount of Sexual Deviance, writes Max Read at Gawker. He runs through the most damning instances:
-Just a few weeks after joining the Tribune Co. in the wake of Zell's purchase, executive Randy Michaels was at the InterContinental Hotel bar in Chicago with "senior colleagues." According to two people, Michaels "sat down and said, "watch this," and offered the waitress $100 to show him her breasts. The group sat dumbfounded." (Michaels denies the incident occurred.)

-The boorish behavior wasn't limited to male executives. The same source told Carr about a meeting where a "female executive jovially offered to bring in her assistant to perform a sexual act on someone... who seemed to be in a bad mood." But, hey, it was "jovial," so.
  • The Ways Sam Zell Ruined the Tribune  Chris Rovzar at New York magazine creates a list:
-Let's start with the numbers. Less than a year after buying the company Zell brought it through a bankruptcy where it listed $7.6 billion in assets against $13 billion in debt. That makes it the largest bankruptcy in American media history. More than 4,200 people lost jobs.
-The Chicago Tribune's circulation is down 9.8 percent in the first half of 2010. The Los Angeles Times's circulation is down 14.7 percent. Both drops are worse than the industry average.
-As this happened, though, the top level cronies of Zell and CEO Randy Michaels (he hired about twenty top managers from his former days as a radio manager and shock jock) received a total of $57.3 million in bonuses going into 2010. The previous year they only made $5.9 million in bonuses.
-At papers like the Tribune and the Times, brass insisted on credibility-crippling stunts like placing ads on the front page of the paper that were disguised as articles, and wrapping entire sections in obnoxious marketing campaigns.
  • Exposes the Tribune's Rotten Work Culture, writes Zeke Turner at The New York Observer: "There has not only been cost-cutting and declining quality at the company's newspapers (at The Chicago Tribune and The Los Angeles Times' circulation is down in 9.8 and 14.7 percent respectively in the first half of 2010), there has also been a culture of bar-room unprofessionalism instituted across the company by former executives from the radio business installed by Mr. Zell. Randy Michaels, a former shock jock who Mr. Zell named CEO, amended the company's employee handbook, as far as we can tell, to loosen the definition of harassment in the company's offices."
  • This Is Shameful, writes eMedia: "Sam Zell and Randy Michael took a page out of the 'Mad Men' era in trying to change the culture of The Tribune Company. In doing so, they have created an environment wrought with harassment, hubris and arrogance without bringing profit, performance or innovation."
  • On Randy Michael's Response to the Times Story  Choire Sicha at The Awl writes:

In one small part, we'll all agree with Randy Michaels—I also prefer to create workplaces where I am free to swear and be "creative"! (So does, oh right, almost anyone who's ever worked at a newspaper.) And, yes: most modern workplaces are ridiculously uptight. On the other hand, some of us have boundaries and have never bit any of our employees on the neck, as was accused of Randy Michaels in one lawsuit in the 90s. Oh and also I didn't help drain the life blood out of a corporation in the most spectacular, hideous way, leaving behind a series of newspapers that barely exist and should probably be stabbed to death. But God forbid Randy Michaels actually address the substance of the article.

  • The Times Article Hits the Nail on the Head, writes Robert Feder at "Readers of this blog already know all about the drinking, smoking and gambling party Michaels hosted for his management pals in the former office of Col. Robert R. McCormick, the company’s patriarch. Reporter Carr puts that incident and others in the context of a company in financial and moral bankruptcy." He cites the Times interview with newspaper industry analyst Ken Doctor: “They threw out what Tribune had stood for, quality journalism and a real brand integrity, and in just a year, pushed it down into mud and bankruptcy. And it’s been wallowing there for the last 20 months with no end in sight.”
This article is from the archive of our partner The Wire.