The [Sam Zell] Papers
While Sam Zell's deal to buy Tribune Company still hangs in the balance, a profile of Zell in The New Yorker makes it clear that he's not the kind of guy you'd like own your local newspaper. Let's take a look at both that profile, Zell the Party Animal, and Zell the Evil Mobile Home Landlord.
"However, Maggie Wilderotter, who is the chairwoman and C.E.O. of Citizens Communications and has sat on the boards of three of Zell's firms, said that she had spoken with him many times about Tribune Company before he made his bid, and that high-minded considerations played no part in his thinking. 'An important part of the Tribune portfolio is TV stations,' Wilderotter said. 'He's buying a media company that has assets other than newspapers.'
"[Ron] Burkle and [Eli] Broad told Tribune's directors that they were eager to preserve the newspapers' public-service role, which they believed was increasingly jeopardized by owners who were focussed solely on profitability. The media mogul David Geffen, who offered Tribune two billion dollars for the L.A. Times in 2006, made a similar argument. 'But that's not what drives Sam,' Wilderotter said. 'His thought process throughout this whole thing has always been about the business proposition. I never, ever heard Sam say, I'm doing this because I love the Chicago Tribune, or I'm committed to the city of Chicago. It would have been totally out of character."
Or, one might say, it might display character.
"The way I look at transactions, and the way I look at risk, I have no room for sentiment," Zell says.
Like journalism values.
This I like.
"Early in his career, [Zell] decided that he would not bow to convention in his speech or his attire. In the seventies, he would sometimes wear a red polyester jumpsuit and a gold chain to meetings with bankers. He once said that if you dress oddly and you're really good at what you do you're seen as eccentric; but if you're not so good you're seen as a schmuck."
Journalism is in large part about piercing appearances to reveal reality, but I'm not sure anyone is more obsessed with appearances in our society than the media, who like to dispense advice to pols and corporations about how best to create appearances to better manipulate the masses.
"Zell is easily provoked. He has frequently castigated analysts who have been critical of one of his companies. At a recent dinner party, the mention of Hillary Clinton's name prompted him to use a four-letter obscenity to describe her."
The word reportedly was cunt. Of course, if Hillary Clinton were a businessman Zell would probably have great admiration for her/him.
I wonder what this might mean for Tribune Company's ethics policies.
"A couple of years ago, Zell's close friend Will Weinstein, a money manager who was teaching at the University of Hawaii, asked Zell to address a class on business ethics. Several of Enron's leading executives were on trial at the time, for fraud and other crimes. Weinstein had opened the session to the public, and someone in the audience asked Zell whether, in the current environment, 'where some seem to be doing almost anything to be profitable, does not the concept of "business ethics" seem to be an oxymoron? And do you accept that there is a concept of greed? And how would you define it?'
"'Jesus Christ!' Zell replied. 'I mean, would you like a pulpit as well? I mean, when does the indictment come out? I mean, are people in the business community different from you, or you, or you?' He pointed angrily at the questioner and others nearby. 'C'mon! We're talking about weaknesses and we're talking about strengths! Are human ethics an oxymoron? I don't think so. Neither do I think business ethics are an oxymoron. It's real fun to take a shot at the business community. After all, those motherfuckers are getting all the money, right? But let me tell you something: I'll put my work schedule against anybody you know, including you, and I work my ass off every day! The idea that somehow or other the business community is full of all these greedy characters - you should see the greed in teachers' unions! You should see the greed in any political organization! Business is made up of a whole group of individuals, and within that group there are straight people, there are not-straight people, and then there's a whole bunch of us in the middle, who some days are straight and some days we're not.'
"Weinstein looked alarmed. 'You're not honestly putting yourself in that middle category?'
"'Oh sure, why not?' Zell replied. 'St. Sam - that's an oxymoron.'"
"Sam is brighter and faster than most but he's abrasive and arrogant and he belittles people," retired Itel Corporation board chairman Herbert Kunzel said.
Itel is a company Zell took over in a, um, controversial manner. According to a Wall Street Journal article cited by the New Yorker, "Zell sabotaged a planned acquisition, excoriated the company's CEO, and refused to shake hands."
What's that he said about greedy business people?
"In 1993, he bought a ninety-four-per-cent stake in Jacor Communications, a Cincinnati radio-station company, through one of his vulture funds. Jacor was profitable, but the company had borrowed too heavily and was deep in debt; Zell and a partner, David Schulte, paid down some of the debt and replaced the company's top executives. At the time, federal law limited to thirty-six the number of stations a company could control. But in February, 1996, the Telecommunications Act was passed, deregulating the radio business. 'I called the management in here and I said, Gentlemen, this is a once-in-a-lifetime opportunity: I want you to go out and buy all the radio stations you can,' Zell recalled. 'I'll figure out how to pay for them. And in two years we went from seventeen stations to two hundred and thirty-four, and in 1999 we sold out to Clear Channel.'"
Nice. For him. But for the public, a disaster.
Then again, Zell's not all bad.
"Zell hinted that he would replace Tribune's top executives. He said that if Hurricane Katrina hit Chicago and the executives in Tribune Tower were cut off from the outside world, he thought that the L.A. Times and the other Tribune companies would do just fine. He also said that he believes that Tribune needs to become more decentralized by giving local executives more control. The Times, he said, should be able to function without someone telling it what to do. 'Zell's folks are very critical of the corporate culture here, and they see many of the top guys as personifying it,' a Tribune publishing executive told me, referring to the company's leaders."
"Zell told me, 'I've had offers on every single asset in the portfolio. Chuck Schumer' - the New York senator - 'calls me, because he's hustling for some people who want to buy Newsday. Baltimore people are calling, Allentown's calling, Florida's calling, and, in L.A., David Geffen and Eli Broad. So all I can tell you is that for a dead industry with no future there are an awful lot of schmucks who want to take it away from me!'"
Zell is drawing the wrong conclusion. Readers, citizens and civic leaders are desperate for local ownership of their media. There also might be some sentiment involved.
"The galas that Zell hosts each September bear little resemblance to the old treasure hunts. Zell hates black-tie events, so guests receive T-shirts in advance, which feature obscure clues to the identity of the evening's performer. (Recently, these have included Bette Midler, Elton John, and Paul Simon.) For the September, 2006, party, three tour boats picked up the guests from Chicago's Navy Pier and headed into Lake Michigan. 'He got everybody on these boats and put them out there for about an hour,' one guest recalled. 'This was a crowd of pretty trendy people, all these type-A personalities, and they got like hornets! They were saying, Why couldn't we come by car? Are we going to have to come back on these damn things? I know he did it deliberately. So the parties have changed, but the theme of getting your guests mad and crazed is still there.'"
What a prick.
2. From the Tribune's late Inc. column, September 1998: "Those three tents at Des Plaines and Kinzie? Area residents, as well as Metra commuters looking down from their trains, were curious. Now it can be told: They were Cirque du Soleil tents for Chicago gazillionaire Sam Zell's annual party for associates, friends and relatives - with Ziggy Marley, Earth Wind & Fire and the Isley Brothers providing entertainment. Even Jam Productions' Jerry Mickelson, in attendance, was impressed. In the past, Zell has hired Jay Leno, Village People and the Beach Boys to entertain. More than 700 guests attended - including all the staff at Marche, which catered the bash."
Evil Mobile Home Landlord
1. "A Unit 5 follow-up tonight on a battle that is being played not only in Chicago but also across the country in so-called mobile home parks."
3. Dear Sam Zell.
From The May Report:
Subj: Elder Abuse coming soon to a park near you compliments of Chicago Billionaire
Chicago Billionaire Grave Dancer and self proclaimed "Vulture Investor" heads a multibillion-dollar publicly traded corporation (MHC) that makes it's livelihood shaking down fixed income old people, mostly female, for their lifesavings, leaving in its wake widespread poverty, despair and hopelessness.
Where once existed banana bread recipe websites, parties, and a host of charitable activities, now exists increasingly empty communities as MHC waits out the last oldsters in each.
It's happening in California, Florida, Delaware, Colorado, Illinois, it's happening in more than half the states, from coast-to-coast in 200 mobile home parks owned by this rapacious, predatory, lawsuit-loving corporation.
MHC's leader is a Chicago boy. For some he is a Wall Street genius. For some he is Satan incarnate. He, himself a senior citizen, does not even pretend to feel anything for the people he is steamrollering. Nope, it's all about the money. In Santa Cruz, California, MHC managed to transfer $70 million dollars of equity from the former homeowners to MHC's coffers.
Across the country Senators, Assemblypersons, Attorney Generals, and a whole host of legal representatives agree on one thing. MHC and its team of legal thugs are immoral criminals. But so far no one has figured out how to stop them.
We are hoping that by educating the masses with this kind of exposure we can help apply pressure and develop a groundswell to stop MHC. At the very least we can inform and forewarn senior citizens and mobile home communities nationwide about the true nature of MHC and this systematic pillaging of old folks.
Mobile Home Communities (MHC), through an endless barrage of lawsuits containing thinly veiled blackmail and threats, is harassing thousands of elderly, fixed income mobile home park residents. (MHC owns over 150 parks, one-third in California).
In De Anza Mobile Home Park in Santa Cruz, after 8 years of defending against a string of lawsuits, both the city and De Anza's elderly residents threw in the towel. MHC prevailed in a legal challenge to rent control, causing widespread financial ruin, simply because there was no more money to fight off MHC's team of legal thugs.
I am requesting that the Attorney General investigate this matter because it impacts thousands of California seniors living in mobile home parks. The unbridled activities of MHC are having the effect of WMD's.
MHC's CEO does not slap around Aunt Betty and steal her purse. He goes after hundreds of lifesavings at a time, leaving in his wake depression, anger, fear, hopelessness, poverty and despair.
Is this not financial and psychological abuse of the worst kind?
The Attorney General's offices in several other states are actively defending and protecting their seniors from the abuses of this billion-dollar corporation.
Letter to Wall Street Journal 3/2004:
Warren Buffett, GMAC and others hoping to profit from an upswing in the mobile home industry cannot afford to ignore a critical factor affecting any turnaround.
This factor also accounts for why anyone would deliberately trash a mobile home before vacating it.
Mobile home parks, traditionally mom-and pop-businesses catering to seniors, have been discovered by Wall Street REIT's which are gobbling up parks and aggressively raising rents.
From California to Delaware, owners of mobile homes, especially the elderly, find life in a double-wide increasingly hard as rents rise faster than their income. Most mobile home residents own their home but not the land, which they rent from the park owners.
In a nationwide land-grab contributing to the repossession of 100,000 mobile homes last year, MHC, the largest and most aggressive mobile home park owner in the country (they own 200 parks in 23 states), is systematically challenging and overturning local laws and ordinances, even those designed to protect seniors from unfair rent increases.
Under the guise of "fiduciary responsibility" to their shareholders, MHC squeezes residents by aggressively raising rents as much as five-fold. The prohibitive cost and impracticality of moving a mobile home leave the mobile-home owner little choice but to pay up or get out. New buyers are scared away by the astronomical rent for the land.
This effectively shuts down the marketplace. With no buyers, the resident has no recourse but to abandon the home when they fall ill, die or, in some cases are evicted for failure or inability to pay the (exorbitant) rent increases. MHC then steps in and buys the abandoned home from the unfortunate lender for pennies on the dollar.
This egregious business practice is leaving in its wake widespread poverty, despair and hopelessness, especially among the nations senior citizens who account for half of all mobile home residents.
Any court victories favoring residents are inevitably followed by appeals and further legal challenges until at last the mostly elderly residents are left with no money to continue the fight.
The question is, where do you draw the line between social consciousness and what you need to do to satisfy Wall Street?
Is it any wonder that even the generally docile senior citizen is tempted to consider trashing a home upon leaving, given that the new de-facto owner is the very corporation responsible for their misery?
Posted on November 14, 2007
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