| So the debt-laden Tribune Company, owner of the LA Times and Chicago Tribune, went bankrupt; that's not a surprise, the newspaper business is in dire straights and this company has been in trouble for years. But the details here are fascinating. The Tribune took on most of its debt recently, in a transaction taking the company private put forward by billionaire conservative Sam Zell, who is widely known in media reform circles as one of the single worst influences on media policy in the country.
The FCC actually tried to block this transaction on the grounds that taking the Tribune private would require them to relax cross-ownership requirements. Zell's contempt for journalism in general and his employees is legendary, with one clip online showing Zell cursing out a journalist employee asking him a question at a public forum. This extended to financial self-dealing, with Zell financing most of the deal by borrowing against the employee pension and stock ownership program. He himself only put $315 million into the total $8.5 billion deal.
The Teamsters, Common Cause, and the Media Access Project all argued that the sale of the Tribune would damage local communities, and with Zell's overleveraged strategy combined with immediate layoffs, they were right. But the FCC ignored their points and allowed Zell to proceed anyway. The question is why, and the answer, as usual in DC, is a mixture of influence peddling and social ties.
Last year, Emanuel and Sen. Richard Durbin, D-Ill., wrote to the Federal Communications Commission, urging the agency to act quickly on the sale of Tribune Co. to real-estate magnate Sam Zell. The lawmakers said the FCC shouldn't allow its review of its media- ownership rules to delay completion of the transaction.
Both Dick Durbin and Rahm Emanuel received substantial donations from the predominantly right-wing Zell, with Emanuel having an especially close set of ties. Zell gave to him for his contested 2002 primary slot, after Emanuel had just finished his stint as a Chicago investment banker. Their social worlds are so close that Emanuel actually attended the strongly pro-Israel school that Zell built. None of this is to allege some sort of conspiracy, as local media barons tend to have a great amount of power everywhere. In fact, the story, while fetid, is only different because Zell combined several forms of acceptable legal corruption in one set of egregious moves.
Much to his credit, Obama stayed out of Zell's orbit. Zell was a huge McCain donor and blamed Obama and Clinton for the sour economy. That month, of course, in the throes of a debt-laden company, Zell still found time to throw himself an 800 person birthday party in a 'tented fantasyland' with the Eagles providing the entertainment.
So while there is a lot of hand-wringing at the newspaper business dying, there's almost no focus on how egregiously mismanaged and corrupt these companies often are. The New York Times (and until its sale the Wall Street Journal) were framed as 'family dynasties' akin to public trusts, though how nepotistic control of powerful for-profit media corporations is some sort of public trust is a mystery. Local newspaper publishers often have strong public policy preferences, such as ending inheritance taxes, and they use their newspapers to pursue them. Zell's horrific legal theft from his employees, his unseemly political influence with high-level Democrats and Republicans, his financial gamesmanship, and his general contempt for the product itself are just particularly obvious. |
