Sam Zell, the Chicago real estate billionaire, has prevailed in his efforts to purchase the Los Angeles Times (by buying its parent, the Tribune Company). Local suitors were rebuffed, including David Geffen (who made a $2 billion all-cash offer for the Los Angeles Times alone) as well as Ron Burkle/Eli Broad, who allegedly put in a more lucrative offer than Zell for the entire company.
According to the New York Times, Zell did this with a mere $315 million personal investment. Zell is famous for buying distressed companies, and this is his first venture into newspaper ownership:
People close to the negotiations said that while Mr. Burkle and Mr. Broad had initially offered more money than Mr. Zell, company executives wanted the company to go to Mr. Zell...Perhaps more importantly, people close to the talks said, the board was disinclined to sell the company to anyone with ties to Los Angeles because of bad blood between Tribune and The Los Angeles Times.
Hmm... Something tells me we don't have the whole story. Given the sharp rightward tilt of the Los Angeles Times in the last year, and the employment of Jonah Goldberg and the lobbyist-supported Max Boot as editorial writers, what editorial direction can we expect from the Zell family?
It doesn't look good. Sure, there are some token contributions to Democratic-leaning political causes, such as Zell's $5,000 to Our Common Values PAC in October 2005. But for many years, Samuel Zell has been a stalwart supporter of the Republican establishment, having funding some of the party's most notorious kleptocrats.
Here is a (typical) list of political donations from the past couple years (courtesy of opensecrets.org):
10/25/2006 $2,100 Frank Wolf (R-VA)
7/19/2006 $2,000 Joe Lieberman (D-CT)
9/15/2006 $2,100 Joe Lieberman (CfL)
2/3/2005 $1,000 Daniel Hynes (Illinois comptroller who opposed Obama in Democratic Senate primary)
2/24/2006 $1,000 Mike DeWine (R-IL)
3/22/2006 $1,000 Jim Talent (R-MO)
8/2/2006 $1,000 Judy Biggert (R-IL)
9/11/2006 $1,000 David McSweeney (conservative Republican challenger in IL-8)
7/11/2005 $1,000 David McSweeney
5/30/2006 $500 David McSweeney
9/20/2006 $500 Dennis Hastert
9/27/2006 $500 Jerry Weller (R-IL)
3/21/2005 $1,000 CIA leak apologist Tom Davis (R-VA)
7/21/2005 $1,000 Weller, Jerry
6/22/2006 $1,000 Straight Talk America (McCain's PAC, revived in 2005)
George W. Bush, Rudy Guiliani, John Ashcroft, John Thune, Tom DeLay, Conrad Burns, Phil Crane, Alfonse D'Amato, Richard Lugar, Larry Pressler... The list of Republican recipients of Zell's money is very long. His Republican largesse goes back decades. On both a local and national level, he appears to have the best friends money can buy.
Sure, there are some token Democrats on the list, including some $1,000 donations each to Feingold and Kerry. No, I haven't done the math. But if Sam Zell gives so much as a Democratic dime for every Republican dollar, I would count myself surprised. [in fact, donations were more equitable in the 2002 and 2004 cycles, though still favoring Republicans.]. Donation records for Sam Zell's son, 40-something Matthew Zell, seem to strongly echo those of his father. To be sure, Matthew Zell gave $250 to Hillary Clinton's Senate campaign in 2000 (Zell's wife, Helen Zell, gave Clinton $2,000), but it's obvious the family overwhelmingly supports a Republican vision for this country.
So what does all this mean for Los Angeles? Difficult to say. But if this New York Times anecdote is any measure of Zell's moral character, we're in for a bumpy ride:
In 2004, The Chicago Tribune startled many people in the real estate industry by uncovering a 1976 criminal case in which Mr. Zell was charged with defrauding the Internal Revenue Service in a deal involving an apartment building in Reno, Nev. Charges against him were dropped after he agreed to testify against his brother-in-law, who went to prison.
In an interview in December 2004 with The New York Times, after The Tribune’s revelations, Mr. Zell suggested that he did not have a high opinion of journalists.
"I started out as a kid thinking that reporters are out there to do good, to expose the world to the truth," he said in an interview in his office. "Over the years I’ve gotten a lot smarter. I’ve gotten a lot thicker skin."
I won't ask what Zell thinks of bloggers, but he better have a thick skin.
UPDATE I: Have the Zells hired a Wikipedia publicist? Wikipedia reports (erroneously) that Sam Zell doesn't play politics with his political donations:
According to the Center for Responsive Politics's "Open Secrets" database, in recent years Zell has made numerous campaign contributions to both Democratic and GOP candidates, giving somewhat more to Republicans than Democrats.
Funny that I am reading the same database and coming to an entirely different set of conclusions about his politics. Despite the (unsourced) statement on Wikipedia, OpenSecrets doesn't offer any summary of Zell's donations by party affiliation. I urge everyone to go through the database. Draw your own conclusions.
UPDATE II:The good news is that up until the time of shareholder approval, Los Angeles billionaires Ron Burkle and Eli Broad may still submit a higher bid (in which case Zell would receive a $25 million buyout fee, which is a low "kill fee"). Fingers crossed for a local comeback offer....