Wednesday, May 24, 2006

Tribune CEO FitzSimons Caught In Conflict of Interest

The CEO of the Tribune Co., the unsavory Dennis FitzSimons, has let the company, including such valuable properties as the Los Angeles Times and the Chicago Cubs, slide, while protecting himself with his own high salary and control over a foundation which owns 13.7% of Tribune stock and is under his iron fisted control.

The Robert R. McCormick Tribune Foundation keeps 97% of its portfolio in Tribune Co. stock, contrary to the policy of most corporate foundations which wisely diversify their portfolios, all five of its directors are Tribune Co. executives, and the foundation stock is always voted with management. This makes a hostile takeover of the Tribune Co. much more difficult.

Meanwhile, under FitzSimon's mismanagement, the Tribune stock has fallen 47% since 2004, to the $27 level, and the foundation's giving to various charities has declined 15% since 1999, while nationwide, corporate foundation giving has increased by 22%.

FitzSimon's ineptitude also has resulted in his newspapers over all suffering circulation and revenue declines. L.A. Times circulation is down 250,000. Even the Tribune television stations seem to have lost out in the ratings. Folks, he clearly is not a good businessman.

This is all according to a long article in Crain's Chicago Business analyzing the unhealthy situation, complete with multiple statements by philanthropic watchdogs and stock analysts who deplore what is going on. Some call FitzSimon's double role as head of the Tribune Co. and of the McCormick Foundation a clear conflict of interest.

The article was relayed to members of the Old Farts here in Los Angeles by e-mail as part of an impressive package of communications keeping up with developments in journalism. The directors of the Old Farts, the L.A. Times retired employees association, are doing more to fight Tribune mistreatment of the L.A. Times, than the Times staff has been able to do, and certainly what the Chandler family members of the Tribune board have been willing to do.

William Josephson, an aide for the regulation of charities to New York State's crusading attorney general, Eliot Spitzer, is quoted as saying, "Obviously, where the Tribune controls the board of the Tribune Foundation, the Tribune Foundation is not going to exercise the rights (as a shareholder) in a meaningful way."

So, it does nothing to prevent a rogue executive from running completely amok.

The situation in Chicago is so bad that the Cubs team is complaining that the Chicago Tribune is giving the team negative coverage. This would be like the Times sports section giving the Clippers negative coverage, which this past week it has not done. Fortunately for the Clippers, they are owned by Donald Sterling and not by the Tribune. The Clippers have had enough screw ups in their history without being saddled with Dennis FitzSimons.

This nightmare is compounded by FitzSimons' refusal to entertain reasonable offers to buy back the Times, sold to the Tribune Co. in 2000, and restore it to local control. While increasing his own salary, he has laid off Times employees, not to mention the employees of other former Times-Mirror newspapers, such as the Baltimore Sun and Newsday. Times editor John Carroll quit in disgust last year and now
gives speeches assailing corporate ownership of newspapers.

FitzSimons is bad news for everyone but himself. This is quite a drama, and the seemingly helpless victims are the Times staff and the deprived readers in Los Angeles, among others. Somehow, we have to figure out how to get rid of this man and his minions before the paper is fatally weakened.

For the good of the people of Chicago, the Cubs should be sold as well. After all, the team has not won a World Series since 1908 and probably won't while FitzSimons lets one part of the company, the Chicago Tribune, give the Tribune Co.'s own team rotten coverage.

2 Comments:

Blogger Ed Padgett said...

Ken,

Grat to see you back at it on a daily basis, we can see your feeling better.

What is the web address of the Old Farts?

Ed

5/24/2006 9:26 AM  
Anonymous Anonymous said...

Hey Ken.... can pls give me the URL for the Old Farts website? I'm enjoying your blog. Thanks, Dick Barnes. dickbarnes@earthlink.net

5/24/2006 9:32 AM  

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