Does Sam Zell Have Any (Good) Ideas On Future?
Zell put forward only one vague idea for what to do in an interview last week with New York Times business columnist Joe Nocera. Nocera came away having to make up a column that ran Saturday with very little solid material.
Zell said only that advertising sales techniques must be improved. But that goes without saying. Otherwise, he asked, essentially, for time, until the deal closes.
But the L.A. Times and other Tribune newspapers may not have time. If further cutbacks and layoffs are to be avoided, fueling a continued downward spiral, things are going to have to turn brighter revenue-wise, or at least level out.
Abraham Lincoln, when he was elected President, kept silent about his plans for the Union until he actually started his trip to Washington, and he wasn't all that clear then. But Zell is no Lincoln. He needs to show now he can produce something.
All over the country, newspapers are in trouble, but not as much, usually, as Tribune. The New York Times was down 3.6% below last year, according to a recent statement. In California, both the San Francisco Chronicle and San Jose Mercury-News are cutting back so much, there is fear they may go under. The Chronicle just made it known that deputy editor Narda Zacchino is leaving. This is a little like when Katherine Ross left Paul Newman and Robert Redford in "Butch Cassidy and the Sundance Kid."
The L.A. Times, according to publisher David Hiller's statement last month has seen its profit margin dip to the low teens. There is a great deal of feeling in the community that the Times is not the paper it was, because of cutbacks in sections and the news hole. But the paper is publishing compelling stories every day. Just Saturday, its stories on the passport snafu and the failures of the immense investment of state funds in carpool lanes, plus Rebecca Trounson's sensitive story on the discussion at the Daniel Pearl movie screening were worth the price of the paper in themselves.
Let's say Zell does intend to beef up Times advertising sales. Then, I think, as a first step, he needs a new publisher. The publisher runs the business side, and Hiller is already a proven failure.
Also overdue for the chopping block is the present Tribune CEO, Dennis FitzSimons. This man is no leader. Virtually everything he has done already in his years of control have not worked out. It was FitzSimon's idea to vastly increase Tribune debt. Now, its papers should make further cutbacks, according to his policies, but the only consequence is that millions of readers are losing confidence in the papers, advertisers are losing confidence too, and revenue has been diving all year. At this rate, there may soon not be enough to service the debt.
When one looks at executive changes at such firms as Yahoo and Hewlett-Packard, one can see that many companies, in an uncertain environment, are opting for new CEOs.
The Tribune Co. should have one too, perhaps Zell himself. He has a reputation for great business success. Even if he is new to the newspaper business, this is his prime responsibility.
Much was made in the Nocera article about the fact that employees' stock will be used for the most part to finance the Tribune deal Zell made as the company goes private. He is putting in only a few hundred million dollars of his own money.
But if we don't want to see happen to Tribune employee stock what happened to the Enron stock, it's important that Zell show as soon as possible that he has working ideas.
The Times carpool story referred to above, by Rong-Gong Lin II and Sharon Bernstein, should make clear that it makes little sense for the state to invest so much in carpool lanes when they are only producing slow, clogged "high-speed" lanes. Billions have been going into this, when they could be going into straight widening of freeways, or, a better alternative, more subways and other rail transit.
At this rate, pretty soon pressure will build for making the pool lanes toll lanes, and since the public has paid for them through its taxes, this is very unfair.
There is a transportation crisis, and the Times must keep up its intensive coverage. This is a big story.
Labels: Tribune failures