- The Washington Times - Wednesday, April 4, 2007

CHICAGO (AP) — Billionaire investor Sam Zell says he bought the Tribune Co. as a long-term investment and sees having the right content as the key to the company’s success.

“If you are relevant, people are going to buy the newspaper,” he said in an interview with Chicago Tribune business editors and reporters. “If you’re not relevant, then people will stop buying the newspaper and stop advertising, and we’ll all be in a stew of trouble.”

Mr. Zell, who won a down-to-the-wire bidding war Monday, will acquire Tribune Co. in an $8.2 billion buyout that calls for him to invest $315 million and become chairman. The company owns and operates 11 daily papers, including the Chicago Tribune, the Los Angeles Times and the Baltimore Sun, as well as 23 TV stations and the Chicago Cubs baseball team.

The company spent six months soliciting bids and considered a competing offer from Los Angeles billionaires Eli Broad and Ron Burkle.

Mr. Zell told the Chicago Tribune for a story published yesterday that after it appeared his offer would go through, Mr. Broad contacted him and proposed joining him as a business partner. Mr. Zell said he told Mr. Broad he would not consider it until the deal was complete.

The next day, Mr. Zell said, Mr. Broad and Mr. Burkle sent Tribune a letter saying Mr. Zell had an unfair advantage.

“If somebody calls me and says I want to be a partner and the next day tries to stick a knife in my back, tell me again why I would want to do business with him?” Mr. Zell said.

Mr. Broad declined to comment on Mr. Zell’s remarks.

Mr. Zell has laid out details of an employee stock ownership plan (ESOP). The ESOP, which resembles a profit-sharing plan, will become the majority owner of Tribune once the deal is complete.

But he didn’t give details on structural changes.

“To be honest with you, I don’t know anything about job cuts,” he said. “My focus is not to look at this thing and see how we can eliminate one more table leg because, frankly, eliminating a couple more of this or that isn’t going to make this work. What’s going to make this work is raising revenue.”

Earlier this week, Mr. Zell, who owns part of the Chicago Bulls basketball team and White Sox baseball team, announced he would sell the Cubs at the end of the season. In the interview, he said he might sell Wrigley Field separately.

Mr. Zell, who has a home in Malibu, Calif., also said that he is “more familiar than I would like,” through press accounts, with turmoil at the Los Angeles Times, which is on its third publisher and third editor since being acquired by Tribune seven years ago.

“My sense is it’s a cultural and a locational issue as much as it is anything else,” Mr. Zell said.

The deal’s relatively small breakup fee of $25 million leaves open the possibility of another bidder coming in with a new offer, and Mr. Broad and Mr. Burkle have been reviewing their options.

While Mr. Zell has signaled that he doesn’t intend to break up the company, others remain interested in buying individual assets if they are made available. Among them is billionaire media executive David Geffen, who told reporters this week he remains interested in buying all or part of the Los Angeles Times and hopes to meet with Mr. Zell.

Tribune shares rose 8 cents to $32.76 in trading on the New York Stock Exchange.

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