Thursday, December 20, 2007

Zell's First Big Move Is A Sign Of Flamboyance

The L.A. Times has been covering its own tribulations quite well, much better than most newspapers would in the same circumstances, and that is manifest this morning in the Business section story by Tom Mulligan and Michael Hiltzik reporting on new Tribune Co. owner Sam Zell's first major move now that he is taking charge.

In a most colorful story, Mulligan and Hiltzik depict the career of Randy Michaels, 55, former chief executive of the Clear Channel stations, who Zell is bringing in to focus on Tribune's two dozen television stations and interactive enterprises. The two men have had a long association.

Michaels is described as a brash and innovative thinker, with a record of at least occasional flamboyance, as in the time he pretended on the air to puree a green frog which was the mascot for a rival station, asking the audience, "What is green and goes 100 miles an hour?" Like Zell, Michaels is highly informal, by no means a conventional thinker.

Michaels built Clear Channel Communications into a 1,200-station network before being demoted in 2002 for perhaps offending some of his colleagues and not being part of the Clear Channel controlling family.

Zell's desire to take control of Tribune properties with a "hands-on" approach is said in the story to have marked six to eight weeks of conversations he had with Tribune CEO Dennis FitzSimons, during which time FitzSimons, not a particularly fast thinker, apparently got the idea he wanted him to leave, as he now is doing.

(I did FitzSimons an injustice yesterday in saying he had a severance package of $40 million. As a New York Times story by Richard Perez-Pena reports this morning, it is actually $19 million, with another $19 million derived from the sale of stock, restricted stock grants and stock options FitzSimons was already holding. I have corrected the figures in yesterday's blog, and regret the error. FitzSimons is still getting an excellent departure deal, but it does not bear comparision with the reported $100 million plus that Mark Willes got when he was ousted as CEO of Times-Mirror at the time it was sold from under him by a financial officer to the Tribune Co. ).

Whether Zell's initial period as new CEO of Tribune Co. is going to be reminiscent of Franklin D. Roosevelt's first 100 days in office in the heart of the Depressi0n in 1933 is, of course, unknown at this point. Zell is very closemouthed about his specific plans. But like Roosevelt, he is taking conrol at a time when neither the banks nor outside observers are at all sanguine about the future of the enterprise.

But arighting Tribune, after the disasters -- revenue losses and demoralizing conflicts of recent years -- cannot be the work of a timid man, and there is no sign Zell is one. Neither, of course, was Roosevelt. Let's hope Tribune Co. benefits as much as the USA did in the 1930s.

I confess I have high expectations for the "New Deal" at Tribune and am hopeful Zell will usher in a new period of dynamism and growth at the Tribune Co.'s largest newspaper property, the L.A. Times.

The staff is certainly watching. It is a brave staff that has stood up repeatedly in recent years for the newspaper's best interests against the insouciance of FitzSimons toward it and the state of California. Let's hope the new man satisfies the highest expectations.

--

A new Washington Post-ABC News poll this morning shows former Gov. Michael Huckabee building a sizable lead over former Gov. Mitt Romney in the campaign leading up to the Jan. 3 Iowa caucuses. Yesterday, it also appeared that Sen. Barack Obama has a smaller lead over Sen. Hillary Clinton and former Sen. John Edwards, although polls in the Democratic race have differed, and the actual way of counting the caucus votes on the Democratic side could lead to a murky result.

Still, the apparent rise of Huckabee and Obama, the abrupt sinking of former Mayor Rudolph Giuliani and, to a lesser extent, Clinton, indicate a volatile political climate as the election year approaches. As Peter Wallsten pointed out in an intriguing analysis in yesterday's Los Angeles Times, the war has faded as an issue and the economy has come to the fore. This could change again, but for the moment it is benefitting the less establishment candidates.

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