The Baltimore Sun, Sam Zell, And Wrigley Field

Posted on March 14, 2008

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Question: What does The Baltimore Sun, recently rediscovered by The Wire, have in common with the Chicago Cubs?

Answer: Sam Zell. He’s everywhere. He seems to own everything. And he might be willing to unload some of his properties to reduce the $13 billion debt (plus $1 billion a year in interest, according to Forbes) left over from his leveraged buyout of the Tribune Co. last year.

This week, Sam Zell visited The Baltimore Sun for the first time since he consummated the deal for Tribune Co. and its 16 newspapers, 26 radio and TV stations, the Chicago Cubs baseball team, and assorted real estate.

“The news business is something worse than horrible,” Zell told Sun workers. He wouldn’t rule out selling the Baltimore newspaper (who would buy it?). Zell said Tribune Co. revenues are down 16 percent to 18 percent, year over year, according to The Sun’s Lorraine Mirabella. In a story written for the paper and posted on http://www.baltimoresun.com, where you can also view a snippet of Mr. Zell’s remarks, Ms. Mirabella identified her new boss as a “motorcycle-riding real estate mogul.”

The mogul has already earned the wrath of Chicago Cubs’ fans, and sports fans in general, with his plan to sell the naming rights to Wrigley Field to the highest bidder. The Chicago Tribune reported this week that a deal is at hand. The price is said to be $20 million a year for 20 years. Since 1926, Chicago’s forlorn field of dreams has been named after a man who made his fortune on chewing gum.

After he sells the name, Sam Zell will likely sell the venerable ballpark, valued by Forbes at $120 million. Then he’ll sell the hapless Chicago Cubs baseball team, estimated to be worth $472 million. See, after a leveraged buyout, the parts turn out to be more valuable than the whole.

The good news for Baltimore is that Sam Zell says no decisions have been made about the future of The Baltimore Sun. The bad news is that Sam Zell is taking inventory of the parts. He has his eye on The Sun’s prime Baltimore real estate, especially the Port Covington printing plant and its 60 acres. “That land on the bay is worth a lot,” he speculated out loud before a crowd of Sun employees. By industry standards, the printing plant is practically new and state-of-the-art. For what that’s worth.

Zell might also hang a for-sale sign on the Sun’s cavernous, white-elephant headquarters building on North Calvert Street. That bunker-like building was designed primarily as a letterpress printing plant. But letterpress printing is dead. The roaring web presses and the 24-7 composing room are gone. The building still houses the Sun newsroom and business offices. There’s also the parking garage occupying a full city block across the street from Center Stage.

Zell’s visit to Baltimore wasn’t designed to improve morale at the newspaper. He’s on a mission to shake up the journalists who work at his properties, to motivate them to embrace change, before it’s too late.

Speaking of change, next month, The Sun will launch a new tabloid daily featuring news lite and aimed at readers in their 20s and 30s. The tabloid will be priceless. I predict that readers of the new paper will definitely get their money’s worth. — Bernie Hayden

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