The former Chicago Tribune and Los Angeles Times editor talks about the "deal from hell," Tribune Company’s bankruptcy, and journalism’s scramble for footing on the internet
Published: November 16, 2011
CP : You write that Tribune brass—folks like yourself—were intrigued by the idea that Trib would buy Times Mirror. What was the attraction?
JO: At that time the Tribune company throughout the ’80s and ’90s had bought up a lot of television stations. I think at the time of the merger, we had 20-plus TV stations. And we were paying big money for them, and everyone kept saying “Well, when are we gonna buy a newspaper?” And then the internet [was] coming along, and everything was consolidating at the time. AOL and Time Warner[-type] mergers. It was kind of like [buy] or be bought. We wanted to remain kind of independent.
And so the whole thought of having a national platform—the Chicago paper was a major Midwest newspaper, but it was kind of overlooked on the coasts. I thought we could do better journalism . . . and get more exposure and recognition for what we were doing. So from a journalistic point of view, I thought it was a really great opportunity. On the business side of it, they felt they could sell national advertising by capitalizing on the fact that they had newspapers based in Chicago, Los Angeles, and New York—but really they didn’t, ’cause they didn’t have a newspaper in New York City. They had Newsday, which is on Long Island. So I think it was a flawed idea. National advertisers didn’t want to buy a bunch of advertising in Chicago, Los Angeles, and Long Island. They would rather buy from the local paper there.
CP : I remember Tribune culture as practiced in Central Florida in the mid- to late 1990s. The Orlando Sentinel was a weak and predictable paper then going through spasms of trendy nonsense—putting reporters on TV, etc. The paper’s web strategy was so absurd that my paper, Orlando Weekly, hired its best online person away at about half her pay—so keen was she to leave. It was my impression that Tribune’s stock price—then beginning a serious runup—was fueled mainly by its Web 1.0 fantasies and the hype engendered by the first internet bubble. That bloated stock price, in turn, temporarily afforded Tribune’s bosses the belief that theirs was a much more powerful and competent company than it actually was, leading to the disastrous merger with Times Mirror. What is your recollection about Tribune’s corporate culture in the years leading up to the merger?
JO: Tribune was actually, in a way, in those years, pretty innovative. We were one of the first papers that went on the internet. The TV—I never had a lot of faith in that. But still it was a paper that was trying things.
CP : What was the New Century Network?
JO: That was Charles Brumback. He [was] looking, seeing down the road, that we’re going to have trouble for our journalism if we don’t get some money for it. So he wants papers to put all their content into the New Century Network. This was to be web-only, and operate sort of like a wire service. To get the information, you had to belong to the network and pay. Then it would split the revenue among the members according to what stories sold. This was in 1992, 1991.
CP : Pre-browser years.
JO: Right. So he gets all these news companies to join in. These companies still have a lot of swagger. We had The Washington Post, Knight Ridder, The New York Times, Times Mirror. We had a guy from Kleiner Perkins, the Silicon Valley company, and he thought it was a great idea. He was gonna put $5 million into it.
So that would have really changed things. . . . If we had done that it would have been much harder for Google to get started. . . . You would not have had free [news] content.
It didn’t happen because all the institutional egos in the industry didn’t take the threat seriously. They really didn’t see the threat coming.
CP : What’s happening in the Trib bankruptcy right now?
JO: Right now the bankruptcy judge just rejected both competing sets of plans for the company, and that has created a fascinating situation. There were two groups of creditors, and they couldn’t agree on a plan to get out of bankruptcy. The judge said he found a lot more to like in Plan A, which is the company’s plan. But he said they should have not said [they’re] not going to go and get money back from anybody who sold stock to Zell when he bought it, ’cause it’s not worth it on a cost-benefit basis. The judge said that’s not good enough. So now the company may have to go after the retirement funds of its past employees . . . to recover money for creditors, many of whom made millions in fees for lending money to the company. Of course, they lost most of the principle.
CP : But the idea—that they’d actually go after the everyday workers who sold stock five years ago—and against their will at that?
JO: It’s pretty stunning. A hearing is set for, I think, Nov. 22. [The judge has] kind of laid out in his ruling the things that the plan has to have for him to approve it. And the company has indicated that they’re going to come up with a plan that would satisfy his problems . . . key is that if the Plan B guys end up agreeing with that.
Edward Ericson Jr. writes for our sister publication the 'Baltimore City Paper'
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