Former Disney CEO Michael Eisner is in discussions that could lead to his return to the media biz as chairman of Tribune. The company’s largest creditors — JPMorgan Chase and two hedge funds, Angelo, Gordon & Co. and Oaktree Capital Management — are reportedly having exploratory conversations with prospective candidates who could operate Tribune once it emerges from bankruptcy protection, according to an LA Times story.
Eisner, who has been dabbling in the digital world as an investor since stepping down from Disney in 2005, is among the candidates under consideration to replace Sam Zell as chairman of the reorganized company. He recently told Variety that he had been accumulating Tribune debt: “You are talking to somebody who is buying debt in the Tribune Co. The salvation of the newspaper is some kind of pay arrangement [online], which will evolve into something significant.”
Tribune owns 23 television stations, including KTLA-TV Los Angeles, WGN-AM Chicago, and a group of newspapers including the Los Angeles Times and the Chicago Tribune.
The senior creditors can’t officially make changes until a plan is in place allowing the company to emerge from its nearly two-year legal entanglement. Under one scenario being discussed by the group, Eisner would be joined by Jeff Shell, who runs Comcast’s cable channels group, according to the story. Shell would become CEO of Tribune, replacing Randy Michaels. Earlier in his career, Shell worked on the strategic planning staff of Disney when Eisner ran the company.
Tribune and its creditors are still struggling to settle a claim that Zell’s 2007 leveraged buyout involved a fraudulent conveyance, which rendered the company insolvent from the start. That settlement would serve as the basis for a plan of reorganization. The senior creditors will most likely end up owning Tribune because of their $8.6 billion in claims.
Recently, we reported JPMorgan and Angelo, Gordon & Co. withdrew support for Tribune’s reorg plan. They were unsettled by Tribune’s request to indemnify its directors and officers, including Zell, from potential legal action related to the buyout.
On the other side, Tribune execs are still talking to creditors and is expected to file a plan 8/27 laying out its vision of what would be a fair settlement, hoping enough creditors will get on board to get a plan confirmed by the court. One person told the paper that when the time comes, the creditors would probably follow normal corporate practice: Choose a new board and chairman, institute a formal search for a chief executive (which is likely to include Michaels) and then make a final choice.
Other execs who have been approached by one or more of the creditors about playing a role in Tribune, post-bankruptcy, include Fred Reynolds, retired chief financial officer of CBS; Mel Karmazin, CEO of Sirius XM Radio; Terry Semel, former chairman and co-CEO of Warner Bros.; and Bob Pittman, former COO of AOL Time Warner.