Not So Smart

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A few readers have chastised me for second-guessing the business decisions of some of newspaper companies that are now in the worst shape. I take the point, in as much as that the current, acute crisis has a lot of do with debt servicing, which has been massively impacted by the extent of the economic crisis and which is a area of financial machinations which I don’t pretend to know a great deal about. But I cannot help thinking that the situation the Tribune finds itself in has a lot to do with some really questionable decisions by Samuel Zell. NYT’s Deal Book blog puts together some pretty choice quotes from Zell over the last year which makes for rich reading in the light of today’s events. Still seems to me like Zell massively indebted a company that already had some pretty serious existing problems. This wasn’t ten years ago, but about a year ago, when there were already real signs of a serious economic slowdown that would seriously impact the parts of the economy newspapers depend on for advertising. Of course, this was in addition to the major difficulties facing newspapers in general, because of the Internet. Sure, few people realized a year ago that we’d find ourselves in the midst of a historic financial crisis. But it seems like he did a lot to make his boat unseaworthy before he hit what he’s now calling this perfect financial storm.

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