It was just shy of one year ago today when Mark Potts swam against the Zellebratory news of the sale of Tribune, in a post entitled “Here Come The Death Eaters,” in which he typed these words:
Put that all together, and 2008 may be the year that the Death Eaters start coming for some of the biggest names in the business: Big chains or papers that are overextended financially and find themselves undermined by the gathering storm of problems. Wall Street and bankers aren’t going to put up with that, and executive heads—not to mention those of a lot of unfortunate rank and file employees—will roll. Watch for still more consolidation and, um, innovative financing that will further roil the industry.
Just look at the tumult that accompanied Sam Zell’s closing of his deal to buy Tribune Co. this week. The bankers were squeezing the deal right up to the last minute. Even Zell called it “the transaction from hell.” And Zell’s going to have to pedal—and peddle—as fast as he can to keep the company afloat financially. It’s not just the Chicago Cubs that are going to be sold by Tribune. Look for a fire sale of real estate and newspapers (Los Angeles Times, anyone? Anyone?) as Zell strips the company for cash. And at this holiday time, say a prayer for the poor Tribune employees, who could be left holding the bag—through their retirement plan, which now owns the company through Zell’s creative accounting—if things turn sour. Memo to Tribune employees: Get. The. Hell. Out.