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| Is The Day Coming When Sam Zell & Randy Michaels Leave Tribune Co.??? |
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| Written by Larz | |||
| Friday, 30 July 2010 21:06 | |||
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When Sam Zell and his top executives, headed up by Randy Michaels, took Tribune Company into bankruptcy, they thought it would be a relatively simple way to avoid paying a lot of debt and make the company profitable once again -- even though much of that debt came from Sam Zell's purchase of the company and the actions of his chosen executives. It turns out, the road into bankruptcy was much easier than finding a road out of it.
Numerous creditors and organizations have filed legal motions preventing Tribune Company from getting a free pass. The US Bankruptcy Judge that was being very favorable to Tribune request -- including allowing the bankrupt company to pay almost $60 million in bonuses to top executives, while the company continued to freeze pay and lay off much of the company's work force, claiming they had no money for them due to the tough economics the company was dealing with -- started to give a closer listen to what the complaining creditors were saying. Outside examiners are turning in reports showing fraud on the Tribune's sale to Zell and Zell's handling of the funds for the sale. Many at the top of Tribune Tower, who have long felt secure in their jobs and their abilities to re-shape the company as they saw fit, are now getting worried about their futures. Perhaps most worried is Randy Michaels, the current CEO and former head of Jacor Radio & Clear Channel Radio. Michaels filled the executive branches of Tribune Company with friends & cronies of his from his days at Jacor & Clear Channel. People who only knew how to work at a radio station, are now in charge of running newspapers, websites, television stations, marketing, and other areas of the company they had little or no experience or training in. All that mattered to Randy Michaels was that they were loyal to his whims. While some give Michaels credit as a radio programming genius, many more credit him as the man who single-handedly ruined the radio industry. Much has been written of people's fears of how he now seems to be ruining many of the Tribune's properties, including their local properties: the Chicago Tribune newspaper, WGN-AM radio and WGN-TV. Also frequently talked about is the fear that the perceived "ruining" of Tribune properties would continue on for a very long time to come. Michaels, as the CEO, has removed most of the "old guard" and replaced them with his friends, who he has rewarded well. They will not speak out against him. The Tribune Company Board of Directors could demand changes, but unfortunately, the person who heads up the Board is none other than: Randy Michaels, who has also installed friends within the board. The owner, Sam Zell, will not get involved with Michaels handling of the company. All he knows is that Michaels made him a rich man once before and is confident that one way or another Michaels will do that for him again. It seemed like Chicago and the country would be stuck with this man for years to come, just watching the crumbling of beloved media icons happening again and again, for months and years on end. However, that may have begun to change today... Fearing that the bankruptcy proceedings are not going as planned, and fearing that a Bankruptcy Judge could force the Tribune to install a NEW Board of Directors to oversee operations as a key to exiting bankruptcy -- a Board that would not look too kindly on the ex-Jacor/Clear Channel crew running the show -- Randy Michaels is now plotting possible exit plans. Reports are coming out today that Randy Michaels is trying to create a way out, but a way that would still make him and his pals very wealthy. Of course, Randy Michaels is looking to make sure he will end up the wealthiest of all, with the biggest, richest golden parachute of all. What was proposed today is a severance package for some 43 top executives within Tribune Company, should a new Board of Directors take over and want to fumigate Trib Tower, removing the new rats that have moved in. Representatives for Tribune Company filed this new plan as part of a supplement to its latest reorganization plan. According to the Tribune's own published reports, what Randy Michaels wants if he gets pushed out is a salary package worth 2.5 time his annual salary and estimated bonuses, plus two full years of his current all-inclusive health insurance. Others would also get nice severance packages, but none as nice as his. COO Garry Spector would get 2.25 times his salary, plus two years benefits. Chicago Tribune Publisher Tony Hunter would get 1.75 his annual salary, plus two years benefits, as would the publisher of the LA Times. 32 other executives would get 1.5 times their salary with 18 months benefits. The plan does not total up what the executive mega-golden parachute would cost the company and leaves out what the salaries and bonuses are for these 43 executives. It would be in effect for 18 months after the bankruptcy ends. The severance package would have to be approved by the creditors who would end up controlling the company after it emerges from bankruptcy. It also would have to survive challenges by other creditors who have challenged almost every other plan the Tribune has put forth. The plan also stated that it confidently expects all of the current executives in place now to be retained after the restructuring. However, the fact that Randy Michaels and his gang are thinking exit strategies means that they are not as confident about their being here long term as they once were. The good news for those who may love the idea of the ex-Jacor/Clear Channel mob getting tossed out is that what was once thought improbable has now become possible. The bad news is that if this outrageous severance package is accepted, the dollar amounts could bankrupt the company once again. It would also handsomely reward those who have not earned rewards. Another concern is would be if there is even a way to repair much of the damage that has been done by the current regime to some of the more trashed properties and just how much that would cost to complete. One has to wonder if Chicagoans would pitch in to a fund that helped march Sam Zell and Randy Michael's Clear Channel army out of town... Confirmation hearings for the Tribune's proposed reorganization plans, as well as for competing plans from opposing creditors could begin as soon as August 30, 2010. 
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