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Zell says that the entire newspaper industry, including Tribune, has seen a crash in revenue, and that "nobody can survive." [I'm thinking they are so happy they got their $70 million out after they bankrupted the company]
Sam Zell: No Newspapers Can Survive
businessinsider.com - 3 weeks ago - 329 views
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People: Sam Zell
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Let's see, I believe Zell put $250 million up to "buy" (actually control) the Tribune Co. and the failure will net the people who helped to put it in bankruptcy (remember it continued to make an operations profit, it was the debt that did it in) $70 million. Plus Fitsimons, $40 million; Scott Smith $10.2 million, Don Grenesko $10.8 million, John Reardon $4 million, Crane Kenney $3.6 million, and the employees get a small percent of the disaster. The total cost to the Tribune and its employees? Immeasurable.
As Zell told Tribune employees, he won't be hurt if the deal goes sour. A short list of other people did just fine with it too.
A fascinating segment of our inland shark species, which always seems to flourish, somehow.
Chicago Tribune circulation lags behind the financially-savvy Wall Street Journal for a variety of reasons, including the paucity of first hand reporting on the nation's finances. What distinguishes many Wall Street Journal reporters & editors from their contemporaries is a passion for explaining the complexity of financial & economic analysis to a better educated reader.
To paraphrase the gun lobby, business owners aren't always to blame for "bankrupting" enterprises such as the Chicago Tribune. The free market "creative destruction" which sinks print advertising sales launched a multi-billion dollar Internet advertising industry. The results were bad for print journalists, but very good for Internet bloggers.
What probably frustrates many Big Ten & Ivy League journalism school graduates is that this shifting demand for new media has diminished the value of those credentials which narrowed the field of competitors, ensuring employment interviews, internships & gainful employment. What's most painful for many displaced from their careers is that the change in advertising media has deprived many of employment while advancing the careers of middling school graduates whose family financial resources or academic preferences failed to create an old school, gilded career track.
I'm humbled to find myself separated by a single degree from the family of ambitious Chicago businessman Sam Zell. In spite of his financial challenges, his past successes remain legendary in the real estate investments.
"What's most painful for many displaced from their careers is that the change in advertising media has deprived many of employment while advancing the careers of middling school graduates whose family financial resources or academic preferences failed to create an old school, gilded career track."
What do you mean here? What sort of careers are you referring to? Even the most successful student who goes into journalism knows they're leaving money on the table in pursuit of a semi-glamorous profession.
Journalists are forced to develop a broad range of expertise on a variety of topics, so, by definition, journalism school graduates always "leave money on the table."
The free market's "creative destruction" has disrupted many success notions. Having attended both a Big Ten school (with STMG Guild President Lynn Stiefel) as well as so-called "middling schools" (with Chicago Department of Water Resource spokesman Tom LaPorte), I have discovered impassioned individuals whose talents might have taken them to the highest reaches of our profession. Traditionally, many big city editors & news directors favored the former over the latter graduates as class re-unions might confirm.
I think "creative destruction" is possibly considered an "old school" term. The new technocrats prefer "disruptive technologies."
qstrain, there are a few issues I have with your post. First, you assume that the internet is responsible for the circulation decline in newspapers, "the free market "creative destruction" which sinks print advertising sales launched a multi-billion dollar Internet advertising industry. The results were bad for print journalists, but very good for Internet bloggers."
Studies of the circulation decline indicate that much of it is due to the newspapers terminating distribution in high cost markets. For example, the Chicago Tribune pulled out of much of Michigan, Central and Southern Indiana, Southern Illinois, Iowa, Northern Michigan and from out of town markets under now publisher Tony Hunter.
The second factor effecting newspaper circulation is increased prices. For example, the Chicago Sun-Times had a price increase of 25 percent earlier this year and suffered a 12 percent decrease in circulation. The company has tied these two events together in its discussion of circulation recently released by ABC, the FAS-FAX report.
The third issue is the declining value of newspapers to everyday readers. This is a long-term decline. How long? The Chicago Tribune enjoyed its highest circulation figures in the 1940's. Although such competitive actions such as the development of Craigslist were destructive of revenue streams, the correlation between the growth of the Internet and the decline of newspaper circulation is lower than popularly imagined.
Comparing the Wall Street Journal, with distribution in markets throughout the country and overseas to the Chicago Tribune, with a potential market of just about 10 million (?) is interesting. Which newspaper do you think has a higher penetration into the local market? This is an apples and oranges comparison.
Now, the second thing I'm taking issue with is the term "Big Ten & Ivy League journalism school graduates". I'm not a Big Ten or an Ivy League graduate, but I have to think that there are other people at work at the Chicago Tribune than people from these athletic conferences. After passing through the initial job interview, how many times has your education been discussed for promotions? By the way, now that you bring it up, I'm sorry you attended a Big Ten school. You should have done what I did and attend a Big Eight: We're more elite. ;) But in any case, assigning an intelligence to newspaper readers, well, I'd like you to link to any studies about that.
About Sam Zell, "his past successes remain legendary in the real estate investments". As the boilerplate of just about any investment says, past performance is not indication of future performance. You're falling into a trap that many financial journalists fall into, assuming that a business success is due to some sort of genius.
Perhaps. Perhaps not. Zell kept on talking about how he was going to clean the cobwebs out of Tribune Tower. Pretty soon they'll be repainting his office and putting a new name plate on the door. Zell was abusive, conceited and wrong. This time I'm dead serious: I'm sorry you're related to him. But I won't hold it against you.
Long story short, which came first, chicken or egg? Most people consider the downward spiral to be the symptoms and the internet to be the "disease." And I'm out of metaphors, for the moment.
Motioning up, Patrick_Boylan?
I disagree with Zell. I don't think many major urban local papers can survive the way they used to. Sadly, I think reporters and journalists are going to have to work far more for passion than for money now. Also I think that we will see more that one or two major paper will feed the country on international news, and some local as seen with NYT's recent strategy.
I think there is an opportunity for more hyper local publishing though. There could easily be a small paper for smaller sections of Chicago. The issue with the Tribune I felt was that it covered too much for the audience. They tried to make all of Chicago happy, when all of Chicago doesn't care about all of Chicago. The huge news will still land in the local section of the NYT but all the neighborhood news won't. There will be an opening for start ups to focus on smaller areas of Chicago, in smaller papers, with smaller teams.
The giants can't survive. The dinosaurs were wiped out, but the small rodents and insects survived the extinction. A few left over giants continued to exist, but for the most part everything gets smaller. That is entropy. Everything will break down into smaller and smaller pieces. I think the same will happen here.
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