In retrospect, I can see why real estate billionaire Sam Zell thought buying the Chicago Tribune, Los Angeles Times, Orlando Sentinel and all their related newspapers and media companies—plus the Chicago Cubs baseball team and its home, Wrigley Field—seemed like a classic ploy.
Buy a big family-owned business on the skids for a discount, squeeze out greater efficiencies from its processes and earn back your purchase price by selling its more valuable assets individually. After that, whatever is left is gravy.
Zell probably thought he was getting in at the bottom. Unfortunately for everyone, the bottom was still years and millions away. That, and the era of leveraging mountains of debt was coming to a crashing halt.
BEN JOHNSON podcast excerpt: “In 2007, the death of newspapers had been talked about for years… Sam Zell thought he could go in and rally the troops. But the media world is a different world. I think the pushback took him by surprise… He’s a learned man but he has the lexicon of Howard Stern.”
You can LISTEN to this interview with Ben Johnson, author of Money Talks, Bullsh*t Walks, by clicking the audio player above!
Reading Ben Johnson’s new business biography, Money Talks, Bullsh*t Walks: Inside the Contrarian Mind of Billionaire Sam Zell, we get a much better, more favorable understanding of Zell’s thinking and a clearer sense of why he did the deal he did and why it was probably destined to fail.
Gotta love hindsight.
The key takeaway from the book for me: Zell may be an unrestrained Chicago loudmouth, but the lords of American newspapers should have taken his ideas more seriously and the way he expressed himself a little less so. In many ways, he was—and continues to be—right about what ails their industry and could save it and they’re wrong.