Zell: No Newspapers Can Survive

When posed with the question of whether or not he regrets his Tribune deal, Sam Zell admitted, "It's certainly the most amount of money I ever lost in a single deal." He goes on to say that the entire newspaper industry, including Tribune, has seen a crash in revenue, and that "nobody can survive." Zell said Wednesday that he no longer believes the media company will emerge from Chapter 11 bankruptcy before the end of this year. Tribune Co. filed for Chapter 11 protection last December because it was struggling to manage the debt from the deal Zell engineered to take the company private a year earlier. The heavily leveraged transaction for $8.2 billion saddled the Tribune Co. with $13 billion in debt just as the bottom fell out of the advertising market. The original deal gave Zell a $90 million warrant that gave him the right to buy about 40 percent of the company for $500 million and has been the basis of his control of the company. "I don't think that that structure and that original plan will survive in bankruptcy," Zell said in the interview. Zell also holds a $250 million note representing a loan he made to Tribune Co. as part of the going-private transaction, but that note is near the bottom of the hierarchy of claims in Tribune Co.'s bankruptcy case and is seen as unlikely to retain any value during the capital reorganization.