CHICAGO -- In his first extensive interview since acquiring Tribune Co., billionaire investor Sam Zell said he bought the company as a long-term investment, and having the right content is the key to the company's success.
"If you are relevant, people are going to buy the newspaper," he said in an interview with Chicago Tribune business editors and reporters. "If you're not relevant, then people will stop buying the newspaper and stop advertising and we'll all be in a stew of trouble."
Zell, who won a down-to-the-wire bidding war Monday, will acquire Tribune Co. in an $8.2 billion buyout that calls for him to invest $315 million and become chairman. The company owns and operates 11 daily papers, including the Chicago Tribune and the Los Angeles Times, 23 TV stations, and the Chicago Cubs.
The company spent six months soliciting bids, and considered a competing offer from Los Angeles billionaires Eli Broad and Ron Burkle.
Zell told the Chicago Tribune for a story published yesterday that several days ago, after it appeared his offer would go through, Broad contacted him proposing to join Zell as a business partner. Zell said he told Broad he would not consider it until the deal was complete.
The next day, Zell said, Broad and Burkle sent Tribune a letter claiming Zell had an unfair advantage.
"If somebody calls me and says I want to be a partner, and the next day tries to stick a knife in my back, tell me again why I would want to do business with him?" Zell said.
Broad declined to comment on Zell's remarks, a spokeswoman said yesterday.
Zell has laid out details of an employee stock ownership plan. The ESOP, which resembles a profit-sharing plan, will become the majority owner of Tribune once the deal is complete.
But he didn't give details on structural changes.
"To be honest with you, I don't know anything about job cuts," he said. "My focus is not to look at this thing and see how we can eliminate one more table leg, because, frankly, eliminating a couple more of this or that isn't going to make this work. What's going to make this work is raising revenue."
Earlier this week, Zell said he would sell the Cubs at the end of the season. He said he might sell Wrigley Field separately.
The deal's relatively small breakup fee of $25 million leaves open the possibility of another bidder coming in with a new offer, and Broad and Burkle have been reviewing their options.
While Zell has signaled that he doesn't intend to break up the company, others remain interested in buying individual assets if they are made available. Among them is billionaire media executive David Geffen, who told reporters this week he remains interested in buying all or part of the Los Angeles Times .