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Zell: Tribune Buy a 'Mistake'

By Prescott Carlson in News on Apr 16, 2009 5:00PM

When we were younger, our friend told us about a car his older brother was selling for the low price of $900. Sure, it looked a little ragged, what with the rust holes and the mismatched door, but we were assured that at its heart the car was solid, and could be revived back to its shiny, reliable former self with just a little bit of elbow grease. Six months later, after being stalled on the side of the road for the third time, we wound up giving it away to that cancer foundation with the annoying jingle. Well, Sam Zell is feeling the same way right now, except his error in judgment contained seven more zeros. In an interview with Bloomberg Television yesterday, Zell said that he now thinks that his acquisition of the Chicago Tribune was a "mistake" and that he "was too optimistic in terms of the newspaper's ability to preserve its position." Huh, a business guy with zero experience in the newspaper industry was wrong about the direction said industry was heading -- imagine that.

The writing was clearly on the wall when the Tribune Company found itself needing to file for bankruptcy reorganization last December, a scant year after Zell took ownership of the company. Zell seems determined to press on, however, and is considering various ways to keep the paper afloat:

“I think we’re looking at every option at the Tribune Co.,” he said. “It’s very obvious that the newspaper model in its current form is not working. And the sooner we all acknowledge that the better. Whether it be home delivery, whether it be giving content away for free, I mean these are critical issues.”

Pressed as to his thinking on home delivery, Zell commented, “We are looking at everything because in effect the future of the newspaper industry is at risk today.”

The most likely delivery cuts would be Mondays and Tuesdays, which have the lowest circulation. What's been pointed out, however, the sticky wicket in reducing delivery is the fact that the Sun-Times seems to be the commuter paper of choice, not the Tribune -- a large chunk of the Trib's circulation numbers are from delivery, not newsstand sales. We're rooting for you, Mr. Zell -- if for nothing else, we need at least one daily paper to stick around. [S-T]