I don’t know what to make of the business situations of the two Chicago major metro newspapers these days, other than to figure out that someone is determined to bleed them dry of every last cent before letting them wither away.
It has been this week that two stories have managed to creep their way out of halls in which both newspapers are in Bankruptcy Court.
WE LEARNED THAT Sam Zell, the real estate developer who took on more than he could chew by buying the Tribune Co., could wind up being dumped from his prime spot in the restructuring of the company.
Meanwhile, it became known that over at the Sun-Times, there is a list of 20 executives who think they’re entitled to $1.8 million in executive payouts – regardless of what happens to the newspaper itself.
First, we’ll take the latter.
The owner of the Sun-Times and all those suburban newspapers they purchased during the past two decades asked for permission to pay the bonuses in the event the company is sold.
NATURALLY, THEY FOLLOWED the typical sense of business ethics – they asked for the terms of the deal to be kept under seal. So we don’t know who the 20 executives are, or how much of the $1.8 million each of them would receive.
But from the little we do know (largely because of Crain’s Chicago Business), it would be 40 percent of the executives’ base salary.
The reason this came out is the fact that the Sun-Times has been in Bankruptcy Court since March. This deal will need a judge’s approval in order to occur.
For once, we should all be grateful for the Internal Revenue Service, which already has issued an objection to the idea of these executives getting a bonus at all and that the specific amounts of the bonuses should be secret.
THIS IS ONE of those times when a newspaper company winds up looking hypocritical.
For if any other business (particularly one that has engaged in so much staff cutting in recent decades) were to try to pull a move like this, the papers would be doing everything they could to get at the information kept under wraps, then would be engaging in editorial rants meant to get the public stirred up.
They definitely wouldn’t care much about the argument that Sun-Times lawyers are likely to make when the case comes up again in Bankruptcy Court for a hearing on Wednesday – public knowledge of these bonuses would harm the company’s ability to find a buyer.
Only if a would-be buyer would be offended that part of his purchase price was going to ensure that all the people whose professional performance were unable to raise the newspaper from its problems would it be considered a hindrance.
PERSONALLY, I DON’T know what to think of what will become of the Sun-Times, although it has become fashionable among some people (including one-time Sun-Times owner Rupert Murdoch a couple of weeks ago) to predict that the Sun-Times is finally going to die off – putting it in the ranks of the Daily News, the American and the dozen or so other newspapers that have existed in Chicago throughout the years.
I’d like to think it could survive in some form because I still find its news product interesting to read and worthwhile to have.
Of course, to many of the people who are in the newspaper business these days, the “product” is about the last thing they care about.
That is the perception many have gained about Zell, who likely bought his way into the Tribune Co. thinking he could prolong its life with a few cuts, bleed a few dollars out of it, then close it off someday.
YET THE ECONOMIC events of the past year have hit newspaper advertisers so hard that he wasn’t able to bleed those bucks out of it that would have made the whole venture worth his time.
Which is what makes (to my mind) the recent reports about Tribune Co. (in bankruptcy court since December) so intriguing.
Control of Tribune Co. could be shifted from Zell and his group to a group of banks and investors. It appears that Zell would be out, unless these financiers see a specific reason to keep him on.
It’s not like he knows anything specifically about the news business, so some think he will be gone. Personally, I noticed a slight sense of glee in the reports that ran this weekend in the Chicago Tribune itself.
IS IT “DING, dong, the wicked witch is dead” at Tribune Tower these days? Or will Zell turn out to be some sort of fighter who will want to stay on to try to prove he’s not some sort of newspaper nincompoop?
Why do I believe that, for the right amount of money, Zell’s ego could be massaged just enough to leave. Could it be that the amounts of money the Sun-Times executives may receive will set a standard, so to speak, for how much Zell should get to go away from the one-time World’s Greatest Newspaper.
And if it really happened that way (it’s just my guess, at this point), could it be that only the guys on top make money, while the rest of us Chicagoans wind up a little bit information-less about the Second City.
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