Buyout gone bust: Late billionaire Sam Zell and Tribune Co.
- But his legacy in the city also includes one of his biggest failures: buying Tribune Co.
The big picture: Zell was known as the "grave dancer" for taking distressed assets and risky real estate and turning a profit. His amazing run culminated in a $39 billion sale of his office-tower company in 2007.
- Shortly after, the aggressive investor jumped into the newspaper industry, a move that led to the dismantling of Tribune Co.
Flashback: Zell shocked Chicago by outbidding other billionaires to buy Tribune Co., which included the Chicago Tribune and Los Angeles Times, in 2007. He forked over millions of his own money and took the company private in an $8.2 billion deal.
- At the time, Tribune owned several newspapers, television stations like WGN-TV (and WGN America), WGN Radio and the Chicago Cubs.
- His goal was to shake up and reinvent the conservative company, while making it more profitable with a mix of revenue from new products and newsroom cost-cutting.
Yes, but: In treating the purchase like a real estate deal, Zell saddled the company with billions in loans that he had used to finance the purchase, which ultimately led to its bankruptcy the following year.
- At the time, it was the largest media bankruptcy in American history.
- The fiasco led Forbes to write in 2008 that "the 'grave dancer' of real estate development was now the 'grave digger' of the newspaper world."
- During the lengthy bankruptcy resolution, the Cubs were sold to the Ricketts family in 2009. Zell and other Tribune shareholders paid $200 million to settle creditor lawsuits in 2019.
Between the lines: Zell's tumultuous ownership exacerbated financial pressures that hit the newspaper industry during that time.
- While the company was in bankruptcy, the New York Times published a scathing takedown of Zell and his top executive, Randy Michaels, which included several alleged instances of sexual harassment and conflicts of interest at the hands of management.
- Zell also cut 4,200 jobs during his ownership.
The bottom line: When the company came out of bankruptcy in 2012, Zell was removed and the Tribune board began the process of splitting the company into two entities: Tribune Media and Tribune Publishing.
- "It was the deal from hell," Zell famously said of buying Tribune.
Today, the Chicago Tribune is owned by Alden Publishing, a group known for gutting newsrooms. WGN television and radio are no longer "Chicago's Very Own," sold to the Texas outfit Nexstar. Tribune Tower was sold to create luxury condos.
- Just this month, it was announced that the Tribune's printing plant, dubbed the Freedom Center, will be sold to make way for Bally's Chicago casino. Printing will probably be moved to Schaumburg.
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