Zell says Tribune acquisition a mistake
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Eliminating certain home delivery days for the Chicago Tribune and his company’s other newspapers is one option for improving its finances, Tribune Co. owner Sam Zell said Wednesday. Zell told Bloomberg Television that a home delivery cutback is one of many ideas being examined. The real estate mogul, who took Tribune private in an $8.2 billion deal in 2007 that loaded the company with debt as revenue started to slide, also said the acquisition was a mistake. “I was too optimistic in terms of the newspaper’s ability to preserve its position,” he said. The company filed for Chapter 11 bankruptcy reorganization a year after the Zell sale closed. The filing gives Zell leeway to renegotiate some $13 billion in debt, but it also could threaten his control of the company if creditors gain influence over key decisions. “I think we’re looking at every option at the Tribune Co.,” he said. “It’s very obvious that the newspaper model in its current form is not working. And the sooner we all acknowledge that the better. Whether it be home delivery, whether it be giving content away for free, I mean these are critical issues.” Pressed as to his thinking on home delivery, Zell commented, “We are looking at everything because in effect the future of the newspaper industry is at risk today.” The two newspapers in Detroit, the Free Press and the News, are the biggest publications to trim home delivery schedules. The papers, which share operations outside the newsroom, eliminated home delivery on their lowest circulation days: Mondays, Tuesdays and Saturdays. Such a step could be difficult for the Chicago Tribune. Unlike the Chicago Sun-Times, the Tribune derives most of its circulation through home delivery instead of from sales in stores and at newsstands. But Tribune circulation, as with many papers, is smallest on Mondays and Tuesdays. Its most recent audited circulation report showed a difference of around 200,000 daily copies in home subscription sales early in the week compared with Wednesdays through Fridays. Through September 2008, Tribune’s average weekday circulation was 516,032 vs. 313,176 for the Sun-Times. A Tribune Co. spokesman declined to elaborate on Zell’s remarks. At Sun-Times Media Group Inc., a spokeswoman said there are no plans to curtail home delivery of the Chicago Sun-Times. However, Chairman Jeremy Halbreich has said the company is considering whether to trim the publication frequency of some suburban dailies that it owns. Sun-Times Media Group filed for bankruptcy protection in March.
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