If billionaire real estate-magnate-turned media mogul Sam Zell could do it all over again he would never have bought Tribune Co.
"By definition, if you bought something and it's now worth a great deal less," Zell told Bloomberg on Wednesday. "You made a mistake. And I'm more than willing to say I made a mistake. I was too optimistic in
terms of the newspaper's ability to preserve its position."
Well, Tribune is certainly not worth close to the $13 billion including debt Zell paid to take the Chicago-based company private in April 2007. Only a year and a half later, buckling from its steep debt coupled with slowing advertising and subscriptions, Tribune was forced to declare bankruptcy.
Zell's frustration with Tribune was tipped off more than a year ago at a chat with employees at the Orlando Sentinel when he retorted an expletive to an employee, who accused the newspaper about softening news coverage.
It apparently wasn't just the news coverage that was softening at Tribune. Zell miscalculated how much Tribune's finances would deteriorate and the newspaper industry would fall into distress. Times are so bad for newspaper companies in general that even once blue-chip newspaper publisher New York Times Co. (NYSE: NYT) is struggling to survive. The future doesn't look bright as industry analysts predict advertising could drop as much as 30% at some papers in the first quarter. One such scenario has happened at newspaper heavyweight Gannett Co. Inc. (NYSE: GCI), which reported Thursday morning revenue fell 18% to $1.38 billion, just below Wall Street forecasts for $1.44 billion.
As for any merger possibilities for Tribune, Zell sees that scenario as almost slim to none, for now. "I don't think there's a long list of people who want to buy newspaper companies today and for sure it's not likely to be the case until we reach some kind of a new bottom as to what the newspaper's role in our society going forward," Zell told Bloomberg. - Gerald Magpily
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If billionaire real estate-magnate-turned media mogul Sam Zell could do it all over again he would never have bought Tribune Co.
