Zell, About To Take Over, To Axe FitzSimons
(It's now official. In a farewell message which did not quite approach the eloquence of George Washington's, FitzSimons says Zell will be CEO as soon as the deal closes and that he'll have wrapped up things and be gone by the end of the year. FitzSimons mentions a lot of corporate types, including Times publisher David Hiller, in a complimentary way -- a roster of those most instrumental in directing the Tribune Co. downhill).
FitzSimons, who I remarked in August of 2006 "might be better qualified to run a Chicago hot dog stand than the Tribune Co.," will reportedly get a $38 million severance package, including $19 million from the sale of stock, restricted stock grants and stock options. But it's worth it to get rid of a man who for more than four years ran the company into the ground. cutting costs incessantly, alienating readers, laying off employees, squabbling with the Chandler family, and assuming ever larger debt for the company. Tribune certainly could not stand another four years of steady revenue losses. Now, there is every sign that under Zell, the company will be in better hands.
The FitzSimons severance package proves again the adage that the more unsuccessful the corporate executive, the more he can take away with him when he leaves. Mark Willes, who was so unsuccessful at Times-Mirror that the whole company and almost all its properties were sold out from underneath him to Tribune by a financial officer, walked off with a reported $100 million or better, and he even took his office soft drinks with him.
I would hesitate to say these men were bad people, instead just contending that they should have been in different careers. They may have meant well, but they didn't know what they were doing. In FitzSimons' case, each of the steps he took that ended up diminishing the company, were meant to restore it to prosperity. FitzSimons just didn't understand that you have to invest in a company, you can't just pare it away to a shadow of its former self and expect all to improve. And he was limited by a disdain for California, the state where his immediate predecessors had purchased their largest newspaper, the Times. He was psychologically unable to come to grips with that opportunity. He let circulation drop by a third, while investing little or nothing for years in promotion. It drove Times editors up the wall.
If FitzSimons had lived in the 19th Century and heard that gold was discovered in California, he wouldn't have been willing to pay to rent a wagon to take him there. And at a time when Silicon Valley was setting new standards of prosperity for the whole country, in a part of California where the newspapers, the San Jose Mercury-News and the San Francisco Chronicle, were withering, he couldn't come to grips with the idea that demographics were mandating that the L.A. Times become a statewide newspaper.
Now, if he doesn't eat too much of the lousy Chicago food, FitzSimons, at 57, can look forward to a long happy life, perhaps on a ranch in Montana, which he will certainly now be able to afford. I just hope for his sake that he is willing to commit part of his severance to it. He's hardly going to be on the A-list of Chicago social invitees.
Putting him aside, into the trash bin of big business mediocrity, the question will soon arise what other immediate changes Zell, a real estate magnate who has been tremendously successful in life, but is new to the newspaper business, will make as he takes over the Tribune Co.
Certainly, appointing a new publisher and a new editor for the Los Angeles Times, and gettling new, ambitious expansion policies underway there, should be his greatest priorities. The present publisher and editor, David Hiller and James O'Shea, are Chicagoans who don't understand or even empathize with California. Hiller makes the same mistake that Amy Wilentz makes in her book, "I Feel Earthquakes More Often Than They Happen." He assumes that California is, most importantly, celebrities and concentrates on those. Like her, he forgets the state's natural beauty and its genius for leading the way (Silicon Valley and Caltech, Berkeley and Stanford, even more than the movies). Wilentz, if she stays around, may one day write a better, more friendly California book. I don't think Hiller is going to have time to revise his opinions.
Hiller's one laudable achievement was to begin improving the Times' Web site. Under its new Internet editor, Meredith Artley, it has been gaining both readers and advertising. The future of the newspaper business is very significantly on the Web.
(Already, today, Ed Padgett on his blog reports that the word in Chicago is that 40 corporate executives of Tribune will be leaving, and get a total severance package, approved some time ago by the board of directors, of $269 million. In another society, this would be called robbery. In America, it is routine).
Zell, who owns a mansion in Malibu and spends considerable time there, should find Californians to lead the Times. A good choice as editor might be Geoffrey Cowan, who has just stepped down as dean of the Annenberg school at USC, and a good choice as publisher might be either the former publisher who Tribune ousted, Jeff Johnson, or a Google executive who understands how to sell advertising. They would, initially, be able to improve both the editorial pages and the 2008 political coverage. They might even be able to stiffen the spine of political blog writers Don Frederick and Andrew Malcolm.
But I don't want to be too categorical or set up unnecessary hurdles. I recognize that Zell understands business, if not yet the newspaper business, far better than I do. I have confidence he will know what to do.
I was glad, but not terribly surprised, to read in the New York Times yesterday, in the Page 1 article on the subprime crisis by Edmund L. Andrews, that the leaders of the Northern California-based Greenlining Institute, John C. Gamboa and Robert L. Gnaizda, had warned then-Federal Reserve Board Chairman Alan Greenspan back in 2004 that mortgage lenders were running out of bounds, giving many unwise loans to people who would never be able to afford to pay them back, especially as adjustable rates zoomed. To his disgrace, Greenspan ignored them.
The Greenlining Institute is a multi-ethnic assembly of 35 minority, low income and community groups that work on housing and other issues of concern. I knew both Gamboa and Gnaizda well as a reporter of insurance issues for the Times, and came to admire them greatly. Had they been listened to on many issues, we would have a better society today.