Sam Zell, 81, tycoon whose major newspaper business went bankrupt, dies

Nevertheless, in 2007 the Blackstone Group bought Mr Zell’s company – then known as Equity Office Properties Trust – for $39 billion. His own fortune was estimated at nearly $5 billion, and with holdings in residential properties, drugstores and department stores, and energy and electronics companies – a lifetime of acquisitions that made him one of the richest men in the country – he might have retired comfortably in the middle of his life. -60 years.

But seeing yet another inefficient market, he dove into the unknown world of newspapers, winning a bidding war for one of the country’s leading media companies, the 160-year-old Tribune Empire. Besides Chicago and Los Angeles newspapers, it included The Baltimore Sun, Newsday, The Hartford Courant, 23 television and radio stations, the Chicago Cubs and Wrigley Field.

A deal comes with a debt

Like many newspapers, Tribune properties were bleeding advertising revenue and Internet readership. The company had been at auction for months when Mr Zell – insisting his interests were purely economic and not editorial – offered $34 a share in a complex deal to take the company private as part of a plan to employee share ownership.

It took control in December 2007 in an $8.2 billion deal whose financing only required it to pay $315 million, but which burdened employee-owners with more than 13 billion in debt, including $5 billion in existing Tribune bonds. In this highly leveraged buyout, the debt was to be repaid almost entirely from cash generated from the company’s continuing operations.

The new company was exempt from federal income tax, and the debt was reduced by the sale of Newsday, the Cubs and Wrigley Field. But the employees, who had no say in the deal, shouldered a crushing burden and won only if the company survived, while Mr Zell, for a relatively small investment, became chairman and got an option to buy 40% of the company for $500 million if it prospers.