Tribune Tower Totters: Nine Questions

Consider this. When the Chandler Trusts, owner of 19% of the company, first pushed to "maximize their investment" in Tribune last June, the share price stood at $33. It dipped and rose, but as Sam Zell's offer looked like it would win the day, we were back to the same number. $33. There's an irony in that, but so much irony abounds in the Tribune's recent tribulations, it's hard to isolate it.

Now of course, it's L.A. billionaires vs. Chicago billionaires, and Tribune shareholders -- if not employees -- look like they will pick up buck or two from the bidding, as Ron Burkle and Eli Broad slug it out with Zell. After the bidding is settled -- we think Saturday when the Tribune board meets -- many questions will remain about the Tribune Company going forward. Nine of them; what's yours?

1. Explain it to me again, how is the debt of $10 billion-plus going to get paid down, as revenues decline and capital expenditures for both the old business (presses, trucks) and the new businesses (ahead-of-the-curve classifieds and editorial publishing platforms) are required? If the proposition includes putting more of the current $2.3 billion in employee pension funds into the deal as an ESOP, aren't the employees doubling down on their prospects at what seems a poor time?
2. When Sam Zell says, "My intention is not to break it up," don't you just hear the inflection on "intention"?
3. If the keys to future growth are the stakes in the classifieds properties, CareerBuilder and Classified Ventures, what's the impact in a change of control of the company? Can Gannett increase its 42.5% in CareerBuilder and take a majority?
4. If one private equity formula is to find the greater fool, which fool do these buyers believe will be standing in the wings?
5. What might be the impact of the sale on the one initiative that has mojo in the industry, the growth of the Yahoo/newspaper consortium, already encompassing 10 chains and more than 22o papers?

With Tribune's influence in syndication (Tribune Media Services) and in wires (McClatchy [nee Knight Ridder] Tribune Information Services), will a sale tip a reordering of those worlds?

If Sam has told associates he'd keep current management in place, what have Ron and Eli whispered in management's ear?

With Tribune advertising revenues dramatically dropping, what are buyers making of the company's big city strategy, considering that major metros are bearing the brunt of Web-induced circulation and advertising decline?

If Sam Zell wins the prize, does he have a deal already done to sell J.K. Rowling the Tribune Tower for her retirement?

What's your question?

Comments

[Mark]

My question: If the deal involves an ESOP that ties up future employee retirement dollars mostly in Tribune stock, will there be an exodus of senior managers who don't want their nest eggs riding on the newspaper industry, and decide the time is right to get out?