84. Tribune Media

Revenues 2016: USD 1.948 billion (€ 1.760 billion)

Overview

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The Tribune Company is a traditional media company based in Chicago. In early 2008, the company was taken over by real estate mogul Sam Zell but it suffered from a breakdown only one year later as a result of the enormous burden of debt and had been on a state-supervised journey out of bankruptcy. After the spin-off of its loss-generating newspaper Segment, Tribune has found its footing again.

General Information

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Headquarters:
435 N. Michigan Avenue, Chicago IL 60611, USA
Telefon: 001-312-222-9100
Telefax: 001-312-222-1573
Internet: www.tribune.com

Branche: Fernsehsender, TV-Sendestationen, TV-Produktion, Internet, Radio,
Legal form: Aktiengesellschaft (wird von der Börse genommen)
Financial Year: 01.01. - 31.12.
Founding year: 1847 (Chicago Daily Tribune), 1861 (Chicago Tribune)

Revenue Tribune Media Company 2016: 1.948 Mio. USD
Revenue Tribune Media Company 2015: 2.010 Mio. USD
Revenue Tribune Media Company 2014: 1.949 Mio. USD

Table I: Business Performance, Tribune Company ($ Mio.)
2013201220112010200920082007200620052004
Revenues 2.9033.1453.1053.1803.2005.4005.0635.5175.511,35.726,2
Net profit24242244887,0594,0534,6573,3

 

 

 

Executives and Directors

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Management:

  • Peter M. Kern, Interim CEO
  • Chandler Bigelow, EVP and CFO
  • Edward P. Lazaru, EVP, General Counsel, Chief Strategy Officer and Corporate Secretary
  • Larry Wert, President, Broadcast Media
  • Dana Zimmer, President, Distribution
  • David Ulmer, Chief Technology Officer
  • Gary Weitman, SVP, Corporate Relations

 

Board of Directors

  • Bruce A. Karsh, Oaktree Capital Management
  • Craig A. Jacobson, Hansen, Jacobson, Teller, Hoberman, Newman, Warren, Richman, Rush and Kaller L.L.P.
  • Peter M. Kern, Hemisphere Media Group
  • Ross Levinsohn, Los Angeles Times
  • Peter E. Murphy, Wentworth Capital Management
  • Laura R. Walker, New York Public Radio

History

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The media company’s contemporary flag ship, the traditional newspaper Chicago tribune was founded in 1847 by James Kelly, John Wheeler and Joseph Forrest as Chicago Daily Tribune. The decisive factor for the newspaper’s development however had been Joseph Medill, the editor-in-chief and co-owner who became a part of the company in 1855. Under the direction of the firm republican Medill, the Chicago Tribune went on to become one of the most important conservative daily newspapers in the country. In 1914, his two grandsons, Robert McCormick and Joseph Patterson took over the leadership of the company. While Patterson went to New York in 1919 in order to found the New York News (later Daily news, sold in 1991), McCormick continued to build up the Tribune and made it the ‘World’s Greatest Newspaper’, as the company tends to describe itself. The acronym WGN later became shorthand for the various Tribune radio and television stations. The first WGN radio station became part of the company in 1924 and the first television station followed in 1948. At the time of his death in 1955, McCormick left behind a company, which disposed of sturdy mainstays in both the television and newspaper sector.

The company continued to extend its television activities through the acquisition of further TV stations (Denver 1965, New Orleans 1983, Atlanta 1984 and Los Angeles 1985). Furthermore, the Tribune Company took over the legendary and traditional baseball team Chicago Clubs from chewing gum millionaire William Wrigley in 1981. During the 1990s, the company focused on diversification and strengthened the education division, buying the publishers Contemporary Books (1993), The Wrig Group (1994) and Educational Publishing (1996). When the Internet began to emerge, the Tribune purposefully involved itself in the new growth market. In 1995, the company became involved in the WB Network as well (Warner Bros. Network), which was still in its infancy back in the day – an investment that turned out to be more than prosperous. The company acquired Renaissance Communication in 1997 for 1,13 billion $ and concluded further acquisitions of individual television stations.

In 1999, Tribune management bundled its Internet activities under the new roof of Tribune Interactive. Over the course of the restructuring and the sale of the ‘educational’ business branch in 2000, ‘Interactive’ was expected to become the third pillar next to production and distribution. However, Interactive was reintegrated into the publishing division in early 2003. At the same time, drastic saving measures led to a massive decline in the number of employees. Tribune also discharged almost all of its radio stations. Nowadays, it is primarily the growing Latin and Hispanic part of the citizenry that constitutes new market chances for Tribune and its classic newspaper-publishing division in the USA

In 2000, the Tribune prepared itself for the largest acquisition in the history of the company thus far and took over the competitor Times Mirror (and its flagship, the Los Angeles Times) for a price of approx. 8,3 billion $. At the same time, the educational division was pushed off and sold to McGraw-Hill Companies for 686 million $.

In late 2007, US-American real estate tycoon Samuel Zell emerged victorious from a take-over battle over Tribune that was trigged by the shareholders’ discontent. The acquisition price amounted to 8,2 billion $ and the Tribune shareholders were supposed to get 34 Dollar per share. Zell only contributed 315 million Dollar to the transaction and the remaining billions were financed by means of debts. Tribune was removed from the stock market. An equity fund by Tribune employees held all the shares once the transaction had been concluded. Zell became member of the board of directors and chairman of the supervisory board after the merger.

Due to interest payments and more banking fees, the debt rose to 13 billion US-Dollar in 2009, which finally forced the company to file for bankruptcy. Ever since Zell has been running Tribune, more than 4000 employees lost their jobs. The newspapers and television stations have to make do with a budget that is many times smaller than before. Zell also appointed the CEO Randy Williams, a former radio manager who deeply poisoned the company structure with his sexist & chauvinist demeanour – he has been sacked since. At the moment, the company tries to find its way out of the biggest bankruptcy in the history of the US-American media industry - one step at a time.

Management

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There had been no reservations when Sam Zell suggested to the banks that he would take over the deficitory company with the banks’ money, despite the fact that the construction tycoon had no experience in the newspaper sector whatsoever. Zell’s plan, to lead Tribune back onto fertile lands by means of rigid saving measures and mass dismissals was a sublime failure. The readers and employees met Zell’s extroverted behaviour as well as many of his ideas regarding the salvation of the company – he planned to slip product placement into editorial content (among other things) – with incomprehension.

According to Zell’s view on the matter, the previous management was comprised of ‘bureaucrats’ lacking ideas, while calling himself the ‘new sheriff in town’ in company memos at the same time. Subsequently, the ethic standards of Tribune’s newspapers were discarded and the company gradually manoeuvred into a dead end.

One of Zell’s first official acts was to appoint Randy Michaels, a former radio presenter and manager of Clear Channel, as the CEO of Tribune. Michaels filled more than 20 leading positions with confidants from the old radio days and turned the company structure upside down. Michaels had informed employees in good time that they could expect a ‘funny’ work atmosphere. How exactly this special atmosphere had to be interpreted is something that the female employees in particular had the dubious pleasure to experience first hand. Thus, Michaels openly discussed the sexual suitability of specific female employees with his colleagues, for everyone’s listening pleasure. Another legendary incident took place in 2009, when the smoke alarm on the 24th floor was caulked and the top-management enjoyed a round of poker with Whiskey and cigars. The event became a PR disaster when a Michaels-confidant published photographs from the party on his Facebook page. Although the company’s performance took a turn for the worse between 2009 and 2010, Zell’s scandalous posse granted themselves bonuses and wages worth 150 million US-Dollars during that very period.

Because of this and several other cases of misconduct, Michaels and his confidants were fired in the autumn of 2010. His successor and new CEO was Eddy Hartenstein, the publisher of the ‘LA Times’ and former CEO of satellite provider DirecTV. Following Michael’s dismissal, everyone expected some tranquillity to step foot into the once so sophisticated media company. Yet, in June 2011, James O’ Shea’s book ‘Deal from Hell’ caused quite some upheaval. In his work, O’Shea, former editor of the ‘Los Angeles Times’, describes how banks and investors enrich themselves at the cost of employees. The crux being the fact that the banks involved (JP Morgan, Citibank, Bank of America) should never have agreed the sale to Sam Zell by means of credit in late 2007. It seems that all parties involved had been well aware of the fact that Tribune would soon collapse under the heavy debt. Nevertheless, the banks gave both thumbs up. During his research, O’Shea discovered one particularly hairy email by a female banker who elaborates on her strategy regarding the Tribune: "suck $$$ out of the dying client's pocket".

Business Fields

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Tribune is active in the business fields of newspapers, television, radio and Internet. 

Newspapers
Apart from traditional newspapers ‘Los Angeles Times’, ‘Chicago Tribune’ and the ‘Baltimore Sun’, nine further newspapers are part of Tribune’s portfolio, including the ‘Hoy’ (in Spanish) and ‘El Sentinel’ from Orlando/Florida.

Television
Tribune operates 25 television stations in 18 major US cities

Radio
The only remaining Tribune radio station is WGN-AM from Chicago

Websites
ClassifiedVentures.com, CareerBuilder.com, Apartments.com, Cars.com, ForSaleByOwner.com, HomeFinder.com.

You can find a complete list here.

References

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Content

Institute of Media and Communications Policy

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Media Pluralism in Europe

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Partners

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Mediadb.eu is funded by medienboard Berlin-Brandenburg,

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the Open Society Foundations' Media Program,

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Germany's Federal Agency for Civic Education,

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the Rudolf Augstein Foundation,

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the city of Cologne, Germany,

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and the State of Thuringia, Department of Commerce.