Tuesday, December 9, 2008

The Chicago Tribune

You don't blog for a little over a day, and what happens? Your city becomes the center of the media world, what with the bankruptcy of the Tribune Company and the arrest of the governor of your state, Rod Blagojevich, on corruption charges, not to mention the sit-in going on at a window manufacturer that doesn't want to pay its workers their severance and vacation pay.

As I was asked by a faithful reader for my take on the bankruptcy, I'll offer it with the caveat that I really don't have much novel to say. When a company takes on debt that is equivalent to nine times its cash flow, it's going to run into problems. Essentially, Sam Zell, real estate mogul, bet the health of the newspaper on the economy, gambling that he would be able to sell enough pieces to cover the massive debt.

And he was wrong. But he's still a genius, because he used a whole lot of Other People's Money to make the purchase, so he probably won't lose a whole lot personally. That's what counts for genius in this day and age, not an ability to make something work, but the ability to push the risk off on someone else. (John Thain of Merrill Lynch is not a failure because he ran his company into the ground. No, he's a failure because he didn't figure out a way to make his bonus automatic and legally impregnable; now he's had to back off from his "request" for, first, $30 million, then $10 million - though it's interesting to watch the spin as he has now "withdrawn his request.")

So we in Chicago watch and wait to see how Chapter 11 plays out for the Trib. What comes to my mind, though, is the extent to which I, and others, care about this. Republic Windows & Doors, the subject of the aforementioned sit-in, is apparently failing, and, while I'm concerned that the workers get what they're owed, I don't feel anything in particular about the company itself.

It occurs to me that there are some entities that become part of a public asset base, whose importance, real or imagined, causes them to have a life beyond their corporate charter. Clearly, that's not how a Sam Zell sees it. He may blather on about the "public trust" or whatever, but he purchased the Tribune because he thought it could make him some money, while recognizing that, if the economy went against him, he'd just walk away and leave the equivalent of a vacant lot.

Sports teams are like this, entities that take on outsized importance because of the emotional ties that people have to them. They know that, which is why they periodically blackmail governmental bodies into giving them benefits that no other private enterprise would get (the Mets and Yankees want more public support at a time when no reputable public agency should consider such a thing).

The collective television stations also have this hold on people, which is why I suspect that February's cutover to digital television is going to be taken a lot more negatively than predicted. I know that there is still a major station I'm not receiving, which is irritating; I also know I can live without it, but one wonders if they, given their problems (I'm looking at you, NBC), can afford to lose even the small numbers who are OTA and somewhat, but not very, far from the broadcast antenna.

Here's the thing: I don't have even a glimmer of a solution for the problem represented by these events. I don't want the government taking control of the Tribune, or the Chicago Cubs, or "forcing" WMAQ to boost their signal somehow (though I might bend on this one, given that government intervention is a big part of this problem), or prohibiting the move of the college football bowl games to cable. That just isn't an appropriate role for government to play.

But it is all part of how the mania to corporatize everything is making us all a little less bonded, a bit weaker. Sure, those of us who can't or won't get cable or satellite can only see about 40% of Cubs games now, but what's the big deal? Sure, the Tribune could stop publishing, leaving Chicago with only one voice in the major newspaper field. Sure, there will be any number of the elderly and the poor who will lose their televisions in a couple of months.

However, the revenue models will still play out. The BCS might lose 15% of their audience, but they'll gain more than that from ESPN. And those things that are common to us all, those things that have become shared experiences, fragment and drift away, but that's OK, because profits will be maximized and shareholders will be happy and, oh ho, how the executives will rejoice.

And we say that change is good, that progress is inevitable and always positive, and the people without voices, those who can't afford or figure out cable or the Internet, those who have already been marginalized, will slide even further out on the fringes, and will be forgotten.

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