Sam Zell, Media Mogul
By Maria Bartiromo
One day you're sitting atop a real estate empire. A couple of months later, you're a media mogul presiding over a news kingdom studded with such crown jewels as the Los Angeles Times, the Chicago Tribune, Newsday, and The Baltimore Sun. Life is good for Sam Zell. Hard on the heels of the sale of Equity Office Properties for $39 billion, he has won control of Tribune Co. (TRB ) for a chump-change downpayment of $315 million. On Apr. 6, I caught up with this outspoken iconoclast to see where he plans to take one of the most buttoned-up companies in America.
The word is you're meeting with David Geffen to discuss the sale of the L.A. Times. Are you expecting to sell it?
I am having dinner with David Geffen tonight. The purpose of the dinner has nothing to do with the L.A. Times. I am looking forward to having dinner free of business after what has been a tough week. I have no intention of selling the L.A. Times. Period. End of speech.
Would you consider selling the Tribune newspapers in Baltimore or New York to local groups?
I don't have any plans to sell any newspapers. We're going to own all of the newspapers for the foreseeable future.
Do you see a need to downsize the staff at any of the papers?
I don't have enough information at this point to answer that.
Tribune's broadcasting operations have been disappointing, so what changes do you foresee there?
It's a little early to ask that question. The biggest immediate benefit is that the warfare between shareholders and the company will end, and that in itself will go a long way toward improving the environment.
Do you have an exit strategy, or are you in this for a long stay?
If you look at my track record, you will find that I rarely if ever make short-term investments. In this case, we envision being involved for at least 10 years.
Why should a new owner make any difference, since the pros at Tribune haven't found a growth strategy yet?
The management of Tribune has been significantly distracted for the past three to four years. I am hopeful that the [new] situation will allow them and me to focus on making it better.
Stand by and watch.
The deal is highly leveraged in an industry facing structural decline. How can you make this work without massive cost cuts?
If you look at the structure we basically have in place, cash flow more than covers the anticipated debt level. So whereas everyone is portraying the newspaper business as dead, I think Mark Twain's quote is applicable...that reports of its death are highly exaggerated.
This deal put you at odds with other billionaire investors like Eli Broad and Ron Burkle. How was it dealing with them?
I had almost no dealings with them.... The only involvement I have had with Eli Broad was about a week ago, when he asked me if I would be interested in taking on a partner. I said: "When I get the deal done...I'll let you know."
Are you intrigued by the prospect of taking Tribune public in the near future?
Never even crossed my mind.
Do you expect current management to stay on long-term, as in longer than one year?
I'm not a prognosticator by profession, but I'm assuming current management will run this company.
You now control a powerful media empire that includes influential papers. As we head toward the 2008 Presidential election, will you use their editorial pages to reflect your political views?
This is an economic transaction. I'm not buying trophies. I'm not buying a way to get my views shared with the rest of the world. As you know from our previous interviews, I'm not averse to telling everybody exactly what I think...[but] I believe in editorial independence. I truly believe that the editorial side of this business should not be determined by someone in my position. And I'm perfectly happy to have the newsrooms continue to do what they've been doing and maybe do it better.
How would you describe yourself politically? Conservative, liberal, libertarian, or something else?
I would probably call myself an economic conservative and a social liberal.
There is so much talk about the Internet eating away at newspapers. You come into this with little media experience.
That's my greatest asset, because I don't come in believing in current wisdom, and, therefore, I can look at the challenge as a completely empty canvas. That puts me in a unique position.
A lot of people talk about you being so different than the staid businessperson in newspapers, with your motorcycle and your great iconic holiday gifts. How does that make you feel?
Fine. I'd be even happier if nobody had an opinion at all and they just left me alone. I mean, this is not a dress rehearsal. I have only one life to lead. And I have to allocate my time to do what I like. And in my private time, I like doing a lot of stuff, and I just do it. And maybe it's not the same as everybody else, but that's O.K.
When are you expecting to sell the Chicago Cubs, and does that upset you to have to sell the team?
The plans are that after the baseball season, Tribune Co. would look to make a transaction. I'm really not a baseball fan, and frankly it was a decision that management was working on long before I got involved, and it was a prudent one. There are an awful lot of people out there who would really like to own the Cubs and who would pay a lot for them. I could accommodate them.
Maria Bartiromo is the anchor of CNBC's Closing Bell.