For employees, a step closer to ownership

Yesterday's 35-40 minute shareholders meeting was dry and dull, except of course, for the dozen or so questions from employee representatives. There was very little CEO FitzSimons said that provided information new to what had been previously available in published reports. Though we knew the vote outcome was a no-brainer – shareholders wanted out for sure – we were disappointed there wasn't a bit more shareholder pressure on the ESOP question. But hey. There were only nine of us (of 75-80?) in attendance who care about employee rights.

So if all goes as expected, by year's end you'll be the owner of one of the nation's biggest multimedia companies. Tribune will become employee-owned, but not employee-managed. Upon completion of the deal, Zell, with his option to purchase 43.5 million new shares from the ESOP, will own 43.5% of Tribune Company and become it's Chairman of the Board and you will own 56.5% of the company, but have no seat on the Board or the ESOP committee.

Okay. That's the Deal and as a Tribune employee in Chicago told us recently, that horse had already left the barn. But unlike our good ESOP tale, this ESOP should be plenty worrisome for non-union employees because in addition to being an owner without a voice, you'll also own more debt than you ever could have imagined and certainly never asked for. And though your pre-April retirement accounts may be in good shape, you folks in your 40s and 50s particularly need to pay close attention to how this ESOP performs going forward.

You can find analysis, numbers, projections and reports about next steps of the Zell Deal here Chicago Tribune and here Los Angeles Times, but we need to talk about something else.

There's about 3000 Tribune employees who will not automatically become employee owners of the new Tribune (Baltimore Sun, Newsday, Stamford Advocate and the LAT Pressmen), nor will they shoulder the company's $13 billion debt load. Why? Because they're either covered by a Newspaper Guild contract, a GCIU/Teamster contract or a UAW contract, that guarantees their right to have a voice on their retirement plans. In other words, Tribune could not impose the ESOP on union-covered employees. That's not to say future negotiations may not include ESOP participation, but the decision will rest with the parties involved.

The #1 concern we hear from you relates to Tribune's long-term survival. The company for which you have dedicated your talent and time – in some cases, your entire careers – is in serious trouble and many of you are scared enough to seriously consider getting out of journalism all together. It's sad, it is discouraging and it may be tempting, but now, at a time when the company (and the industry) needs your experience and talent the most, there are other alternatives that can ensure you have more say in the process.

So it is in this context that we'll talk about your value here, rather than day-to-day comment, discussion and prediction of Tribune's value. Because at the end of the day, without you, Tribune Company has no value.

Next: Ideas for moving from a shrinking iceberg to terra firma