Money Talks, Bullsh*t Walks, page 11
To Mills, change is inevitable. “In terms of looking at what we do now, we just have to face it, that’s over, and how are we going to do good journalism and invent the new models that will make it happen? It’s just very hard to see how the daily metro newspapers are going to go on. We’re already beginning to see about going to fewer days a week with print and emphasizing Web content.”
And newspapers are not the only medium to see change. “The same thing is already beginning to hit local television stations,” said Mills. “You’re going to see a number of cities where the number of television stations will really come down to one or two in each market because the only reason they are going to have to exist is local news coverage, because nobody needs a tower anymore to distribute the entertainment stuff. It’s the television model of the omnibus newspaper, where I Love Lucy supported Walter Cronkite.”
TENSE TIMES INDEED
Amazingly, Zell’s view of journalists is roughly the same as Mills’s, but as an avid news consumer, he disagrees that newspapers are dead. And with Tribune, he had the world’s largest media laboratory, with major resources and assets in the print, broadcast, and online mediums to find the right formula that works. What he didn’t have was much time.
Even before the Tribune deal closed, Zell was talking with rival publishers to get a better idea of the lay of the media landscape. Early on, Zell visited with Brian Tierney, the CEO of Philadelphia Media Holdings, which owns the Philadelphia Inquirer, the Philadelphia Daily News, and the Web site Philly.com. “He said the first thing he did was put a URL at the top of the newspaper,” Zell remarked after the meeting. “That made a lot of sense, so I came home and I picked up a Tribune and I noticed our URL wasn’t on the front page. A week later it was.”7
Initially Zell settled into his comfort zone to find the right day-to-day chieftain for Tribune. He tapped top lieutenant Randy Michaels for the job. Michaels was transferred from his role as vice president and CEO of Tribune’s interactive and broadcast divisions to the expanded role of chief operating officer, also in charge of the publishing unit.
Zell also knew that he and his fledgling team didn’t have all of the answers. The day the Tribune deal closed, he announced a new online inbox, talktosam@tribune.com, dedicated to opening the communication channels with staffers.
“The first step toward increasing revenue and increasing profitability is increasing communication and increasing the flow of ideas, and at the same time creating a sense of urgency so that when somebody comes up with an idea, it doesn’t get buried,” said Zell. “We’ve got to have a company [where people talk] to each other and a company that really is a meritocracy where we really recognize achievement and we encourage achievement. What we’ve learned over the last seven months is there are a lot of really talented people in this company. We’ve got to change the way the company functions so we can extract from those people what they have to offer and give them the satisfaction of being serious contributors.”8
Zell also used what he considered one of his primary assets in dealing with any new acquisition—the road show. He believed that his employees should get to know their leader, and he wanted to reinforce the fact that he would be anything but a typical corporate chieftain. To help jump-start his entry into the media business, Zell embarked on an initial coast-to-coast tour, meeting Tribune employees in every major market—Los Angeles, New York, Orlando, Baltimore, and Washington, D.C.
Early on, Zell showed signs of liberating Tribuners from some of their perceived shackles of the past. In particular, the news staff had expressed their frustration over having their Internet access filtered to block Web sites that might contain pornography. Zell was so incensed at this censorship that he had the blocks removed and let everyone know his decision via unfiltered corporate e-mail.
His whirlwind tour of visits to newsrooms and press facilities was choreographed to present Zell at his “I’m here to be your new leader” best. After all, this had worked with his other companies, where the sell had gone well. But Zell’s message was blunt and to the point—the company had to turn around its fortunes, fast, and it needed all hands on deck to make that happen. This time around, however, the audience was different. It was dominated by a news crew, full of reporters who did not appreciate his calls for them to produce a product that would “sell” readers and viewers.
Thanks to the interactive age, Zell’s colorful speeches were delivered in real time to millions around the globe via YouTube and countless blogging sites. Now a larger audience could make its own snapshot assessment of the man who dared to call for reporters to become more accountable to their audiences.
To be clear, Zell was not talking about a need for massive layoffs to help meet Tribune’s enormous debt payments. Not yet, anyway. In fact, rather than make willy-nilly changes simply for the sake of change and to show that he was shaking things up, he wanted time to assess the situation, particularly the company’s cash flow. Two days after the Tribune deal closed, Zell noted:
“It’s really simple. If in effect your focus is just cost cutting, it’s only a question of time before it’s over, because then you get to the last person or last cost, and you have nothing left. It’s not a direction for the future. That’s not a direction for growth. I would tell you that I think we will have more employees a year from now than we have today. It’s also unlikely that all of the deck chairs will all be in the same place. We didn’t come here to go down on the Titanic. We came here to own the Empire State Building.”9
Obviously, by this time, Tribuners were getting a better sense of their new owner. Another exchange between Zell and several Chicago Tribune reporters at a get-together in 2007 spoke volumes about the man. Asked why he bought Tribune Co., Zell remarked, “Because nobody has ever done it before. The true test of an entrepreneur is someone who spends his life constantly testing his limits. The definition of an idiot is someone who has reached his goals.”10
SAM’S MEA CULPA
The Zell road show continued in early February 2008, as he made highly publicized stops at the Los Angeles Times and the Orlando Sentinel. Particularly memorable was a verbal exchange between Zell and Sentinel photographer Sara Fajardo, which quickly became the stuff of YouTube legend. At the end of Zell’s final answer to Fajardo’s question, he uttered, “Fuck you.” Because the camera was focused only on Zell, it was not apparent what Fajardo had done to elicit the response—Zell says she turned her back on him before he was finished with his answer.
According to Zell spokesperson Terry Holt, he was offended by Fajardo’s tone, not her questions. Holt noted that Zell had tried to reach Fajardo over the following weekend to apologize “if he offended her in any way.” Fajardo left the paper several months later to become the communications officer for Latin America and the Caribbean at Catholic Relief Services in Washington, D.C.
The perception in media newsrooms from coast to coast was quick and sure—Zell was not only autocratic and crass, but the new boss was truly out of control. At times, it seems that Zell knows, or at least acknowledges, when he has personally crossed the sometimes invisible line between deprecation and demagogue. In one e-mail he explained that his raw language was deliberately intended to direct attention to Tribune’s financial plight and the need for continued cultural change. But he also issued a “mea culpa” to anyone who thought he had gone a bit too far.
Soon after what became known simply as the mea culpa, L.A. Times editor John Arthur expounded on Zell’s comments with his own brief note to the editorial staff. In it, he downplayed Zell’s remarks and reminded his minions that they should not follow his example when it came to the use of colorful speech in the newsroom.
Impersonal e-mails did little to quell the internal contagion that spread to the next stop on his road-show tour. In a town hall-style meeting with employees in Tribune’s cavernous Campbell Hall auditorium on the seventh floor of Tribune Tower, Zell again clearly made the sense of economic urgency known, in equally colorful language. In essence, it was a “damn the words” moment:AUDIENCE QUESTION: A number of people at the company, especially women, have been deeply offended by some of the statements you said in other places and other venues. I know you did the mea culpa, and I think we all know the history, but I wondered if you would address that here, because it’s taken so long for people, and again especially women, to arise in the profession, and then they have felt personally disrespected by some of your comments.
ZELL: First of all, I would not take back anything that I have said. I wouldn’t take it back not because I disrespect women. As a matter of fact, if you look at my history, I have promoted more women to senior executive positions in my career than almost anybody else I know about. My number-one person for many years was a woman, an extraordinarily competent woman. So I don’t have any issues of that at all.
But you turn it around and you put yourself in my position. You look at a company that requires fourteen signatures for somebody to go to the bathroom. You look at a company that requires ten signatures for somebody in York, Pennsylvania, to buy a ten-thousand-dollar Jeep. You listen to people in the newsroom at another paper than this one literally talk about their total disregard to the company, to the Tribune, that it’s all about how do I win a Pulitzer Prize and I don’t really give a shit about anything else.
You hear attitudes that we don’t do it that way. No, we can’t do that. Over and over again. I’ve got nineteen thousand people out there; some are men, some are women, some are other, I don’t care. The challenge for me is how do I get your attention? Call me a schmuck, that’s fine; call me disrespectful of somebody, prove it. I don’t think anything I’ve said anywhere was directed at anything more than . . . this company lives without the eleventh commandment. And goddamn it all, we better get that eleventh commandment back on the front page here.
The eleventh commandment is, Thou shalt not take oneself seriously. Nobody is more self-deprecating than I am. If I can get everybody in this room to be self-deprecating instead of worrying about what’s politically correct or what’s not and instead worrying about How do we win? How do we succeed? How do we put out a better product? How do we make more revenue? How do we make a profit? How do we provide for our retirement? Those are the challenges. Pick on me on those issues all day long, but the real question for me is, How do I get your attention?
How do I get into a sense of urgency? How do I get you to understand that the future of this company is currently right out there in front of us, and if we keep operating the way we’ve been operating in the past, there is no future. OK? Plain and simple.
So you tell me, how do I get everybody’s attention? Do I say, “Please? Hi, I’m here and I’m here to make all nice to you? We’re not going to reduce any employment, we’re just going to keep losing money.” And then one day it’s going to be over. So how do I get your attention?
I wrote that mea culpa, and I said I went over the line, and I went over the line on purpose, not accidentally. I went over the line on purpose to see if I could bring you to the edge. That’s what we’ve got to do. I’ve got to get you to the edge. I’ve got to get you worried more about our revenue tomorrow morning than anything else. Because that’s our survival.
Everybody’s made this thing into this giant thing, OK? The L.A. Times has written about it, and they took it off their Web site. I told them to put it back on. Do you want me to talk slower?
How soon is this organization in this company going to wake up to the fact that we’re on the edge, and we’re either going to win or lose, and we better goddamn focus our efforts on how we get better, not on who’s insulted. Nobody’s trying to insult you.
I want to win, and I’m going to win. And what I’m looking for are the people in this company who are prepared to step up and not worry about this fuckin’ thing or that fuckin’ thing, but to worry about one thing—How the fuck do we win? And how do we get better at it, how do we generate more revenue, how do we make a difference? Those are the challenges, and along the way, how do we create an enormously successful corporation that provides both opportunity and sustenance for employees today and a future for them tomorrow.
That’s the challenge. That’s what everybody should be talking about. Not my fucking language, because it doesn’t matter. And if it does, you’re in the wrong place. And I’m not trying to insult anybody, I’m trying to get your attention. I’m trying to get you to understand this is the game, and we’re either going to win it or we’re going to lose it. If we spend an awful lot of time writing and pontificating about Sam’s language, we’re going to lose. If we spend a lot of time trying to figure out how we’re going to generate more revenue tomorrow morning, then we’re going to win. So that’s my priority, and if that’s not an apology, too fuckin’ bad, I’m telling it to you straight.
I’m not disrespecting anybody, I’m trying to make everybody uncomfortable. I’m trying to put you in a position where it ain’t so easy, it isn’t like it was before, because that’s the only way we’ve got a chance. If everybody gets quiet and settled down and comfortable like you were last year . . . this company lost $50 million of cash flow last year, and you never would have known it if you talked to anyone around here. Nobody knew it. Nobody cared. This business has been eroding before your eyes and you’re worried about my language? Why aren’t you worried about your customers, for chrissakes? My language ain’t going to make any difference. I really am sorry if there’s somebody offended, but nothing I’ve said was with that intent. Everything I’ve said was with an intent to get everybody to get off their ass and understand this is a crisis. We’ve got to save this business, we gotta make it work. And we’ve got to prioritize what we get all pushed out of shape about.
The history of this company is to divert from the reality. The reality is revenue is going like this, so let’s focus on Sam’s language, not on the fact that we’re going right down the elevator shaft. Now how many articles did you read last week about my language and how many did you read about the reduction in revenue in the newspaper business? I rest my case.
Anybody else have any easy questions?11
QUANTITY VS. QUALITY
In his typically blunt and direct fashion, Zell was hitting hot buttons and taking dramatic steps to ask the kinds of tough questions that the media world had avoided for years—like how much are journalists worth and how do you measure their “performance”? Is it the prized “Pulitzer count” or some other metric? Or should it even be measured?
After months of internal meetings with Zell debating how to tackle the topic, Randy Michaels described the analytical process from a nuts-and-bolts business perspective in a conference call with Tribune investors in June 2008. Essentially, Zell and Michaels looked at Tribune’s numbers and found the best way to trim costs was to create a newspaper model that basically yielded 50 percent advertising and 50 percent editorial content. Given the historical page count for Tribune’s newspapers, that meant Zell and Michaels found they could shave five hundred editorial pages a week.
While an advertising/content balance of 60/40 or 50/50 was fairly commonplace in the magazine world, it was certainly an “out of the box” idea in newspaperland. And yet, there you had it, a cost-efficient idea for producing “newspapers of the future.” Cut the bloody content.
On the call, Michaels went on to defend the stance, comparing the new model to a typical Wall Street Journal and noting that a skinnier Los Angeles Times, for example, would still be larger than the notable standard bearer of daily business.
But the pièce de résistance of Michaels’s comments hit most journalists like a shot between the eyes. “We’ve also done something that I guess is new, which is that we’ve looked at the productivity of our journalists. We obviously look at the productivity of our sales-people, but nobody has ever said, how many column inches does a journalist write.”
It turns out there are some really good reasons for that. For example, it takes longer to produce an investigative story than it does an obituary. According to Michaels, Tribune did some digging of its own, and the average journalist in Los Angeles produced about fifty-one pages of copy a year, while the average journalist in Hartford or Baltimore produced more than three hundred pages a year.
“I understand that there are different, extenuating circumstances and factors that have to be taken into account,” said Michaels. “But we believe we can save a lot of money and not lose a lot of productivity. And so all I would say is if you work hard and you’re producing a lot of output for us, everything is great. But we think we have a way to right-size the paper and significantly reduce our costs.”12
Needless to say, this repudiation of the age-old culture that had become ingrained in professional journalism hit the rawest of nerves in newsrooms around the globe. This was sacrosanct territory, hallowed ground, even, and Zell was trampling all over it. But did he care what journalists thought of his “right-sizing” the business? Not one whit, especially if it meant buying time to shore up Tribune’s eroding bottom line.
MR. CHANGE AGENT
Closely tied to column inches and page counts, Zell and his team embarked on an intensive program to redesign Tribune’s newspapers in hopes of giving them fresh appeal to readers and, more important, advertisers. Leading that charge would be another of Zell’s early and unconventional change agents, fifty-five-year-old Lee Abrams.
As Tribune’s new chief innovations officer, Abrams certainly brought a colorful history to his role, and one that had little to do with the print medium. Abrams’s main claim to fame was a ten-year stint as senior vice president and chief creative officer at XM Satellite Radio, overseeing the development and programming of more than a hundred radio stations. He developed programming for a star-studded roster, including musical artists Bob Dylan, Snoop Dogg, Quincy Jones, Willie Nelson, and Wynton Marsalis. Tribune journalists took notice—there was nary a Pulitzer Prize to be found in Abrams’s background.
