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By Casey Bukro

Ethics AdviceLine for Journalists.

The historic 20-year nosedive of the U.S. newspaper industry, shedding 77 percent of its jobs, is usually blamed on the internet and plummeting advertising revenue.

Seldom does anyone mention management marauders who, in the name of shareholder value, strip newspapers of their value by skeletonizing the staff and selling assets, turning them into shadows of themselves.

This involves management decisions, which sometimes allow newspaper owners and executives to sell out because it is in their personal financial interest. This is the part of the story of newspaper decline that is not told because it’s usually hidden. They are boardroom decisions that don’t get much publicity, until details leak out through court documents.

Look no further than Chicago, which has a rich history of attracting raiders to its newspapers. They included Keith Rupert Murdoch and the late Sam Zell. They ruled at different times over the Chicago Sun-Times and the Chicago Tribune, leaving those newspaper worse off when they left, like the devastation left behind by a tornado.

Newspaper ruination

What they did to the Chicago Sun-Times and the Chicago Tribune says a lot about the ruination of newspapers.

Let’ s start with Murdoch, an Australian media mogul who runs newspapers in the U.S. and Great Britain that stress sex, violence, crime and racial discord. It’s said he practices “the black art of journalism.”

Murdoch controls News Corporation, a media powerhouse headquartered in New York City with companies that dominate the news, television, film and print industries. Originally incorporated in Adelaide, South Australia, the company re-incorporated in the U.S. in 2004.

In 1984, one of his companies, News America Inc., bought the Chicago Sun-Times from Field Enterprises, owned by half-brothers Marshall Field V and Ted Field, for $98 million. The sale included the newspaper’s building and property in a downtown riverfront location and the Field Newspaper Syndicate.

Chicago’s oldest

The Sun-Times calls itself the oldest continually published daily newspaper in Chicago, tracing its lineage to the 1844 founding of the Chicago Daily Journal, which also was the first newspaper to publish the rumor – believed false – that a cow owned by Catherine O’Leary started the great 1871 Chicago fire by kicking over a blazing lantern in the barn. The true cause was never determined.

The modern paper grew out of the 1948 merger of the Chicago Sun, founded in 1941, and the Chicago Daily Times, published from 1929 to 1948. In recent times, there were four Chicago daily newspapers, and the competition was savage, just as journalists like it and one of the reasons Chicago was considered a great newspaper town. It was no place for sissies.

The Chicago Daily News closed and Chicago Today merged with the Chicago Tribunes, leaving the Sun-Times and the Chicago Tribune to battle for news.

Unkept promise

In 1984, Marshall Field V promised the newspaper’s managing editor that he would never sell the Sun-Times to Murdoch, but he did.

Some of the newspapers top writers, including columnist Mike Royko, who called Murdoch “The Alien,” defected.

Roger Simon, another Sun-Times columnist, recalled a dinner involving Murdoch and about two dozen employees. Murdoch promised, “as he always did when he bought a paper, to retain its quality and integrity. It was a lie, and we knew it was a lie.”

 Writing in Politico, Simon said he was alarmed by what Murdoch might do to the Sun-Times. But editors told him to calm down, that Murdoch had given his personal assurance that the paper’s quality would be maintained.

Editors gone

“Within a few months, all those editor were gone,” Simon wrote. “They had quit in disgust or had been shown the door. Murdoch imported his own thugs and stooges from Britain to run the place. ‘Quality’ was just another word for snobbery, they said. It was not what the masses wanted. And those who disagreed were elite and effete.”

The late Roger Ebert, the paper’s film critic, recalled the first day of Murdoch’s ownership, when he started to lay out a new front page.

“He threw out every meticulous detail of the beautiful design, ordered up big, garish headlines, and gave big play to a story about a North Shore rabbi accused of holding a sex slave. The story turned out to be fatally flawed, but so what? It sold newspapers. Well, exactly, it didn’t sell papers. There were hundreds of cancellations. Soon our precious page 3 was defaced by a daily Wingo girl, a pinup in a bikini promoting a cash giveaway.”

Murdoch changed the appearance of the spunky tabloid newspaper by surrounding stories with thick black borders, making the paper appear to be in mourning.

Mistaken city identity

Murdoch and his minions seemed to think Chicago was a blue collar town, ripe for sex and sensationalism, which worked in Britain despite its staid reputation. Successful newspaper operators are supposed to know something about the character and culture of the communities they serve.

Jack Fuller, the late president of Tribune Publishing, put it this way: “Newspapers grow out of the soil of the community.” A paper should reflect its region and aspire “to have a distinctive voice that relates well to the community it serves.”

Murdoch didn’t care. He has an operating formula that caters to the sordid.

“All newspapers are run to make profits,” Murdoch told his biographer. The path to profitability is a matter of choices. Murdoch’s path involves sensationalism, pandering to advertisers and sexual interests and promoting a flaming right-wing political and social agenda. Plus daily doses of photos of women wearing practically nothing.

Ethical standards

Other newspapers reach profitability another way, through admired and respected journalism based on highly ethical standards.

Since Murdoch is a member of the world’s billionaires club, it must be acknowledged that he gives his audiences what they want. He works on the idea that he can’t go wrong by going low.

It can be argued that Murdoch showed a generation of future hedge fund operators how it’s done. He slashed the staff from 320 Newspaper Guild members to about 245 and in 1986 sold the newspaper for $145 million in cash. Separately, he sold the Sun-Times wire service, renamed the News America Syndicate, reportedly for $20 million to $30 million.

Chop!

Then Murdoch skipped town, leaving him richer and the Chicago Sun-Times a far weaker newspaper than he found it, with a smaller staff and without its wire service. Chop! That’s how it’s done.

Murdoch has said “money itself doesn’t interest me. You make it to go on building the business.”

But that’s not what he did at the Sun-Times. He drained it of revenue and its power to be profitable. Then he abandoned it.

Enter Sam Zell

Then there is the late Sam Zell, born Shmuel Zielonka in Chicago in 1941; died a real estate tycoon in 2023.

A bald, squat, foul-mouthed gnome-like man standing about 5-feet-five, Zell was called “the grave dancer,” a nickname derived from an article he wrote by that name explaining how he profited by scooping up failing and undervalued properties and selling them. In the real estate business, they are called distressed properties or assets. It’s said Zell, with a swatch of white beard covering his chin, got rich being a contrarian and an iconoclast.

“I was dancing on the skeletons of other people’s mistakes,” he wrote. But in Chicago, he became best known as the evil genius who loaded Tribune Company with $12.9 billion in debt and drove it into bankruptcy, using an Employee Stock Ownership Plan (ESOP) he created.

Board accepts

In April 2007, the Tribune’s board of directors accepted Zell’s proposal to take the company private in a complex, $8.2 billion transaction using the ESOP, part of a pension plan for Tribune employees, and ending with the flamboyant Zell becoming chief executive of one of the nation’s most conservative, strait-laced media companies.

It was called a leveraged buyout, meaning it involved an acquisition of one company by another using a large amount of borrowed money or debt to meet the cost of acquisition. In this case, the ESOP was buying Tribune Company.

Although Zell invested $315 million in the scheme, he was risking someone else’s money – the pension plan for 18,000 Tribune employees.

A tool

To Zell, the ESOP was just a tool. If anything, he looked upon Tribune employees with disdain. As it turned out, he was a stain on the Tribune’s reputation.

The Chicago Tribune, founded in 1847, was a media powerhouse , the biggest in the Midwest with influence to match. Its highs and lows are legendary, from its support of Abraham Lincoln for president, to the erroneous 1948 “Dewey Defeats Truman” headline still discussed in journalism classrooms.

Tribune Company, which became the Chicago Tribune newspaper’s parent, by 2001 owned 26 broadcasting stations and 15 newspapers staffed by 4,500 journalists worldwide and covering 80 percent of U.S. households. It also owned the Chicago Cubs and Wrigley Field.

Like other newspapers, the Chicago Tribune was weakened by the loss of advertising in the 2000s to the growing internet and two recessions that struck the U.S., including the severe Great Recession from 2007 to 2009.

Going private

Always alert for a way to profit from someone’s misfortune, Zell, the Grave Dancer, devised the plan with Tribune management’s approval, to take Tribune Company private. Among the advantages, management believed, was getting the company out of the glare of public scrutiny in tough economic times.

For Tribune employees, it was confusing since the Tribune for a time had two ESOPs, one that was old and the new one created to be a financing vehicle to buy back billions of dollars worth of publicly owned Tribune shares and make a lot of shareholders, Tribune board members, Tribune management and bankers rich.

To get the scheme rolling, on April 1, 2007, the newly formed ESOP bought 8,928,571 shares of Tribune common stock for $250 million. Those shares were split into 56,521,739 shares.

Tender offer

Next came the most important part of his plan: On April 25, 2007, Tribune Company announced that it started a tender offer to purchase up to 126 million shares of its common stock for $34 a share. It borrowed $7 billion at the same time, using $4.2 billion to pay for the shares, and $2.8 billion to finance existing debt.

The loans came from Citibank, Bank of America, JP Morgan Chase and Merrill Lynch.

The targeted 126 million shares the company intended to repurchase amounted to more than 50 percent of outstanding Tribune common stock, with a total value of about $4.3 billion.

So many Tribune Company shareholders wanted to cash out that the tender offer was “oversubscribed,” meaning they wanted to sell more than the 126 million shares sought. So Tribune management bought more.

Offering shares

Employees could offer shares they held either in the old ESOP (not the new one Zell created) or from their Employee Stock Purchase Plan.

The final step in the tender offer came when Tribune Company merged with the ESOP, making the ESOP owner of the company. Tribune Company borrowed another $4.2 billion to buy the rest of the shares that were publicly owned.

That meant Tribune Company now was about $8.2 billion in debt because of its stock buy-back.

No federal taxes

One major advantage came with the stock buyback campaign – taxes. The Tribune became an S corporation, which pays no federal taxes because shareholders are responsible for taxes.

But wait! There’s more.

Back in March, 2000, Tribune Company agreed to acquire Times Mirror Company in Los Angeles for $8.3 billion in cash and stock, the largest acquisition in the history of the newspaper industry.

By 2007, the Tribune’s debt load from the Times Mirror merger was about $5 billion. Together with the $8 billion in debt from the stock buy-back, Tribune Company was straining under a debt load rounded out to $13 billion. Industry onlookers had warned this was risky and urged Tribune management to reconsider the deal.

Plot thickens

Here’s where the plot thickens – some of what was driving the tender offer in the background.

California’s Chandler family, owners of the Times Mirror Company, ended up with a 20.1 percent stake in Tribune Company, becoming the largest shareholder, in the 2000 transaction. The family grumbled about the sinking price of Tribune stock shares, and began agitating for a corporate breakup or sale. They wanted to cash out and avoid more losses.

Tribune employees also did not like the drop in Tribune stock values. For years, the Tribune was considered a solid investment.

Investment advice

Invest in companies you know and understand, say investment advisers. Many Tribune employees loaded up on Tribune stock as part of their pension plans, thinking it was wise.

In 2000, Tribune stock was selling for up to $55.69 a share. That $34 a share offered by Tribune in the buyback was a big drop in value, which could be counted as a capital loss on tax returns.

The Chandler Trusts supported the Tribune’s tender offer deal because it gave them a chance to cash out of Tribune stock. The Chandlers were putting a lot of pressure on the Tribune.

Poisoned chalice

Tribune attitudes toward the Chandlers differ. Some say the Chandlers and their wily negotiators tricked Tribune executives by selling them the Times Mirror along with a hidden $1 billion IRS tax debt. Some  called it a “poisoned chalice” or a tax time bomb waiting to explode. Others said the Tribune knew about the huge tax bill, but decided to go ahead with the transaction anyway.

Once the leveraged buyout was finished, an analyst commented: “If there is a problem with the company, most of the risk is on the employees, Zell will not own Tribune shares. The cash will come from the sweat equity of the employees of Tribune.”

Zell era

Next, the Tribune entered the tumultuous Zell era.

Zell began visiting Tribune Company offices and staffs, introducing himself as the new boss.

“There’s a new sheriff in town,” he’d crow, in speeches peppered with profanity.

It quickly became clear that he thought of newspapers as department stores with merchandise to sell to customers. Give the customers what they want.

At one of those staff meetings, a photographer said readers like photos of puppy dogs, but a newspaper can’t just give them photos of puppy dogs all the time.

Expletives

“F…..k you!” Zell bellowed. If they want pictures of puppy dogs, give them pictures of puppy dogs. Zell accused journalists of being arrogant for thinking they knew what readers should read.

It got worse.

Zell handpicked Randy Michaels, a former radio executive and disc jockey, to be the Tribune’s chief operating officer. Later, he became president and chief executive officer. Next, Zell brought in a new management team, mostly from the radio business. Like Zell, they had little newspaper experience, though it accounted for more than 70 percent of the company’s business. They become known as “Zell guys.”

Lipinski resigns

In 2008, Ann Marie Lipinski resigned as the Tribune’s editor, telling confidantes that she had grown weary of Zell guys who dropped F-bombs every three or four words, showing their admiration for and loyalty to Zell, who spoke that way.

It went far beyond the way they talked.

The New York Times, in a story headlined, “At Flagging Tribune, Tales of a Bankrupt Culture,” described sexual activities in Tribune Tower and a smoke-filled gambling casino in the 24^th floor paneled office once occupied by Publisher Robert R. McCormick.

“Based on interviews with more than 20 employees and former employees of Tribune, Mr. Michaels’s and his executives’ use of sexual innuendo, poisonous workplace banter and profane invective shocked and offended people throughout the company,” the Times reported. “Tribune Tower, the architectural symbol of the staid company, came to resemble a frat house, complete with poker parties, juke boxes and pervasive sex talk.”

A Zell guy

A Tribune editor described how a Zell guy entered the fourth floor newsroom holding a large open container of beer, the kind purchased at ball parks. The editor told him it probably was not a good idea to be seen drinking beer in the newsroom, upon which the Zell guy spilled the beer on the floor, dropped the container and walked away.

Zell and Michaels decided that Tribune Company newspapers must shrink, and one of the ways to do that was holding journalists accountable for their productivity. This meant measuring column inches written by every reporter. Michaels cited statistics that he said showed the average journalist at the Los Angeles times produces about one-sixth of the content produced by counterparts at Tribune Company papers in Baltimore and Hartford, Connecticut.

“You find out that you can eliminate a fair amount, a fair number of people, without eliminating very much content,” he said, even allowing for investigative reporting. “We believe we can save a lot of money and not lose a lot of productivity.”

Slash to profitability

It was a plan to slash themselves to profitability, and led to 4,200 layoffs.

Editor&Publisher magazine reported that Zell found a “novel” way to fund the layoffs. “In a novel twist, they’ll be funded with overages from Tribune’s employee pension plan.”

At the time, 9,280 Tribune retirees were drawing pensions, and I was one of them. I checked the plan’s rules and regulations and found they stipulate pension funds must be spent only for pensions. I notified the U.S. Department of Labor and a bankruptcy judge that Zell was messing with our pension money, and violating the pension fund rules and regulations.

About the same time, the Labor Department sent a subpoena to Tribune Company asking for “an extensive range of documents” about the ESOP and the pension fund. In 2012, The Labor Department announced a settlement giving $32 million to Tribune ESOP participants.

Joyride over

Zell’s joyride in the media world ended badly on Dec. 8, 2008, when Tribune Company filed for bankruptcy protection, the largest in the history of the American media industry. It came a year after Zell took over.

“I made a mistake,” Zell told Bloomberg Television. “I was too optimistic.” More famously, Zell described his Tribune incursion as the “transaction from hell.” The Economist magazine called him “overZellous.”

“So, how did we get here?” Zell asked in a memo to Tribune employees. “It has been, to say the least, the perfect storm. A precipitous decline in revenue and a tough economy have coupled with a credit crisis, making it extremely difficult to support our debt.” He said he was proud of the work he did at the Tribune.

Zell’s main strategy for survival was to sell assets. He sold Newsday, a paper based in Long Island. And he sold the Chicago Cubs and Wrigley Field to the Ricketts family for about $845 million. Critics said he could have gotten $1 billion for the Cubs if he had acted sooner.

Bankruptcy advisers

Tribune Company worked with bankruptcy advisers investment bank Lazard Inc. and law firm Sidley Austin to weigh its financial options.

Zell is an example of why businessmen should avoid businesses they know little to nothing about. He was accused of trashing Tribune Company, despoiling its pension fund and inflicting misfortune on the company’s employees.

Zell was loud and obnoxious, intentionally drawing attention to himself. Others, more discrete, were just as damaging.

For the Tribune, the storm just began. Two months earlier, in September, six Los Angeles Times reporters filed a class action suit in Los Angeles accusing Zell and former Tribune CEO Dennis J. FitzSimons of taking the company private to enrich themselves and of reckless management that was destroying the company’s value.

Lawsuit flurry

A flurry of lawsuits followed, with astonishing details of alleged self-serving by Tribune’s top management and others involved in the 2007 tender offer and bankruptcy proceedings.

“This lawsuit arises out of the destruction of Tribune Company by greed, fraud and financial chicanery,” said a suit filed by Marc S. Kirschner as litigation trustee for the Tribune Litigation Trust in the federal district court in southern New York.

“The facts of this case show how a desire to make fast bucks for shareholders led to the bankruptcy of one of America’s most venerable media companies, with massive job cuts and huge losses for Tribune’s creditors. Under the law, those creditors, which lent billions of dollars to Tribune, were supposed to be paid before the shareholders of the company.

Trusts and foundations

“Instead, the wealthy trusts and foundations that controlled Tribune instigated a leveraged buyout that funneled more than $8 billion to them, other corporate insiders and thousands of fellow shareholders, enriched the company’s management with tens of millions of dollars of bonuses and other financial incentives, and paid huge fees to Wall Street advisors.

“Tribune was left an insolvent wreck and filed for bankruptcy less than one year after the transaction was completed.”

The fifth amended complaint, filed August 2, 2013, named 125 defendants, starting with Dennis J. FitzSimons and including Zell.

Tribune officers got more than $79 million in leveraged buyout proceeds, while members of the Tribune board of directors got $28 million, according to the suit.

Fiduciary duty

Tribune board members and management had a fiduciary duty to put the welfare of the company and employees ahead of their own interests, said the suit, but that “quickly changed when the risk of insolvency was shifted entirely away from themselves and onto Tribune creditors through the LBO proposed by Zell.”

Banks were accused of engaging in insider trading, acting on non-public information about the Tribune’s financial condition and bankruptcy plans.

Lawyers in such cases might be accused of exaggeration, since the amounts of money involved in the Tribune leveraged buyout and bankruptcy are beyond the comprehension of most people – millions and billions.

Examiner’s report

But a court-appointed examiner in the Tribune bankruptcy case, Kenneth Klee, decided that the buyout was marred by “dishonesty and lack of candor” by Tribune Company management so that the deal rendered the conglomerate insolvent from the moment the two-step tender offer transaction closed.

Klee concluded it was “somewhat likely” that the second part of the $8.2 billion stock buyout was an example of “fraudulent conveyance,” meaning the debt that came with the deal overwhelmed the company’s ability to pay its bills. Klee wrote he found no evidence that Zell or third parties committed intentional fraud.

Ungrateful workers

Never repentant, Zell called Tribune employees uncooperative and ungrateful. And, apparently irritated by accusations that he and others were greedy, Zell said: “In my experience, newspaper people are at least as greedy as anybody else, and any perception to the contrary is perpetuated by the media itself.”

It’s impossible to know if Zell was talking about newsroom journalists or media executives, who are not journalists. Or both. Possibly, he did not know the difference.

Dan Neil, one of the former Los Angeles Times journalists who sued Zell, answered Zell this way: ”Newspaper people are not greedy. I’m pretty sure Mr. Zell has met greedier people in the finance and investing sector as opposed to journalism. It just demonstrates that he never got the meaning of a media company. It’s not just a business but a public trust. Like hospitals, they have obligations that extend beyond their profit and loss.”

Eventually, some of the lawsuits reached conclusions.

Decade passes

More than a decade after Tribune Company went private, more than 50 former Tribune directors and senior executives agreed to settle a case in a Delaware federal bankruptcy court by paying $200 million.

They included Zell and former Tribune Company CEO Dennis FitzSimons (who got $50 million through stock sales and incentives in the buyout); Crane Kenney, a former Tribune executive; Miles White, a former Tribune board member; and Tim Knight, a former Tribune Company executive.

Michaels out

Randy Michaels lasted until 2010, when he was pushed out as chief executive for tarnishing the company with boorish, sexist behavior and creating a general atmosphere of juvenile unprofessionalism in the corporate suite.

Ever vigilant for a chance to make a profit from failure, brazen billionaire Zell in 2011 sued former shareholders of the bankrupt Tribune Company, contending he should be paid along with other creditors if a court ruled that the 2007 buyout he engineered was a fraud.

Tribune Company emerged from bankruptcy on Dec. 31, 2012, after a grueling four years of corporate conflict. It emerged with new owners, a newly appointed board of directors and freed from massive debt.

Company splits

Tribune Company split into publishing and broadcasting companies.

Weaker now and faced like most newspapers with redefining itself in the new digital world, Tribune Publishing Co. attracted some strange – and eventually the worst possible – bedfellows.

Tribune Publishing Co. became a plaything for a rich technology entrepreneur, Michael Ferro Jr., who, on a whim, in 2016 changed the company’s name to Tronc, which was widely ridiculed. Ferro was nonexecutive chairman and the largest shareholder of the newspaper chain. The name changed back to Tribune Publishing Company in 2018.

Tronc supposedly stood for “Tribune Online Content,” but published reports show that Ferro had been toying with the name earlier, when he was majority owner of the Chicago Sun-Times. The word means a type of fund into which shared money is put, like tips.

Tronc

While the newspaper company was known as Tronc, the landmark Gothic Tribune Tower, built in 1925, was sold in 2016 for $240 million to a Los Angeles developer, who turned the tower into multi-million-dollar luxury condominiums near downtown Chicago. Tronc was the largest tenant and moved editorial operations to another location, eventually to the printing plant, which was demolished to make way for a casino. Printing operations moved to suburban Schaumburg.

Tribune was struggling, and its employees knew it. They practically begged some billionaire with an appreciation for the Chicago Tribune’s history to rescue the company.

Columnist Mary Mary Schmich wrote “a letter to the next owner of the Chicago Tribune. We need you.” A few billionaires thought about it. Recognizing that hedge fund Alden Global Capital was interested in buying the Tribune, investigative reporters David Jackson and Gary Marx wrote: “Will the Chicago Tribune be the next newspaper picked to the bone?”

The answer was yes.

Vulture capitalists

In 2021, Tribune Publishing Company fell prey to Alden Global Capital, a New York distressed investment hedge fund with a reputation for aggressive cost and staff-cutting. Companies like Alden are known as vulture capitalists who suck the life out of companies they buy.

Alden already had a 32 percent stake in Tribune Publishing, mostly acquired from Ferro.  A Tribune writer called it “a final bird flip to Chicago journalism from Michael Ferro…”

Alden bought the company for $633 million in a transaction approved by Tribune Publishing shareholders, becoming the second-largest newspaper owner in the U.S. behind Gannett.

Back in debt

“It didn’t take long for Alden Global Capital to put its imprint – and significant debt – on Tribune Publishing….,’ wrote Chicago Tribune’s Robert Channick. The deal was leveraged with two loans totaling $278 million, putting the company in debt again.

That took Tribune Publishing private. Until the Alden purchase, Tribune Publishing was debt-free, profitable and had more than $250 million in cash.

Ironically, Alden founder, Randall D. Smith, was another grave dancer. He made his fortune on Wall Street by investing in failing companies, as did Sam Zell. Alden was dancing on a skeleton left by Zell’s mistakes. Smith is described as a pioneer in vulture capitalism, buying failing companies and dismantling them.

Chopping

Then Alden began chopping, which had started while the Tribune was in bankruptcy.

The Chicago Reader reported lists of those who took buyouts or were let go. Tribune reporter Kevin Pang also Tweeted such lists, until one day he Tweeted, “I was told to stop writing about this, because it was upsetting some people. OK, I’ll stop. But this is bigger than work. This is about real people and real friends.”

When the Tribune was fully staffed, it had about 700 editorial workers, including those in bureaus around the world. By 2009, that dropped to 480 newsroom employees. After further slashing by Alden,  the Chicago Tribune staff fell from 111 to 76 by 2024.

The Chicago Tribune once covered the planet. Today, it covers mainly local and state news and fills several pages with one story.

First in 171 years

In 2018, while the Tribune was known as tronc, the media company agreed to recognize the Chicago Tribune Guild, the first newsroom union in the newspapers 171-year history.

“We have been badly mistreated by a series of corporate owners, tronc only being the most recent, and we’ve decided to take some control over the future of our journalism in the city of Chicago,” said Charles J. Johnson, a Tribune home page editor and an organizer of the Guild chapter.

For anyone with a sense of Chicago Tribune’s history, it was an astonishing development. Chicago Tribune management had always been staunchly hostile to organized labor.

According to Tribune lore, workers had been fired or demoted for even thinking of such a thing. They might find themselves covering police at Midnight.

Anti-union history

“The Chicago Tribune, the mother of all major anti-union newspapers – both in its editorial philosophy and newsroom policy – had just bowed to its employees’ desire to form a union,” wrote Stephen Franklin.

But that did not mean working conditions improved.

On Feb. 1, 2024, more than 200 journalists took part in the first strike ever staged in the famous newspaper town, and, at this point the first newsroom strike in the Chicago Tribune’s 177-year history.

“There’s never been a newspaper strike in Chicago,” said journalist Rob Warden. It included Tribune reporters, photographers and staffers from six other newsrooms around the nation.

The 24-hour strike was called to protest years of “slow-walked” contract negotiations and to demand fair wages.

Corporate greed

Union president Jon Schleuss accused Alden Global Capital of gutting newsrooms and being “hellbent on destroying America’s newsrooms.” Corporate greed in media is “out of control,” said Schleuss, “and hedge funds are at the core of the corporate greed.”

This is the story of just two Chicago newspapers brought low by corporate raiders. It’s impossible to say how many more newspapers fell victim to such forces, not just because of an unfavorable economy or a business model based on advertising that did not work anymore.

But this much is clear: The newspaper industry once was among the largest employers in America. In the early 1900s, about 24,000 newspapers were operating in the U.S.

Rate of decline

The Medill School of Journalism at Northwestern University charted the rate of decline, and found they were disappearing at the rate of two or more a week. Until only about 6,000 newspapers, mostly weeklies, were left in 2023. This led to “news deserts” with no local newspapers.

Newspapers lost 77 percent of their jobs over the last 20 years, the steepest dive by any of the 532 industries tracked by the Bureau of Labor Statistics. By one account, there were nearly 458,000 employees in the newspaper publishing industry in 1990; that fell to 183,000 by 2016. Employment in internet publishing and broadcasting rose from about 30,000 to nearly 198,000 in the same period, far from replacing jobs lost at newspapers.

Journalists like to point out that the press is the only profession explicitly mentioned and protected by the U.S. Constitution. They say newspapers are not just property but part of an institution with public purpose.

Reporters enemies

Good luck with that, with a president-elect, Donald Trump, who calls journalists “enemy of the people” while crowds cheer. Americans continue to register record-low trust in the mass media, according to a new Gallup poll.

Journalists seldom get high ratings in public opinion polls. Popularity was never part of their mission.

But it is somewhat remarkable, not too surprising, that government officials watched a U.S. industry disappearing without doing much to help. It’s not surprising because newspapers make it their business to spotlight governmental corruption, and few government officials want to encourage that.

Struggling to survive

With many newspapers struggling to survive, a bill was introduced in 2009 in Washington allowing newspaper companies to restructure as nonprofits for educational purposes, giving them a tax status similar to public broadcasting companies.

More recently, the Journalism Competition and Preservation Act of 2022 and the Local Journalism Sustainability Act were proposed. One involves tax credits and the other use of news providers’ content.

Newspapers don’t get the kind of assistance given to coal mining communities where coal mines are closing as the U.S. moves to a clean-air economy. The U.S. Economic Development Administration offers relief to those communities.

More targeted, the U.S. Treasury Department’s American Rescue Plan offers tax and unemployment benefits for those who lost work because of the Covid-19 crisis.

Free enterprise

But I get it, free enterprise means survival of the fittest, dog-eat-dog, no mercy, sink or swim.

For the U.S. newspaper industry, a lot of damage already has been done.

Also remarkable was the lack of law enforcement, in the Chicago Tribune bankruptcy case for example, where insider trading and breach of fiduciary duty seemed fairly blatant. Some of it resembled corporate sabotage. There’s a law against that, too. Buying a company and loading it with debt to buy it seems like corporate sabotage. That’s allowed but seems unfair.

Courts are supposed to protect businesses from nefarious practices. Good luck with that too.

Activist judges

Judges these days openly take sides politically. Supreme Court Justices Clarence Thomas and Neil Gorsuch say they find flaws with the landmark 1964 New York Times vs. Sullivan decision which limits the ability of public officials to sue the media for defamation.

Thomas has been blistered by media accusations of alleged ethics violations, and he might be looking for a way to silence them.

Newspapers are not likely to get much sympathy from local powers either.

Seeking a savior

When Tribune Company was looking for a savior, Joe Cahill, a writer for Crain’s Chicago Business, pointed out other metropolitan dailies afflicted by woes found shelter in nonprofit ownership.

“And no Chicago foundation has signed up for a mission to save the Tribune from a hedge fund that has gutted other papers it owns,” wrote Cahill.

Chicago’s business leaders always knew where to drop off their press releases. But that was business.

No tears for lost newspapers

Likewise, when local newspapers and the writers who delivered useful or amusing articles vanish, where is the outrage or expressions of regret? None that I have seen. Even for writers who fell into that rare category of “beloved,” writers who knew their community and wrote movingly about it. None. Mary Schmich was that kind of writer, and so was Royko.

To counteract some of that disappearance, the Medill School of Journalism and Crain’s Chicago Business both have embarked on campaigns to rescue journalism. Medill’s is called the “Local News Initiative,” and Crain’s published a series of articles on “a race to save the news.”

Both lack one thing: A serious look at the predations by plundering corporate raiders and how to avoid them.

The trouble with reformers is they tend to think everything is on the level and people are acting in good faith. The Tribune Company case revealed that a lot of people knew it was on a disastrous course, headed for bankruptcy. Are there no safeguards against the predations of hedge funds? Should there be?

No stupidity law

It can be argued there is no law against stupidity, and the Tribune case falls into that category.

It also can be argued that the kind of businesses that attracted Zell and Alden Global Capital are dubbed “under performers.” They were weak and vulnerable, the kind that attract sharks like blood in the water. So keep your business strong and watch for insiders who might profit by  making it weak through skulduggery and chicanery.

The New York Times is not an under performer, so we are not reading stories about corporate raiders picking it apart. Even strong companies can be attacked by hostile takeovers, but that’s another story.

No friends

Let’s learn from the fate of Tribune Company: Don’t expect  help from government or even local business leaders. You are on your own.

Publisher Joseph Pulitzer argued that newspapers should have no friends.

Perhaps the answer is for the newspaper industry itself to find ways to lend assistance to flagging newspapers by creating a fund to do that.

The Price-Anderson Act, for example, is a law that establishes a financial protection system for people who may be injured or held liable in a nuclear accident. All U.S. nuclear power plant operators contribute to the fund.

Worth saving?

Something like that is a possible solution, at least short-term, for ailing newspapers, depending on whether society decides that newspapers are worth saving, or should go the way of buggy whips. In the long run, society decides that by deciding what it wants to buy, although worthwhile institutions can be preserved by donors or other ways.

The intent of the U.S. Constitution is to protect the free flow of information, not necessarily the method by which it is delivered. In the far distant future, newspapers as we know them might become extinct and replaced by new technology.

James Squires, former editor of the Chicago Tribune, saw a shift in the newspaper business and wrote about it in his book, “Read All About It! The Corporate Takeover of America’s Newspapers.”

“This development coincided with the passing of newspaper ownership into the hands of corporate managers less concerned with press tradition than with business profitability,” he wrote. “The decline of the free press had begun.”

Bean-counters

Those who run newspapers only for profitability are called bean-counters.

Families that owned newspaper in the past often considered themselves journalists, who tend to be idealists. Money management skills were sometimes lacking. It can be argued that’s why the cold-blooded bean-counters took over.

To their sorrow, many newspaper managers did what they always did; innovation was not on the playbook. Editors often were obsessed with reader “navigation” through the newspaper. It was like rearranging the deck chairs on the Titanic.

One more thing about this look into the fate befalling newspapers in Chicago and across the country: hedge fund owners seem intent on trashing  journalism businesses, as though showing their contempt. They strip them not only of revenue, but of their dignity and value.

They remind me of tomb robbers of ancient Egypt. After looting the royal tombs of Egyptian pharaohs, the robbers smashed everything left behind, possibly to destroy the magic that supposedly protected them. Looting and desecration. It was an insult and a form of murder, since the looters took what the pharaohs needed in the afterlife.

Legends say those tomb raiders were cursed to suffer bad luck, illness and death.

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The Ethics AdviceLine for Journalists was founded in 2001 by the Chicago Headline Club (Chicago professional chapter of the Society of Professional Journalists) and Loyola University Chicago Center for Ethics and Social Justice. It partnered with the Medill School of Journalism at Northwestern University in 2013. It is a free service.

Professional journalists are invited to contact the Ethics AdviceLine for Journalists for guidance on ethics. Call 866-DILEMMA or ethicsadvicelineforjournalists.org.