Zell calls Tribune Co. buy a 'mistake'
- |
NEW YORK - Billionaire investor Sam Zell made what is acknowledged to be one of the best-timed investment decisions ever by selling his real estate empire at the peak of the market in February 2007. Now he says he made one of the worst 10 months later by purchasing Tribune Co.
"The definition if you bought something and it's now worth a great deal less, you made a mistake," Zell said. "And I'm more than willing to say that I made a mistake. I was too optimistic in terms of the newspaper's ability to preserve its position."
Zell, 67, exited the US office market by selling Equity Office Properties Trust to Blackstone Group LP for $39 billion including debt in the biggest leveraged buyout at the time. The sale earned Zell about $900 million. In December 2007, Zell and investors took Tribune private in a deal that left it with $13 billion in debt. The company filed for bankruptcy in December 2008.
"I think you're going to recognize the fact that by filing for bankruptcy in December and being the first one, we also were able to stop the bleeding and preserve a great company," Zell said. Tribune owns eight major daily newspapers, including the Chicago Tribune and Los Angeles Times, and the Chicago Cubs.
"I think we're looking at every option at the Tribune Co.," he said. "It's very obvious that the newspaper model in its current form is not working. And the sooner we all acknowledge that the better. Whether it be home delivery, whether it be giving away content for free, I mean these are critical issues."
Zell said a merger of Tribune is unlikely. "That's like asking someone . . . if they want to get vaccinated with a live virus," Zell said. "There's not a long list of people who want to buy newspaper companies today."
