First they came for the Socialists, and I did not speak out....

And when did you stop beating your wife?

 

Inequality to this degree has not been a fact of life. The average CEO used to make about 25 times as much as the average worker. That's still reasonably close to the ratio that exists elsewhere in the world today. In America the ratio is now about 500-1.

The top individuals have never, ever had anything close to this share of the total income or wealth.

 

Everyone can go home now. The Invisible Hand has spoken. Inequality is a fact of life. No sense doing anything about it.

 

That is a really, really tough call for me.

For starters, I'm pretty sure Zell did not profit. He put in $315 million and lost it.

As for the plan to keep doing what they were doing without the debt load . . . well, there already was about $4 billion of debt, and the stock was in free-fall. Shareholders were beyond antsy. Stock price went from about $52 a year or so before to about $25 (and this was early 2007, BEFORE everything fell apart). Had the company stayed public, Wall Street likely would have sent the stock into the $10 range. And there still would have been massive layoffs, as there were at every company that stayed public).

So Zell comes along, an outsider (new ideas!) offering $34/share and a few innovative ideas about lessening the company's tax burden.

Hard to find many people at the time who didn't view the latter as the lesser of two evils. As for me, well, pay me $34/share for the shares in my 401(k), and thank you very much. I'm not gonna get a better deal anywhere else.

And, oddly enough, his plan COULD have worked. In another era. They even built 6% yearly revenue declines into their solvency projection. But then came 2008 and a 30% drop in revenues . . . .

Just the wrong idea at the wrong time in the wrong industry.

 

BTE, how was the stock structured? I know that with Knight-Ridder, the problem was that it was all common stock, which made it ripe for a hostile takeover.

My point was that Tribune had no debt until the takeover. And without debt payments, the company would have remained profitable even as it struggled to adapt. That has always been the case, newspapers could pay for the operation for a much longer time than was believed, whether it was Tribune or McClatchy or others. It was the debt from the highly (perhaps even completely) leveraged purchases.

Regarding Zell, remember his infamous declaration to reporters that he would be no worse for wear if the plan failed, but they sure as hell would.

 

In the old days (1990s), the stock put into employees' retirement accounts was preferred (with a guaranteed minimum value).

At some point around 1999 or 2000, it was all converted into common. Perhaps because of the Times-Mirror merger.

TRB had a substantial debt load before Zell came along. Zell's deal was for $8.2 billion and pushed the company $13B into debt, the difference being the outstanding debt that had not been retired.

 

For the same reason that the wealthy claim that if they only had less taxes and more money in their pockets that they'd create more jobs. If the poor have money in their pockets, they'll spend it on food and shelter, which will help out the economy. The difference is, the poor would actually spend the money. The wealthy will just park it in the Caymans.

 

Exactly. There's nothing fact of life-ish about how preposterously wide the gap between the 1 percent and everybody else is today. It ain't how it was when this country was doing far better economically. It is something relatively new, and it's not something that necessarily needs to be.

 

How's the euro, Ragu?

For a mod who is supposed to keep things calm around here, you sure do insult the fucking shit out of people and ratchet things up.

I neglected that Tribune did have debt -- several other newspaper companies didn't at the time, until their purchase -- so my bad. But it wasn't nearly what Zell made it, and it wouldn't have led to the destruction of the company. Look at a company like Knight-Ridder, which existed perfectly fine until a hedge fund manager forced the sale to McClatchy, which was all on credit, and that destroyed two companies (and a few others if you follow the sell-off chain).

If Sam Zell weren't rich to begin with, you would argue that he did so much damage that he shouldn't have a pot to piss in. But because all you ever want to do is fellate the rich, you would never say that.

Your anger and your incessant bleating on behalf of the people who have destroyed this economy doesn't do anything to convince me that you're right. It just makes you sound fucking evil.

So kindly go fuck yourself, mod.

 

If newspapers were profitable if not for debt, people would be founding newspapers and raking in the profits.