Saturday, June 23, 2007

Zell 'doesn't have a silver bullet'

NYT's Joe Nocera went to Chicago last week to see Sam Zell because he wanted to hear what Zell had to say about "his recent — how to describe it? “Takeover?” “Bear hug?” “Assumption of control?”— of the Tribune Company..."

As it turns out, Mr. Zell doesn’t have a silver bullet either. He seemed to take the view, for instance, that all it would take for the Tribune Company to start generating more ad revenue was a smarter advertising sales approach. And while he said he had ideas he wasn’t ready to unveil until the transaction closed, he didn’t seem to believe, as so many do (myself included), that the news business is going to have to find a different model if it hopes to thrive again. “It is a 160-year-old business that has a lot of history and an opportunity to do a much better job,” he said, speaking of the Tribune Company.
Zell also made it plain that he did the deal not because he harbored some deep feelings about the role of newspapers in a democracy, but because he was getting a good asset on the cheap. “I looked at this as a business transaction,” he told me. “That’s just who I am. My entry point is $34 a share”— and that low price is why he jumped in. (The ESOP trustee negotiated the lower $28 a share for the employees.) He was just doing what he’s done his entire career: buying an out-of-favor asset.

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