Billionaire Boychiks Battle for Media Empire

‘Committed Zionist’ To Buy Papers With Troubled Ties to Community

By Nathaniel Popper

Published April 13, 2007, issue of April 13, 2007.

When Sam Zell, a Chicago real estate mogul and soon-to-be media magnate, was a junior counselor at a Jewish summer camp, he regularly transfixed his campers with tales of his family’s escape from Nazi-occupied Poland.

The Zell family traveled through Russia and Japan, pretending to be tourists at the Bolshoi Ballet so as not to stand out. Fred Margulies, a camper in Zell’s bunk, said that the tale — told after lights out — was the most memorable part of the summer, and a prototypical display of Zell’s preternaturally magnetic personality.

“He was a great storyteller, and he captivated us,” said Margulies, today a rabbi and businessman in Chicago.

Zell’s storytelling skills may be put to a new use when he becomes the owner and CEO of one of America’s most powerful media companies, Tribune Company, which owns 23 televisions stations, a baseball team and many major newspapers, including the Chicago Tribune and the Los Angeles Times. His winning bid for the $8.2 billion company comes after a career in which he has made himself rich — to the tune of $4.5 billion — by turning around flailing companies with his brash, unconventional style. His skill at reviving the near-dead has given him the nickname in which he’s said to revel: “the grave-dancer.”

The irony of Zell’s latest success is that it will likely make him the owner of a company that has been the very antithesis of the Jewish summer camp culture in which Zell was molded. The Chicago Tribune, the company’s flagship publication, has had a famously antagonistic relationship with the Jewish community in Chicago — historically because of its right-wing, isolationist stance during World War II, and more recently because of its critical coverage of Israel. Newspaper watchers say that Zell and the Tribune will be an interesting mix.

“The paper has a reputation for having a thick glass ceiling for Jews,” said Michael Siegel, who for 25 years has been the rabbi at Chicago’s Anshe Emet Synagogue, where Zell is a member. “For someone like Sam Zell, who is noted as a grave dancer, here is he is more of a grave spinner. There are probably some past owners and executives who are spinning in their graves right now.”

Even before the Tribune went with Zell’s bid to take the company private, it was clear that the white, Anglo-Saxon culture of the Tribune would be challenged by a Jewish businessman. The major bidder besides Zell was Los Angeles Jewish businessman Eli Broad and his business partner, Ronald Burkle, (who has widely but wrongly been described as Jewish). The deal for the Tribune is not closed, and Broad and Burkle still could be able to best Zell’s offer of $34 a share.

Another Jewish businessman, Hollywood supermogul David Geffen, is said to be in talks now with Zell to buy control of the Los Angeles Times. The Times is the largest single property owned by the Tribune and has a contentious history with the Los Angeles Jewish community, strikingly similar to the Tribune’s in Chicago.

Despite being co-religionists, the bidders for the Tribune properties represent a wide spectrum of American Jewish experiences, and their ownership would mean very different things for the papers. Both Broad and Geffen give generously to Jewish causes in Los Angeles and in Israel, but Broad, a Detroit native, is best known for his work as a civic booster in Los Angeles. Geffen fits more into the classic mold of the liberal New Yorker who has dedicated much of his wealth to gay rights, liberal causes and national Democratic politics. Zell, by contrast, has a reputation for conservative politics and a more intimate involvement with Jewish and Israeli causes.

Given that Zell appears to be close to closing the deal for the Tribune, much media scrutiny has shifted toward how his background might shape the papers. One question that is asked frequently is whether Zell will follow the model of Fox News owner Rupert Murdoch, who has pressed his political views on his media properties, or whether he will concentrate only on the business side.

In an interview with the Tribune last week, Zell suggested that he would not be involved editorially. “Do I look naive enough to think I have any influence about what people write?” Zell asked in his blunt fashion.

Still, Zell has made it clear that he does have an interest in the things his new media properties cover. In the interview last week, he said that his favorite newspaper columnists are Charles Krauthammer, Thomas Friedman and David Brooks, all of whom are Jewish and two of whom write frequently and sympathetically about Israel.

Zell himself is a major donor to causes in the Middle East. His donations include a $3.1 million donation to the Herzliya Interdisciplinary Center in Israel and separate donations to the Israel Center for Social and Economic Progress, a right-wing Israeli think tank. In the United States, he has given major gifts to such Jewish causes as the American Jewish Committee and a Chicago Jewish day school named after his father. All this is on top of his political donations, which have gone mostly to Republican candidates.

Siegel, the rabbi at Zell’s synagogue, said that Zell is a “committed Zionist” and a “generous supporter of Israel,” along with “a member in good standing” of the synagogue who “comes on the holidays often.”

Among media watchers, this has been fodder for conversation. Ken Reich, a former Los Angeles Times reporter who operates a blog about the paper, said he assumes that Zell will shape the policy of his papers to some degree.

“If he cares about the State of Israel, he won’t want his newspaper to be out there chipping away at Israeli interests,” said Reich, who reported mostly on politics during his 39 years at the Times.

Reich said that at the Times, shifting the editorial policy would require only that Zell be consulted in the hiring of the new editorial page editor — a position that was recently vacated.

“It would not take very much tweaking by him to sharply alter the Times editorial policy on the Middle East,” Reich said. “I tend to expect this to happen.”

Other media critics have taken Zell at his word that he will stick to the business side. Siegel said he was interested to see which direction Zell would take, but he does know that Zell is a “very astute reader of world affairs — an avid newspaper reader — so you’re going to have to keep his interest.”

Siegel himself has been one of the leading critics of the Chicago Tribune’s Middle East coverage. He has organized multiple protest rallies outside the Tribune, most recently in 2003, when the Tribune published a cartoon showing a hook-nosed caricature of the Israeli prime minister following a trail of money laid down by President Bush.

The Tribune eventually apologized to the Jewish community, and Siegel said that the paper has been responsive to the concerns of the Jewish community since then.

Media watchers in Chicago say that Zell’s more immediate effect at the Tribune will likely be on the corporate culture.

“It’s a traditionally corporate environment,” said Abe Peck, a journalism professor at Northwestern University. “They’re the dominant paper in town, and they act like it and dress like it. Here comes this guy who never wears a tie — who comes on his motorcycle — and who brings a whole different style.”

The Tribune’s button-down culture today is an extension of the paper’s historical ownership by Colonel Robert McCormick, who earned the ire of Chicago Jews with his isolationist, right-wing posture during the Nazi era. A similar family of owners, the Chandlers, prevailed at the Los Angeles Times until the 1960s, when Dorothy Chandler began reaching out to the Jewish community to fundraise for local civic causes.

Since the Tribune purchased the Times from the Chandlers, the company has instituted a series of cost-cutting measures that have not gone down well in Los Angeles. Many civic leaders in the city were eagerly hoping that either Geffen or Broad and Burkle would buy the paper from the Tribune, not least because Los Angeles is a liberal city and Geffen and Broad are known for their liberal leanings, both in their secular and Jewish giving. Both men, for instance, are donors to Bet Tzedek, a Jewish legal aid organization. But both men have also tended to put non-Jewish civic causes ahead of their Jewish giving.

“They are both Jewish and very proud of it, but for both of them their primary involvement is not the Jewish community,” said Donna Bojarsky, a consultant in the Los Angeles political and Jewish worlds. “There are not many places to have influence in this city, and the paper would really be it.”

Zell’s arrival at the Tribune has been met with some disappointment in Los Angeles. That has included newspaper staffers who have expressed anxiety over the financial deal structured by Zell whereby he uses employee pensions to finance most of the deal, putting in only $315 million himself and pushing much of the risk onto the employees.

It may yet turn out that Geffen will take control of the Los Angeles property. Zell flew into Los Angeles for dinner with Geffen last Friday night in Malibu, where both men own beachfront houses. Despite their differences, the two men have spoken respectfully about each other, referencing the straight-shooting, unconventional style that inevitably comes from being an outsider.

As Siegel put it about Zell, “He has a great sense of humor — a real love of life — and no patience for baloney or arrogance.”



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