by James O'Shea
284 But Dimon wasn’t about to shaft a major customer United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; JPMorgan Chase interoffice e-mail from Jamie Dimon to Darryl Jacobson, September 6, 2007.
284 One Deutsche Bank analyst concluded United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
284 But Dimon disagreed: “Sam until very ” United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; examiner’s interview of Jamie Dimon, chairman and CEO, JPMorgan Chase, New York, June 25, 2010.
284 Zell claimed that he hadn’t invested United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; examiner’s interview of Samuel H. Zell, Chicago, IL, June 14, 2010.
284 The internal math on the deal put Zell’s rate of return United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
284 When Tribune’s stock dropped to $25 a share, United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
285 Analysts at the lead banks suddenly became quite interested United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
285 prompting Yang Chen at Citicorp to United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
285 Things got pretty sticky. At Tribune, the United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
285 Not long after the Tribune had hired VRC, Citicorp United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
286 after Rajesh Kapadia from JPMorgan Chase told Larsen United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
286 Tribune’s general counsel, Crane Kenney United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; deposition of Crane H. Kenney, former general counsel of Tribune, Chicago, IL, July 8, 2010.
286 Ben Buettell, one manager at Houlihan Lokey Howard & Zukin United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; deposition of Ben Buettell, December 2, 2009.
287 penguins called Our Iceberg Is Melting. Our Iceberg Is Melting, by John Kotter (New York: St. Martin’s Press, 2006).
288 “You are on the board, you sit on the board. . . .” United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; examiner’s interview of Samuel H. Zell, Chicago, IL, June 14, 2010.
288 Afterwards, FitzSimons let Zell know he was dealing with someone United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; deposition of Dennis J. FitzSimons, Chicago, IL, June 25, 2010.
289 “I’m not doing anything. I’m not giving you any power . . .” United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; examiner’s interview of Samuel H. Zell, Chicago, June 14, 2010.
289 Behind the scenes, he had asked his trusted aide United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; memorandum labeled, “Tower Strategy,” to Sam Zell from Bill Pate, August 9, 2007.
289 1990s. He asked Michaels to come up United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; e-mail from Randy Michaels to Sam Zell, August 20, 2007.
290 “Begin the process of creating products focused on consumer . . .” United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; e-mail from Randy Michaels to Sam Zell, August 20, 2007.
290 including the late Warren Christopher, Author’s recollection of luncheon. The author attended the lunch and took notes on the proceedings.
Chapter 18: Closing the Deal
296 In August, the lead banks—JPMorgan Chase United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
296 The response triggered more back and forth between United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
297 “We are clearly dealing with an organization at all . . .” United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; Merrill Lynch interoffice e-mail from Todd Kaplan to Michael Costa, November 7, 2007.
297 By having their lawyers hire the expert, the banks draped a United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141. Deposition of Crane H. Kenney, former general counsel of Tribune, Chicago, IL, July 8, 2010.
297 But Tribune CFO Don Grenesko and Chandler Bigelow United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
298 At one point, the banks sounded each other out and learned that United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
302 VRC, under pressure United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
302 After much to and fro United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; Deposition of Nils Larsen, managing director, Equity Group International, July 7, 2010. Larsen told Bankruptcy Examiner Kenneth Klee that he didn’t promise Bigelow the job of CFO but that he did suggest Bigelow had a good future with the new owners. “I’m sure that he would have gotten the sense from conversations with me that I thought that he was a valuable member of the team,” Larsen said.
303 “Just had a long talk with Sam. . . .” United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; JPMorgan Chase interoffice e-mail from James Lee to Jamie Dimon, December 19, 2007.
303 Lee’s boss, Dimon, later United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141; examiner’s interview of Jamie Dimon, chairman and CEO, JPMorgan Chase, New York, NY, June 25, 2010.
303 Zell said he knew the bank United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
304 On December 20, 2007, at 12:02 p.m. United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
304 The banks wire-transferred funds to Tribune, which disbursed about United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
304 performance was off just 2 percent from its plan, the ESOP would have United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
304 But FitzSimons had reason to be even happier. United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141, and news reports in the Chicago Tribune and other newspapers.
305 Many of his friends in the company did well, too United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
305 On Wall Street, the banks and their advisers United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
Chapter 19: Zell Hell
315 the Los Angeles Times quoting Zell saying Zell e-mail to author, January, 23, 2008.
317 In 2007, the Times generated nearly $200 million in cash flow, off Tribune Company Form 10-K for fiscal year ended December 31, 2007 and author’s recollection as recorded in his diary.
317 Zell compared the Times, which had survived for 126 years Video, “Sam Zell Visits the Los Angeles Times,” February 7, 2008. Zell visited the Los Angeles Times printing facility, where he spoke with employees.
318 The whole exercise seemed like a scene out of Video, “ Tribune Owner, Sam Zell, Says F#@k You” Visits Orlando Sentinel,” January 31, 2008.
318 By the time Zell and Michaels showed up Tribune Company interoffice e-mail passed on to the author by anonymous sources, February 27, 2008.
320 Lipinksi’s first doubts about Zell surfaced during Author’s interview with Ann Marie Lipinski, Chicago, IL, winter 2010.
321 Proud of his heritage as a Latino and loyal to Author’s telephone interview with George de Lama, summer 200
9.
322 but she remained determined to see the Author’s interview with Ann Marie Lipinski, Chicago, IL, winter 2010.
323 Complaints of sexual harassment, crude jokes, and boorish behavior dogged Michaels Right of the Dial: The Rise of Clear Channel and the Fall of Commercial Radio, by Alec Foge (New York: Faber and Faber, 2008).
323 The hundred-day Tribune plan Michaels United States Bankruptcy Court, Report of Examiner, Kenneth M. Klee, Case Number 0813141.
324 In all, in less than a year, Michaels hired into senior positions Author’s telephone interview with Mary Jo Mandula, winter 2009. Mandula was the building manager at Tribune Tower.
324 Michaels’ most celebrated hire was Lee Abrams “Lee Abrams Joins Tribune as CIO,” Arbitcast: All Things Satellite Radio, March 11, 2008.
325 “Talk to Sam” e-mail box for employees Transcripts of TalktoSam Messages, December 2007–February 2008. Employees were unaware that Zell’s e-mail messages were sent to their supervisors.
326 forcing him to order deep budget cuts and layoffs “Tribune Company Announces Hundreds of Job Cuts,” Associated Press, February 13, 2008. Although Zell told Tribune employees that the company could not cut its way to prosperity, he began eliminating jobs and cutting the space for news soon after he took over.
326 He commissioned jukeboxes, pinball Author’s interview with Mary Jo Mandula, winter 2009.
327 Even Kern called Lipinski and said Author’s interview with Ann Marie Lipinski, Chicago, IL, winter 2010.
328 “The Perils of Modern Journalism: Should Political . . .” Author inspection of the sign after it had been removed from Tribune Tower.
329 After another lunch in his office, Zell Author’s interview with Ann Marie Lipinski, Chicago, IL, winter 2010.
331 In December 2008, the Tribune Company “Tribune Company Files for Bankruptcy,” by Dealbook, December 8, 2008.
Epilogue
336 In Chicago, Zell had turned his attention “Sam Zell’s Deal from Hell,” by Emily Thornton, Michael Arndt, and Ronald Grover, Business Week, July 30, 2008. In this and other pieces, Zell said his investment in Tribune Company was a mistake, one that he labeled “The Deal from Hell.”
336 Heavily promoted stories about fake food The stories and promotions cited by the author appeared on page one of the Chicago Tribune on October 1 and October 8, 2008.
337 When one Tribune editor pitched Former Tribune associate managing editor for sports, Dan McGrath, was at the meeting in question and told the author about the decision, Chicago, IL, summer 2008.
338 Michaels used the Colonel’s office for a poker “Poker Party ‘des ecrates’ Tribune Tower Shrine,” by Robert Feder, WBEZ 91.5, July 2, 2010. The piece by Feder included four pictures and a narrative of the event by John D. Phillips, the Tribune Tower manager appointed to his job by Michaels. Phillips posted the event on his Facebook page.
338 A terrace on the twenty-second floor of Tribune Tower The incident involving the sexual tryst between the secretary and Michaels was first reported in an anonymous letter to the Tribune Company board. The author confirmed the incident with Mary Jo Mandula, who managed the building and oversaw the security services that employed the guard who discovered Michaels and the young woman. The author also confirmed the incident with another high-ranking security official at Tribune Tower, although the official discussed the incident and asked that his name not be used. The alleged “investigation” of the incident by an outside law firm dismissed the allegation in the letter because no one had filed a complaint with the Tribune’s human relations department, which Michaels had downsized. In his New York Times story of October 6, 2010, David Carr disclosed the incident but Michaels’ name was withheld.
339 “I feel compelled to report on some things . . .” Anonymous letter to the Tribune board of directors outlining the sexual trysts and the hiring of numerous friends by Michaels. The letter, dated December 11, 2008, was signed “Concerned Employee.” The author examined an e-mail that disclosed that a Tribune director was made aware of the substance of the letter. The author agreed to withhold details of the e-mail in return for examining it. The letter said that Michaels’ conduct was widely known within the company and Tribune Tower. The employee’s letter to the board contained numerous examples of Michaels’ antics.
341 Thomas E. Patterson, a professor of government “Doing Well and Doing Good: How Soft News and Critical Journalism Are Shrinking the News Audience and Weakening Democracy—And What News Outlets Can Do About It,” by Thomas E. Patterson, Joan Shorenstein Center on the Press, Politics and Public Policy, Cambridge, MA, December 2000.
343 The Pew Research Center’s Project for Excellence “How News Happens—A Study of the News Ecosystem of Baltimore,” January 11, 2010. The study by the Pew Center represents the only effort the author is aware of that attempts to document the true source of news in the age of the Internet.
343 the Sun has cut its newsroom by about 60 percent Author’s interview with sources knowledgeable about staffing levels at the Baltimore Sun. In 2004, the Baltimore Sun’s newsroom was composed of approximately 384 staffers, about two-thirds of whom, or 253, were members of the Washington-Baltimore Newspaper Guild, the bargaining unit for employees that were not management. By 2011 there were 98.
INDEX
A
ABC News
Abrams, Lee
Adams, John Quincy
Advertising, newspaper
business of
declining circulation and
Los Angeles Times campaign
monopoly control of
on page one
strategies designed for
Airlines, lack of emergency medical equipment on
Alford, Kael
American Express
American Society of News Editors
America Online
Brumback investment in
Madigan sale of
Time Warner merger with
Amin, Idi
Andersen, Martin
Anderson, Lisa
Annenberg, Max
Annenberg, Moe
Anthan, George
Arizona Daily Star
Arlington Heights Daily Herald (suburban Chicago)
Armstrong, Ken
Arnot, Bob
Arthur, John
Associated Advertising Club
Associated Press (AP)
Associated Press Managing Editors convention
Atlanta Journal and Constitution
Atorino, Edward
Audit Bureau of Circulations (ABC)
Brumback on
history of
newspaper connection to
purpose of
sales observations of
two percent list of
See also Circulation, newspaper
Avetisian, Chris
Aviation Medical Assistance Act
B
Babcock, Susan
Begley, Ed. Jr,.
Bailey, Charles
Baker, Cissy
Baker, Howard
Ballin, Hugo
Ballow, Robert
Baltimore Sun
Banar, Elaine
Bank of America
Baquet, Dean P.
AP Managing Editors convention speech (2006)
as centralization foe
foreign and national news staff reductions by
Los Angeles Times as national paper of the West
as Los Angeles Times managing editor
as New Orleans reporter
on “news hole” of Los Angeles Times
O’Shea replacing
Barry, Marion
Bartter, Brit
Baskes, Roger
Batista, Fulgencio
Bayonet, The (7th Infantry Division, U.S. Army)
Beck, Edward Scott
Beck Awards
Beiser, Scott
Benchmark Company
Bennett, Phil
Berg, Jeffrey S.
Bernstein, Carl
Bigelow, Chandler
Bilingual sections, of Los Angeles Times
Bingham family
Black Journalists Association
Blackstone Group
Blagojevich, Rod
Blau, Robert
Blogs
Deadline Hollywood
of Hiller
LA Observed
newsroom leaks to
Bloomberg News
Boudreaux, Richard
Boyarsky, Bill
Bragman, Howard
Breeze, The
Brennan, Robert
Breslin, Jimmy
Brin, Sergey
Brinkley, David
Broad, Eli
Brown, Geoffrey
Brown, Jeffrey
Brown, Jerry
Brown, Pat
Brumback, Charles T.
on ABC circulation numbers
accountant background of
America Online investment by
CLTV cable news channel started by
on computerization
distribution changes by
on journalistic and business separation
Madigan as successor to
New Century Network of
at Orlando Sentinel
productivity gains by
profit orientation of
Squires pressured by
on staffing levels
synergy demands of
Tribune Media Center and
Wall Street view of
Budget deficits, in Reagan presidency
Buettell, Ben
Burkle, Ronald
Burns, Greg
Bush, George H. W.
Bush, George W.
Bush, Vannevar
Business Week magazine
Buyouts, employee
C
Cable TV
California Club
Capital Cities Communications
CareerBuilder.com
Carey, Kevin J.
Carlyle Group
Carr, David
Carroll, John S.
Baquet hiring by
“Editing by referendum” comment on FitzSimons
Los Angeles Times as national paper of the West
Montorio hiring by
