By Daniel Zarchy
The journalistic world faces a shakeup in coming months, as the Tribune Company, the nation’s second-largest media conglomerate, changes hands. The company will go private, adding to the assets of real estate mogul Sam Zell.
The Tribune Company, established in 1847 with the Chicago Daily Tribune, owns 11 daily newspapers, 24 television stations, and many other assets, including the Chicago Cubs. Most prominent among its holdings are the Chicago Tribune, Los Angeles Times and New York Daily News.
Zell, chairman of Equity International and host to a fortune of roughly $4.5 billion, will pay about $315 million out of pocket for a 40 percent investment in Tribune, which will reform as a private company with Zell on its board of directors.
In a Tribune press release, Zell expressed his pleasure to work with Tribune.
“I am delighted to be associated with Tribune Company, which I believe is a world-class publishing and broadcasting enterprise,” Zell said. “As a long-term investor, I look forward to partnering with the management and employees as we build on the great heritage of Tribune Company.”
Jeff Cohen, longtime media critic and founder of the nonpartisan media watch group Fairness and Accuracy in Reporting, is skeptical about the Tribune’s new ownership, although he already takes issue with the Tribune Company.
“Tribune’s current ownership has been so atrocious that it’s hard to imagine worse, more anti-journalism ownership,” Cohen wrote in an e-mail to City on a Hill Press. “But every time I think we’ve reached rock-bottom, and can’t get any worse, it does get worse. Real estate guys and investment firms taking over news outlets is not generally good news.”
The massive sum of cash that Zell invested in the company raises a number of red flags in the journalism community, as many fear that he may go to extreme measures to recoup his investment.
John Nichols, Washington correspondent for The Nation magazine, is worried that Zell’s main concern is finding a return for his investment. According to Nichols, this goal could compromise the integrity of the newspapers owned by Tribune.
“The way that they get that return is not by improving the quality of journalism; I wish it were,” Nichols said. “I think it’s extremely unlikely that Zell will improve the quality of coverage or improve the quality of journalism. When you have chain ownership that is owned by investors, whose goal is to take money out of the operation, it’s very destructive.”
Critics argue that media companies attempting to make a quick buck might downsize staff, cut departments, limit resources to reporters, and altogether squeeze expenses in an effort to increase profit margins.
Nichols, a frequent writer opposing media consolidation and commoditization, explained that a better move for Tribune would have been a breakup, and that media outlets better serve the community when owned locally, rather than by a corporate entity.
“There are an awful lot of indications that [Zell] will be worse,” Nichols said. “He has no experience in journalism. If your goal in owning major daily newspapers is to make a fast buck, you will do damage to the quality of those newspapers. That’s an absolute guarantee.”
Conn Hallinan, analyst for think-tank Foreign Policy In Focus and former journalism lecturer at UC Santa Cruz, echoed the sentiments expressed by Nichols and Cohen. Many mainstream newspapers, he said, tend to streamline their coverage and rely more on sharing stories between themselves and syndicating national stories to save money.
“One of the things with newspapers is that the profit margins of newspapers tend to be higher than the average Fortune 500 company,” Hallinan said. “These companies are making plenty of money on newspapers. What they do is they skim them. The chain system allows them to share the news, so they can have smaller news staffs. They do cheaper stories; investigative journalism is expensive.”
He also criticized many newspapers for not providing enough local news, a responsibility of theirs, because “local reporting is expensive.”
“People need to realize that newspapers are profit-making enterprises,” Hallinan said. “If they don’t make a profit, they go out of business. The question is: can you find the balance between making a profit and fulfilling your constitutional duty to keep the electorate informed?”