Real estate mogul Sam Zell won the battle of the billionaires Monday, landing media conglomerate Tribune Co. after a down-to-the-wire bidding war. Even with the buyout's $8.2 billion price tag, the outlook for the nation's second-largest newspaper publisher remained as uncertain as it did six months ago when it began a strategic review to boost a lagging stock price.
A big chunk of new debt also will be required to pay the $34 a share cash buyout. Zell is counting on repaying the debt largely through tax benefits from a new employee stock option plan that would supplement existing retirement accounts for the company's 20,000 workers.
Aside from selling the Chicago Cubs baseball team and its stake in Comcast SportsNet, Zell and Tribune executives were mum about prospects for the rest of the company's assets, including 23 television stations and nine newspapers ranging in size from the Los Angeles Times and the Chicago Tribune to the Daily Press in Newport News, Va. that will remain after two papers in Connecticut are sold.
"Whether someone whose experience is in commercial real estate -- in steel and cement and bricks and leases -- can navigate the ungainly media structure for success remains to be seen," said Rich Hanley, a journalism professor at Connecticut's Quinnipiac University. "This is unlike any other business he's touched. ... The stakes are very high."
Tribune Chief Executive Dennis FitzSimons told The Associated Press that there are no plans to cut the company's work force or sell off other newspapers or TV stations.
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