It’s too late now, but Sam Zell said in a Bloomberg Television interview that he made a mistake with his heavily leveraged 2007 purchase of Tribune Company, which is now in Chapter 11 bankruptcy reorganization. Zell is committed to the task, though, and said he is determined to have the company emerge from Chapter 11 with its assets intact.
“By definition, if you bought something and it’s now worth a great deal less, you made a mistake 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 said of the Tribune buyout. He noted that he had expected a revenue decline for the newspaper business, but not on the scale of what developed.
The billionaire, who made his fortune in real estate, said in the interview that the business model for newspapers has to change and Tribune is looking at all options. “It’s very obvious that the newspaper model in its current form does not work and the sooner we all acknowledge that the better. Whether it be home delivery, whether it be giving content away for free – I mean, these are critical issues…We are seriously looking at everything because, in effect the future of the newspaper industry is at risk today,” Zell said.
Click here to see the video interview, which begins with a long discussion of the US real estate marketplace.