Sam Zell obit

Sam Zell, Billionaire Real Estate Investor, Dies at 81

• His Equity Group Investments focused on distressed assets
• The leveraged buyout of Tribune Co. ended in its bankruptcy

 He was not on the list.

Sam Zell, the billionaire real estate magnate who purchased — then bankrupted — the newspaper and broadcast business Tribune Company, died this week after a brief illness.

Zell was 81.

The real estate tycoon made his fortune by managing thousands of apartments while attending business school. He graduated in 1963 from the University of Michigan, who frequently invited him back for guest lectures and town hall events.

In the mid-1960s, he founded Equity Group Investments, a real estate holding firm that he ran for several decades. In 2006, Equity was sold to Blackstone Group for $36 billion, one of the biggest pre-recession leveraged buyouts in American history.

Zell took his fortune and purchased and invested it in the Tribune Company, acquiring a majority stake of the broadcast operator and newspaper publisher for $8.2 billion. At Tribune, Zell tried to impart his brash brand of business on journalists who were deeply involved in producing stories of importance, telling some that they needed to focus more on what audiences wanted — like puppies — to drive attention and revenue, so they could focus on other areas, like the ongoing conflict in Iraq.

“You’re giving me the classic, what I would call, journalistic arrogance, deciding that puppies don’t count,” Zell told a Los Angeles Times editor during a town hall meeting with the newspaper’s staff. “What I’m interested in is, how can we generate additional interest in our product, and additional revenue, so we can make our product better and better? And hopefully we get to the point where our revenue is so significant that we can do puppies and Iraq.”

That revenue would not be realized under Zell’s tenure. After taking the company private, Zell orchestrated a massive bankruptcy filing that saw Tribune report $13 billion in debt on just $7.6 billion in assets. At the time, it was the largest-ever bankruptcy case involving an American media company.

In October 2010, New York Times media columnist David Carr exposed a fraternal culture among Tribune’s top executives, which Zell not only encouraged but openly embraced. Among other things, an executive hand-picked by Zell was accused of offering $100 to a waitress during a corporate event in exchange for her flashing the table.

The behavior was excusable, according to an employee handbook that was re-written after Zell took the helm, and was expected to be overlooked by other colleagues who might have found it offensive.

“Working at Tribune means accepting that you might hear a word that you, personally, might not use,” the handbook read. “You might experience an attitude you don’t share. You might hear a joke that you don’t consider funny. That is because a loose, fun, nonlinear atmosphere is important to the creative process. This should be understood, should not be a surprise and not considered harassment.”

During the same town hall meeting with Los Angeles Times reporters, Zell said his Tribune Company would not install filters on newsroom computers, and that he didn’t mind if employees sat at their desks watching pornography, as long as they got their work done.

“Let me know if you find any good sites,” he joked.

His antics were not well-received.

“They threw out what Tribune had stood for, quality journalism and a real brand integrity, and in just a year, pushed it down into mud and bankruptcy,” Ken Doctor, a newspaper analyst, told the New York Times in 2010.

Zell ultimately lost $315 million from his investment in Tribune. He resigned as CEO in 2009, but remained chairman of the company through its bankruptcy case. Over the years, Tribune was broken up and sold off to various other companies. The broadcast side, called Tribune Media, was acquired by Nexstar Media Group in 2020, making it one of the biggest owners of TV stations in the country. The newspaper division was given the odd name “Tronc,” later Tribune Publishing, and no longer includes ownership of the Los Angeles Times or the San Diego Union-Tribune.

In the years that Zell pulled the strings at Tribune, more than 6,000 newspaper and television employees lost their jobs, according to a conservative estimate by The Desk based on years of news reports. In an interview with Crain’s Chicago Business in 2014, Zell seem largely unfazed that his poor management of the media company led to so many disastrous outcomes

“People tend to ask me about the Tribune like it was something equivalent to having lost a child,” Zell said. “I promise, I never had any kind of emotions like that.”