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Tribune Co. creditors court Michael Eisner and Jeff Shell for top jobs

Former Walt Disney Co. Chief Executive Michael D. Eisner is in discussions that could lead to his return to the media spotlight – as chairman of the now-bankrupt Tribune Co.

The media company’s largest creditors are having preliminary conversations with prospective candidates who could operate Tribune once it emerges from bankruptcy, according to several people with knowledge of the situation.

Eisner, who has been dabbling in the digital world as an investor since stepping down from Disney in 2005, is among the candidates under consideration to replace Chicago real estate magnate Sam Zell as chairman of the reorganized company.

Discussions about new management at Tribune are still exploratory, people close to one of the creditors cautioned. Senior creditors can’t make changes until a plan is in place allowing the company to emerge from its nearly two-year legal morass.

Tribune owns the Los Angeles Times, the Chicago Tribune, KTLA-TV Channel 5 and 22 other TV stations and six newspapers.

Under one scenario being discussed by the senior creditors, Eisner, who is 68, would be joined by Jeff Shell, a former News Corp. cable executive who is now in top management at Comcast Corp., according to four people with knowledge of the talks. Shell would become chief executive of Tribune, replacing Randy Michaels.

Eisner was unavailable for comment, according to his spokeswoman. But he told Variety in a wide-ranging interview Monday that he has been accumulating Tribune debt. “You are talking to somebody who is buying debt in the Tribune Co. The salvation of the newspaper is some kind of pay arrangement [online], which will evolve into something significant,” Eisner said in the interview.

Shell, 44, a Los Angeles native who runs Comcast’s cable channels group from the company’s headquarters in Philadelphia, declined to comment. Earlier in his career, Shell worked for Disney on the strategic planning staff when Eisner ran the company.

Tribune and its creditors are still struggling to negotiate a settlement around charges that Zell’s 2007 leveraged buyout was a case of "fraudulent conveyance," meaning the transaction rendered the company insolvent from Day One. That settlement would serve as the basis for a plan of reorganization, but depending on how negotiations go, it could be months in coming or the case could easily devolve into litigation.

Nobody in the case doubts that senior creditors led by money center bank JPMorgan Chase and two hedge funds, Angelo, Gordon & Co. and Oaktree Capital Management, will end up owning Tribune by virtue of their $8.6 billion in claims.

But just last week, the latest round of negotiations collapsed, people familiar with the situation said, when junior creditors balked at a new reorganization proposal and creditors generally were unsettled by Tribune management’s request to indemnify its directors and officers, including Zell, from potential legal action related to the buyout.

Tribune officials are still talking to creditors and the company is expected to file a plan Friday laying out its vision of what would be a fair settlement, hoping enough creditors will get on board to get a plan confirmed by the court. Creditors have threatened to file their own plans, but have yet to do so, these people said, as they wait to see what management proposes.

All this uncertainty complicates discussions with potential management candidates. One person close to the creditors noted that when the time comes, the creditors would likely follow normal corporate practice: choose a new board and chairman, institute a formal search for a chief executive (that likely would include Michaels, the current CEO) and then make a final choice.

The senior group wants to find the best management it can to enhance the value of the equity the banks and hedge funds will end up owning in the company.

JPMorgan Chase declined comment, as did Oaktree. Angelo, Gordon & Co. did not immediately respond to request for comment. Tribune also declined comment.

According to people familiar with the matter, other executives who have been approached by one or more of the creditors about playing a role in Tribune, post-bankruptcy, include Fred Reynolds, the retired chief financial officer of CBS Corp.; Mel Karmazin, chief executive of Sirius XM Radio Inc.; Terry S. Semel, former chairman and co-chief executive of Warner Bros.; and Robert Pittman, former chief operating officer of AOL Time Warner.

Eisner was first approached about becoming a member of a reconfigured Tribune board by John Angelo, chief executive of the investment firm he co-founded with Michael Gordon, according to people with knowledge of the situation who requested anonymity because they were not authorized to speak.

Angelo is a childhood friend of Eisner’s. Those conversations led to discussion of a potentially larger role for Eisner, who, after making his mark in television programming at ABC, ran Paramount Pictures with Barry Diller in the 1970s, and then Disney. He is credited with reviving Disney in the late 1980s, but his later tenure with the company was marred by an acrimonious battle with former directors Roy E. Disney and Stanley P. Gold.

After leaving Disney in 2005, Eisner started The Tornante Co., a firm that invests in the media and entertainment business. The company’s new media studio, Vuguru, develops and finances stories for digital distribution. In 2007, Eisner also acquired Topps, maker of baseball trading cards and Bazooka bubblegum, in partnership with Chicago private equity firm Madison Dearborn Partners.

Eisner devoted a chapter to Angelo and Gordon in his forthcoming book, “Working Together: Why Great Partnerships Succeed.” Eisner describes Angelo as his oldest friend, and someone who “I know as well as perhaps anyone, aside from my own wife and children.”

Angelo, Gordon has accumulated several newspaper holdings in the last year as their parent companies have emerged from bankruptcy. As a result, the firm has interests in the Philadelphia Inquirer, the Orange County Register and the Minneapolis Star Tribune.

-- Dawn C. Chmielewski, Michael Oneal and Sallie Hofmeister

Photos: Eisner, left, by Giovanni Rufino / Associated Press, and Shell, right, by Alberto E. Rodriguez / Getty Images 

Comments () | Archives (5)

Hate to be the fly in the ointment, but charging for online access won't save newspapers, and here's why: the product they are selling online doesn't have enough value to cover the cost of producing it. I'm not trashing newspapers, I'm just sayin' ... if people won't pay for it, the value is not there. And people won't pay for it. Let's say, for purposes of argument, you find a way to get $5 a month from 200,000 subscribers. That's a lot, right? Wrong. It's not enough. That's only $12 million a year, that's nothing. That does not support a big old newsroom. That supports a decent-sized radio station but not a newspaper.

Yeah, forwhat?

I think the LA Times staff is going to be like the rest of us, soon. Looking for a job.

For an editorial staff that railed against Wall Street, about shady deals, it's kind of ironic...

I wonder if Sam Zell is going to jail for fraud.

Did you ever wonder why Eisner and Roy Disney fought?
Eisner will tear down any company he is involved with to enhance his personal wealth
Sounds like a lot more Tribune like cronyism is on its way

Excellent reporting and writing. Thank you.


No offense really intended. But, if Eisner is allowed to do what he did to Disney and others with his M.O. He is NOT a part of any solution. He gutted Disney's edge, core, and creative successes like fisherman on the bank of a river with the mornings catch. His history speaks for itself. Call what he has done, exactly what it is.

Do not recycle this guy into the Tribune. There are other, smarter choices.

In the 90's, some of the so-called experts stated that newspapers and magazines were dying dinosaurs or a dying breed. Well, it been about 15 years. Just as all the empty hype expectedly and realistically fizzled, for reasons too obvious and known by many, this Big hyped-up facade of its time was allowed tb pushed and pushed to its inevitable crash.

While a few have figured out the new animal and vehicle Print has become, too few know or realize it, or the things to do next, even as some new upstarts keep proving that it can be done with some of the things needed.

Do your own research of verifiable facts regarding magazines, newspapers, and the Net, on the Net, and the many examples of those who remain successful, other than providing quality photos fans and readers cannot get by real photographers, not just any person just grabbing and aiming a camera & pushing a button.

There are @ least Five essential, necessary, crucial elements, changes and additions, that must be attached with 1 word that spells success FOR PRINT, even after about 15 years.

The latest man-made and CEO-approved scandals, scams, and schemes of Easy-Money Mortgages certainly have had a lot to do with the dramatic drop in advertising, jobs, spending, and low consumer confidence for all Print Publishers, the SAME as Internet advertising.. It has adversely effected the bottom line and profit of BOTH Mediums.
The solutions are all In Plain Site for Print for success, for more years to come, "If........................................


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