In January 2013, the Chicago Tribune did the closest equivalent to self-reflection journalism that it probably ever has done, and likely will ever do, in its mammoth four-part business story about the Tribune itself, entitled "Broken Deal". The story by Steve Mills and Michael Oneal documented the saga from when the Tribune changed ownership hands in 2007 to the Tribune's departure from bankruptcy in early 2013. The report chronicled the change of ownership to that of Chicago-area billionaire tyrant Sam Zell, the red flags over the deal both before and after the changeover completed, the ensuing complications in the boardroom and the newsroom while Zell and Tribune CEO Randy Michaels were in charge, and the roller coaster in bankruptcy court over the control of the Tribune Corporation.
The report, unlike the haughty reporting usually found in the business pages, has a rare air of fatalism to it, not only because it's talking about a topic close to home -- the travails of its corporate parent -- but because it's widely believed that the Tribune Corporation will soon be no more in its current form, as most if not all of its properties are expected to be sold off by the end of 2013. The patient has survived surgery and emerged from its years-long coma, only to be ready to have its limbs and head chopped off and all the pieces thrown to hungry cannibals waiting outside. (Indeed, the week this post was being written, word has broken that the Tribune has hired an investment bank to help weigh the sale of its top newspapers.)
The Tribune report deserves credit for summarizing in one place the years-long mess that ensued from meager beginnings. But the report, like the Tribune's reporting across its history, has grave shortcomings (pun very intended), not the least of which is that it glossed over the circumstances which led to the Tribune going into different ownership and into bankruptcy in the first place.
The Tribune discussed a small bit of history in the first part of the report, when it reports on "the legacy of a frustrating $8 billion deal in 2000 to merge with Los Angeles Times parent Times Mirror Co. The merger produced a bitter culture clash between the two companies that resulted in [Tribune CEO Dennis] FitzSimons and his team being demonized in Los Angeles as zealous cost cutters despite the need to rein in spending at the Times Mirror properties."
That deal put the Tribune in the mildly awkward position of breaking the law -- the FCC's cross-ownership rule which forbade (and still forbids) the ownership of a newspaper and television station in the same city, because concentrated media are inimical to democracy and free speech. In response, the Tribune
bribed convinced the FCC to grant it waivers to allow it to keep those newspapers in face of the law, thinking (as did everyone) that they could get the FCC to abolish that law, at which point it could then buy and profit from waves of cross-ownership holdings across the country and grow to become a top-tier media company. And they would have gotten away with it too if it weren't for meddling media activists like those with Chicago Media Action. We had our Seattle moment with the media ownership uprising in 2003, raising such an outcry over media concentration that even the corporate media sat up and took notice, as did the Third Circuit Court of Appeals which heard the outcry and blocked the FCC's attempt to abolish cross ownership and a number of other key media ownership rules.
It's no exaggeration to say that the Tribune gambled their future on that FCC ruling taking hold and sticking. Consider what happened when it didn't: The Tribune unleashed its fury against media activists and the public on its editorial pages, and tried to appeal away the ruling in the subsequent years, but all the appeals failed. Finally, in 2006, Tribune stockholders staged a revolt, distressed that the explosive growth they were promised was stymied (since those pesky media ownership rules were still in place). Here's what Broken Deal had to say about that:
"[The fallout from the Times Mirror purchase] was distracting, but the more significant threat to [Tribune CEO Dennis] FitzSimons' security was the growing unrest among the extended clan of legendary former Los Angeles Times publisher Otis Chandler. The Chandlers had controlled Times Mirror until the merger and held the second-largest block of Tribune Co. stock, after the McCormick Foundation. They were furious that the family fortune had been diminished under FitzSimons' watch and frustrated that exiting their position required cooperating with Tribune Co. to dismantle two partnerships the family had put together to limit taxes. Then in June 2006, the Chandlers brought matters to a head by launching a public campaign for FitzSimons' ouster. The CEO and supporters on the board pushed back. But what became clear in the following months was that even some longtime shareholders had had enough of the status quo."
Ultimately, the shareholder revolt succeeded in ousting FitzSimons and demanding new ownership. That's when Chicago-area billionaire tyrant Sam Zell became the Tribune's new owner and, as Broken Deal reports, ran the company into the ground.
The tenor of much of Broken Deal is marked by a sense that the Tribune was a victim of circumstances it couldn't control -- the banking collapse of 2008, the subsequent drying up of money in media markets, the incessant demands by banks, shareholders, and creditors. It's possible that these circumstances in combination could still have driven the Tribune into its present predicament, even if you take away our victory over the FCC in 2003. But suppose that the FCC hadn't been blocked, and the media ownership rules went on as proceeded. Billions of dollars of media ownership deals would have transacted in the fall of 2003, and the Tribune, in all likelihood, would have grown to become one of the largest media properties in America, with cross-ownership setups in dozens of cities nationwide. Fast forward five years to 2008 when the economy goes in the toilet; the Tribune would be a much larger company with a greater war chest, so that when the Great Recession hits, it can weather the storms more easily. It might even have to sell off some of its properties in order to stay afloat, just like what Clear Channel did. But at least the Tribune would have properties to sell; what's more, it wouldn't be in bankruptcy, it wouldn't be forced to choose between bad moves and worse moves, and it wouldn't spend four years fending off armies of ravenous creditors.
Plus, it's not like there was a huge media-fomented clamor over media ownership. Yes, there was a huge outcry, but that was generated as the result of grassroots actions, and not as the result of the media artificially ginning up awareness. Quite the contrary: the major corporate media clammed up about the media ownership proceedings in 2003 precisely because they didn't want to take the chance that the public would get in the way of the proceedings. The source of the victory on this score is clear. And it's not that much of hyperbole to say that WE (as in Chicago Media Action) killed the Tribune.
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