Thursday, June 22, 2006

FitzSimons Apparently Trying To Remove Chandlers From Tribune Board

A New York Times profile of Thomas Unterman, the Los Angeles lawyer apparently coordinating the Chandler family fight against Tribune Co. CEO Dennis FitzSimons, reveals this morning that under terms of the stock buyback plan promulgated by FitzSimons, the Chandlers could lose their only three seats on the 11-member Tribune board.

This would occur, if the Chandlers were to tender 15% or more of their outstanding Tribune shares in the stock buyback.

Under these circumstances, no wonder the Chandler family has declined to tender any of its shares, and has, last week, sharply assailed FitzSimons.

Given his past policies, there can be no doubt that FitzSimons hopes to use the buyback to consolidate his position in the faltering Tribune Co. And that consolidated position would in all likelihood be used to discriminate even more than he has already against the interests of the Los Angeles Times.

Just two days ago, FitzSimons strongly hinted in a New York speech that the Times' foreign and national bureaus would be subordinated in his scheme for future management to Tribune-wide interests, with the content of the foreign and national news reports being standardized in all Tribune newspapers. Since it could not be expected that the Chicago Tribune would close any of its own bureaus, this is a strong indication that some of the Times' bureaus would be closed under his plan.

Since news of the rift between the Chandler family and FitzSimons and his fellow-Chicago businessmen on the Tribune board surfaced last week, it has become abundantly clear that if the CEO gets his way, the Times is under dire threat of becoming a second-rate newspaper.

As is well known, Californians do not like losers. Times circulation, down by a dreadful 350,000 since the Tribune bought out Times-Mirror six years ago, will go into a further nosedive if readers in Los Angeles perceive the Times to be losing quality, which has already happened to some extent.

That's why, putting all the tax consequences of this dispute aside, the interests of the Times staff, their readers and in fact all of Los Angeles and the state of California will be severely compromised if FitzSimons prevails and the paper is not sold back to local interests. But perhaps the next development is a Chandler family lawsuit which could put the CEO under even greater pressure.

The New York Times profile of Unterman, incidentally, is rather thin, since he would not agree to be interviewed.

More than a month before word of the Chandler-FitzSimons rift got out, I received a call from a lawyer in New York indicating that disaffected investors were contemplating a lawsuit against Unterman for allegedly usurping total control over an investment firm he headed, without any consideration for the interests of the investors.

Since then, however, I've heard nothing of this. That Unterman, based on his past record of arranging the sale of Times-Mirror to Tribune without the knowledge of then-Times Mirror CEO Mark Willes, is a key figure in the present drama, we can have no doubt. My suspicion is that if anybody can do FitzSimons in, he is that person.


Anonymous Anonymous said...

Hi Ken,
Please address this: What is FitzSimons likely to do to Newsday's foreign bureaus? Get rid of all of them? Newsday once had six bureaus. Earlier this year its bureaus in Mexico City, Beijing and Johannesburg were closed. Now it has only a reporter covering Latin America from New York, and two reporters in the Arab World. A foreign correspondent based in Europe, Matt McAllister, is about to take a leave of absence and will not be replaced.
Is it likely that Newday will have any foreign bureaus at all? Or will it become the New York equivalent of the Orange County Register, covering only the suburbs of a big city, thanks to Tribune?

7/05/2006 12:04 PM  

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