Is This The First Zell Move, Or Just Coincidence?

Happy Holidays, Merry Christmas, Happy Hanukkah, everybody!

The year ahead is certain to be a dramatic one for the Tribune Co., owner of the Los Angeles Times, under its new CEO, Sam Zell. Since, in the newspaper business at least, he is such an unknown quantity, all we can do is watch carefully, and hope for the best.

Already, in the Los Angeles Times Business section this morning, there is an article by Roger Vincent speculating which pieces of Tribune-owned real estate, Tribune might sell, in order to pay down its heavy debt somewhat. At present, Vincent writes, Tribune only leases the old Times-Mirror Square, but it has an option to buy this property, and then could turn around and either sell or lease out the now mostly-empty Times-Mirror corporate headquarters. The Times, he writes, is likely to stay where it is in the older buildings on the famous Square.

There's quite a bit about the various options for the Tribune Tower in Chicago. Zell has already indicated he will sell the KTLA Studios in Hollywood, and there are opportunities for sales in Baltimore and elsewhere. Zell has vowed to sell the Chicago Cubs, maybe even before the start of the next season.

All this is interesting, but a small article in yesterday's New York Times piqued my interest more about Zell's plans, since it dealt with the future editorial page editorship of the Baltimore Sun, one of Tribune's big newspapers, and I think the real proof in the pudding about Zell will be what he does with his newspapers editorially.

There is no indication in the NYT article whether Zell had anything to do with the decision to take the editorial pages at the Sun out of the hands of the publisher and place them under the control of the top news editor. The NYT writes that this is an "unusual step," but I don't think it is, in light of the history of the L.A Times in this respect.

For many years, the L.A. Times editorial pages were under the direction of the paper's editor, although it was always understood that on endorsements of major candidates for public office, the publisher would have his say. When I first came to the paper in 1965, and for many years thereafter, there was a meeting each morning at which all the major news editors were present for a discussion and review on which editorials were to be presented the next day.

This has now changed. When he was editor, the strait-laced Dean Baquet did not want control of the editorial page, and it was vested in the hands of the publisher. It was Jeff Johnson who fired the hapless Michael Kinsley as editorial page editor, and, later, it was the new publisher, David Hiller, probably with the approval of the Chicago bosses he listened to so assiduously, who chose Jim Newton as the new Times editorial pages editor. Since then, Newton has reported to Hiller, who might be responsible for some of the goofier stands the paper has taken recently.

The argument for vesting control of the editorial pages under the paper's editor is that he might be better in tune with the interests of the community the paper serves than a publisher who is, after all, a businessman responsible for selling advertising, and conducting the paper as a business.

The New York Times wrote yesterday in the short piece signed by media writer Richard Perez-Pena that, "Newspapers usually try to keep a firm wall between the news-gathering operation and the editorial side, to make sure that the lines do not get blurred between the pages of objective journalism and the pages that explicitly voice opinions. But the Baltimore Sun is changing its system and has dismissed its editorial page editor."

At the Sun, Dianne Donovan, who headed the paper's editorial page for almost six years, was dismissed, her deputy, William Englund took a buyout, and control of the editorial pages was given to Tim Franklin, editor of the Sun. He will choose the next editorial page editor.

It is not, regardless what Perez-Pena suggests in the New York Times, the case that vesting control of the editorial pages in the news editor creates an insuperable conflict of interest, judging from the fact that this is the way it was long done at the L.A. Times and caused few if any problems. At the New York Times, in fact, there's a problem with the editorial pages, where the editor, Andrew Rosenthal, has become very shrill (and may even, next week, be named by this blog "Mistaken Journalist of the Year" for his repeated screeching for a precipitate withdrawal of U.S. forces from Iraq).

The question is, is the move at the Baltimore Sun, being generated by Zell, or is this simply a reflection of his pledge the other day to let decisions at the various Tribune papers be made by local executives?

Maybe the latter, but the fact is, we don't know. We're going to have to watch in the weeks ahead to see whether similar moves are made at other Tribune papers.

Certainly, I would like to see Hiller give up control of the L.A. Times editorial pages to James O'Shea, who seems to have better news judgment.

Zell Cuts Hiller Some Slack, At Least For Now

Peter Ueberroth, head of the 1984 Olympics effort in Los Angeles, used to say that authority has to be 80% taken, that it is only 20% given. Authority, in other words, comes as it is self-asserted. Ueberroth was successful as president of the Los Angeles Olympic Organizing Committee because he did that.

His comment about authority is pertinent today apropos of statements made by Sam Zell in his first day as full owner of the Tribune Co., about David Hiller, for the past year publisher of the L.A. Times. Zell is quoted in an article by James Rainey today as saying that he intends to leave Hiller in place. He called him "a terrific leader." Also, he said, editor James O'Shea, also appointed last year, will be left in place. Both men, according to this and other statements by Zell, will get more power and be held more accountable than in the past.

Always, with the past policy of centralized authority in the Tribune Co., Chicago executives have called the tune in Los Angeles, and Hiller and O'Shea have given appearances of being on a short leash. They maintained their ties to their Chicago origins, and Hiller's statements in particular so closely paralleled statements issued by publishers of other Tribune newspapers that it was apparent they had either been written or extensively coordinated by the Chicago headquarters.

So, will this change now? In his first statements yesterday as owner, Zell said it will.

But I strongly suspect that the new owner, and new board of directors -- a seven-member body that includes two Westerners -- will be watching carefully to see how Hiller and O'Shea actually do in the next few months in Los Angeles. If they do not appear to be grabbing hold and becoming innovative, they will probably be replaced. And the words used by Zell, "held accountable," may simply mean they are free to devise ways to improve revenue, and if they don't, they'll be out.

O'Shea is nearing the normal retirement age. He won't be around for a long time. But Hiller could be, if he takes the ball and runs with it.

So far, it has been hard to tell whether what Hiller said recently -- for instance about rolling back Times circulation to include a smaller area around Los Angeles -- represented his own views or those of the unlamented and now departed CEO, Dennis FitzSimons. When, for example, Hiller announced his plan to place ads on the front page of the L.A. Times, the same announcement came as regards other Tribune papers in Florida and elsewhere.

Now, if Zell is to be believed, we may hear more about what Hiller really thinks, and what his plans are. But if we don't, I think he will not last long in the new Tribune order.

Zell's appointment of a new board ends the dominance of the old board, which was mostly composed of insular Chicago businessmen. Already, while the new board will probably be under Zell's control, there are signs it is much less insular.

From the standpoint of the L.A. Times, it is particularly interesting that one business executive from Los Angeles and one from Las Vegas have been named to the board. The Los Angeleno is Jeffrey S. Berg, 60, chairman and chief executive of International Creative Management, a Hollywood talent agency with prominent clients, and Brian Greenspun, owner of the Las Vegas Sun and son of the well-known Hank Greenspun. Greenspun, Zell revealed, has a minority investment in Zell's commitment of $315 million to the new, privatized Tribune Co.

It is obvious that one thing to watch is whether Greenspun comes to have a role in the management of the L.A. Times.

But there is a good deal to watch besides. Zell continues to say he will not assert his own views in writing editorials. Again this morning, the copious L.A. Times stories about the new ownership do not even mention that Zell is Jewish, a supporter of Israel and a conservative Republican. Will his hands-off approach continue to be the case or not? We'll have to watch what he does, not what he says.

For the time being, though, those of us who are interested outside observers, have to cut Zell some slack ourselves. He has been highly successful in life, and, as Hiller said yesterday, it's encouraging that such a successful entrepreneur is a believer in the future of the newspaper business.

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Developments in Los Angeles sports are depressing. The ignorant and insular Coliseum Commission continues to stall, as it has so often in the past, on its talks with a major tenant over the future, in this case USC. The commission has no resources of its own to renovate the Coliseum. It simply must give way to USC. Meanwhile, UCLA is muddling along in its search for a new football coach, interviewing mediocrities, and the Los Angeles Dodgers have shown once again they just don't get it, signing a player named just last week as having taken illicit steroid body building materials. The city, meanwhile, is left without a guaranteed stadium for USC to play in, a guaranteed coach for the other major school, and guaranteed integrity for its professional baseball team.

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.

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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.

Zell, About To Take Over, To Axe FitzSimons

Sam Zell, about to take over the Tribune Co., is making the first of a series of necessary moves. Three Tribune newspapers, the L.A. Times, the Chicago Tribune and the Baltimore Sun, all report today that the inept company CEO, Dennis FitzSimons, is on his way out. The L.A. Times story says possibly as soon as today. The Chicago Tribune story says maybe not for several days.

(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.

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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.