Tribune Co. Foolishly Goes To Merrill Lynch On What To Do
Dennis FitzSimons, the unusually inept CEO of the failing Tribune Co., now says he has retained the Wall St. firm of Merrill Lynch for advice on what to do to maximize Tribune's business opportunities, specifically to advise whether it should sell some or all of its newspapers.
But Merrill Lynch is the same firm that nearly advised Orange County into bankruptcy, and Wall Street seldom has the public interest in mind when it renders its advice. Short-term money, not long-term sagacity, are the watchwords of Wall St.
FitzSimons' latest lousy decision, in short, is another way of trying to hold on to properties Tribune has had neither the judgment nor foresight to manage properly. FitzSimons, who has continued to pay himself ever larger salaries, while managing his newspapers toward oblivion, continues to seek to keep his fatal grasp regardless of the circumstances.
BusinessWeek said last week that it believed Tribune Co. would not sell the L.A. Times and that the Times and the Chicago Tribune are doomed to live together in an unhappy marriage.
But L.A. Times media columnist Tim Rutten had a better idea when he wrote Saturday that there is an obligation to Times readers to maintain a viable paper in Los Angeles.
"A 'strategic alternative' that does not unlock The Times' value to readers is a strategy for continued decline and ultimate failure," Rutten wrote.
Rutten also lauded Times editor Dean Baquet and publisher Jeffrey Johnson for refusing to knuckle under to FitzSimons' plans for further staff layoffs and other diminishment of the quality of the newspaper. This, he suggested, would further spin the paper, which has lost a quarter million subscribers since Tribune Co. bought the paper six years ago, into catastrophe.
Apparently, one argument against Tribune selling the Times is that it would incur a large tax debt for doing so. But FitzSimons has already accumulated $2.4 billion of additional debt with his crazy stock buyback plan, and a continuation of his policies could, as Rutten suggests, ultimately mean the destruction of the Times altogether. Then he and his fellow-numb skulls on the Tribune Board of Directors, would be left with nothing.
Under these circumstances, a sale is necessary, and FitzSimons probably has enough dishonest lawyers in his employ to advise him how to escape the taxes.
Labels: Tribune bids