Zell wins Tribune bidding


Deal for Sun-Sentinel parent valued at $8.2 billion

By Thomas S. Mulligan and James Rainey
Los Angeles Times
Posted April 3 2007

Billionaire real estate mogul Sam Zell has reached an agreement to buy Tribune Co. in a two-stage deal valued at $8.2 billion, or $34 a share, the company said Monday.

Tribune, owner of the South Florida Sun-Sentinel, also announced that it would sell the Chicago Cubs baseball team after the 2007 baseball season and the company's 25 percent interest in its regional cable sports network.

The deal, worth about $13 billion including Tribune's almost $5 billion in existing debt, would put a 65-year-old entrepreneur famed for turning around troubled properties at the helm of the nation's third-largest newspaper chain and one of its largest conglomerations of television stations.

Zell's offer was sweetened over the weekend to top an 11th-hour proposal from Los Angeles billionaires Eli Broad and Ron Burkle.

Pending regulatory and shareholder approvals that could take months, Zell would take control of the company in partnership with a newly formed employee stock ownership plan, or ESOP. Tribune would be privately held and run by Zell in conjunction with the ESOP, represented by an independent trustee.

Sun-Sentinel Publisher Bob Gremillion said it was his understanding that Zell doesn't plan to sell any of Tribune's nine newspapers.

"And if he were going to sell newspapers, he wouldn't sell this one," Gremillion said in an interview Monday.

Industry analyst John Morton said the four Tribune papers that are "absolutely inviolate" are the Los Angeles Times, Chicago Tribune, the Sun-Sentinel and the Orlando Sentinel, "because they are the cash cows."

Gremillion declined to give specifics on Sun-Sentinel's financial figures, but said "it's up there" among the Tribune's most profitable newspapers. A November report by Merrill Lynch analyst Lauren Rich Fine estimated the Sun-Sentinel's 2006 margin (before taxes and other expenses) at 28 percent, tied with the Orlando Sentinel for the highest among the Tribune's six largest newspapers.

The Sun-Sentinel, which in recent years had avoided the large-scale job cuts that have become common in the newspaper industry, offered voluntary buyouts in February to newsroom staffers 55 or older with at least 10 years at the newspaper. Eighteen employees, or roughly 6 percent of the editorial staff, took the buyout.

Gremillion said he hoped that no further personnel cuts would have to be made this year, but he would not rule them out if ad revenues continue to decline. The newspaper has about 1,700 employees, including more than 300 in editorial.

The deal represents the second potential sale in a little more than a year of one of the nation's top newspaper operators. McClatchy Co. of Sacramento, Calif., bought Knight Ridder Inc., previously the second-largest chain by circulation, in March 2006.

Zell, a maverick who fancies Ducati motorcycles, leather jackets and rousing games of paintball, did not enter the bidding until early February, after Tribune's deadline for offers.

Zell made his move at a time when he was still negotiating the second-biggest leveraged buyout in history -- the sale of his Equity Office Properties Trust commercial real estate empire for $23 billion to Blackstone Group, a New York private equity firm.

Zell said he saw reason to be hopeful about the Tribune's prospects and he has told executives in the company that he has particularly high hopes for its Internet holdings, which include 42.5 percent of the largest online job search site, CareerBuilder.com.

He said in an interview with The Associated Press last month that he was more bullish on the company's core businesses than most.

"I just think that newspapers are a part of our life, and they're a part of our culture and a part of our society," Zell said, "and there will always be a place for them."

Tribune's operating profit has dipped from its 2003 high of $1.36 billion to $1.09 billion in 2006. The falloff in newspaper advertising continued in the first months of 2007.

Those declines have been reflected in the price of Tribune shares, which reached almost $52 a share in spring 2004 but languished below $28 last year before protests by the Chandler family of Los Angeles, the company's largest shareholder, kicked off the auction.

"As a private company, operating outside the glare of the public markets, we will be better able to focus on long-term growth as we transform our publishing and broadcasting businesses," Tribune CEO Dennis FitzSimons wrote in an e-mail letter to employees Monday.

Sun-Sentinel Staff Writer Ian Katz contributed to this report.

"Qui tacet consentit"


"Rather fail with honor than succeed by fraud."
-Sophocles

Age 65, successful businessman, worth Billions and plays paintball! Now that is a testement to the success of paintball and its appeal to the masses.

"Qui tacet consentit"


"Rather fail with honor than succeed by fraud."
-Sophocles

Hey Rich! A BILLIONAIRE that has a publishing empire AND plays paintball.

"Uh..hello, Mr. Zell. We are but a few poor journalist/photographers who have been overlooked and slighted by the paintball magazine "ESTABLISHMENT". We know you would appreciate that yourself, being the rogue venture capitalist and general rich guy you are and everything and all. We were, uh... wondering is you could see your way through cuttin' loose with a couple of mil, or maybe just ONE mil so we could add another diamond to your crown in the form of a first class Scenario/Woods/Rec Ball magazine? Couldya', huh? Couldya? Maybe just throw us a newspaper to churn out the same thing. Yeah, it's not glossy, but there's plenty of uses for it after it's read!"


The name of this new mag would be, of course,


Man, what we could do with THAT! What is his e-mail address...?

that is lot of money to deal with

TriggerTyme
mafia
Patrickstar