Sam Zell's Promissory Note

Harold Meyerson reports that Sam Zell used a $225 million promissory note to buy the Chicago Tribune. The sales price of the Tribune was $315 million. The employee stock ownership plans are at a 100 percent risk. Tribune employees will see their retirement packages disappear. This is the media version of Enron.

The Tribune management told staff "all ongoing severance payments have been discontinued." The company has laid off staff. Zell is telling them they are stiffed.

Zell bought the Tribune in 2007 and filed for bankruptcy in 2008. That is quite an accomplishment.

Related: Chicago Tribune In Trouble
Why Bloggers Will Never Replace Journalists

Why Bloggers Will Never Replace Journalists

The Chicago Tribune announced hiring bankruptcy advisors and the law firm Sidley Austin. The Herald Tribune reports the McClatchy Co. is looking for a buyer of the Miami Herald.

The McClatchy Co., burdened by debt and a steep slide in newspaper advertising, wants to sell one of its most prized properties, The Miami Herald, according to people briefed on the company's plans.

McClatchy, the nation's third-largest newspaper chain, has approached potential buyers for The Herald, said these people. But they said they knew of no serious offers for the paper, reflecting the evaporation of major investors' interest in buying newspapers.

The company refused to discuss the matter. Elaine Lintecum, the treasurer, said, "We do not comment on market rumors."

"If anyone should fear a Depression, it should be journalists, who are already the equivalent of 1980s steelworkers," wrote Virginia Postrel. "But instead, they seem positively giddy with anticipation at the prospect of a return to '30s-style hardship--without, of course, the real hardship of the 1930s. (We're all yuppies now.)"

Glenn Reynolds approvingly links to Postrel's post.

And in 1914, a lot of the same sorts of people were giddy with anticipation for the war, because they expected a transformative and purifying experience. It was transformative.

This is utter nonsense. Postrel should ask the laid off employees of the Tampa Tribune if they feel "giddy" or purified about being laid off. I regularly exchange emails with members of the media. These people are scared of losing their jobs during a recession. Those concerns do not fit Reynolds' and Postrel's anti-media libertarian worldview that conservative bloggers are true reporters and the media is liberal propagandists.

Reynolds and Postrel have no intention of reporting from the frontlines of Afghanistan. The media gave us the excellent Lara Logan. The blogsosphere takes media rejects, such as unsuccessful columnist Michelle Malkin. The media may drop print and become an online beast. The news services will still be doing reporting. The bloggers will be commenting and linking to the news.

The person ahead of the curve was Josh Marshall of Talking Points Memo. Marshall turned his blog into an online news service. There is election coverage, breaking news stories, and investigative journalism. His work on the blog earned a Polk award. Reynolds kept overstating how blogging would replace the media. Marshall quietly created an internet media empire.

Chicago Tribune In Trouble

The Chicago Tribune is facing a possible bunkruptcy.

Chicago Tribune parent Tribune Co. is working with bankruptcy advisers at investment bank Lazard and law firm Sidley Austin to weigh its financial options, sources said Sunday.

"It's an uncertain and difficult environment," Tribune Co. spokesman Gary Weitman said Sunday night. "We haven't made any decision. We're looking at all of our options."

The Tribune was dealing will investor pressure in 2007. The company sold shares to local billionaire Sam Zell to restore public confidence. The deal gave Zell ownership of the Chicago Cubs. The results were disastrous. Los Angeles Times columnist Harold Meyerson accused Zell of destroying The Times.

During his first year in journalism, Zell has visited the city rooms and Washington bureaus of a number of Trib publications to deliver obscenity-laced warnings and threats to employees that whatever it was they were doing, it wasn't working. There was too much coverage of world and national affairs, he told Times writers and editors; readers don't want that stuff. Last week, the company decreed that its 12 papers would have to cut by 500 the number of pages they devoted every week to news, features and editorials, until the ratio of pages devoted to copy and pages devoted to advertising was a nice, even 1 to 1. At the Times, that would mean eliminating 82 pages a week.

As the company prepares to shed more reporters, it has measured writers' performances by the number of column inches of stories they ground out. It found, said one Zell executive, that the level of pages per reporter at one of Zell's smaller papers, the Hartford Courant (about 300), greatly exceeded that at the Times (about 50). As one of the handful of major national papers, however, the Times employs the kind of investigative and expert beat reporters not found at most smaller papers. I could name a number of Times writers who labored for months on stories that went on to win Pulitzers and other prizes, and whose column-inch production, accordingly, was relatively light. Doing so, I fear, would only put their necks on Zell's chopping block. So let me instead note that if The Post's Dana Priest and Anne Hull, who spent months uncovering the scandalous conditions at Walter Reed Army Medical Center, and whose reporting not only won a Pulitzer but caused a shake-up in the Army's treatment of wounded veterans, had been subjected to the Zellometer productivity index, they'd be prime candidates for termination.

Which is precisely, unfortunately, what's been happening at the Times. Voluntarily or not, large numbers of highly talented editors and reporters have left. The editorial staff is about two-thirds its size in the late 1990s, with further deep cuts in the offing. A paper that is both an axiom and an ornament of Los Angeles life, that helps set the political, business and artistic agenda for one of America's two great world metropolises, is being shrunk and, if Zell continues to get his way, dumbed down.

Cartoonist Rob Tornoe summed up Zell's leadership of the LAT.