Comments on: Is Sam Zell Smart Like a Fox? http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/ Jeff Nolan's take on investment, innovation, entrepreneurship and the technology industry Mon, 06 Feb 2012 06:44:37 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Tribune Co Bankruptcy UPDATED: Black Monday — Tribune Co. Files for Bankruptcy | Venture Chronicles http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/comment-page-1/#comment-307550 Tribune Co Bankruptcy UPDATED: Black Monday — Tribune Co. Files for Bankruptcy | Venture Chronicles Mon, 08 Dec 2008 23:38:07 +0000 http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/#comment-307550 [...] looked back at what I wrote when Zell first announced the deal to buy the Tribune Company. I was cautious at the time to not offer an opinion about the sanity of a newspaper company at that [...] [...] looked back at what I wrote when Zell first announced the deal to buy the Tribune Company. I was cautious at the time to not offer an opinion about the sanity of a newspaper company at that [...]

]]> By: Brian Despain http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/comment-page-1/#comment-101254 Brian Despain Tue, 10 Apr 2007 20:25:16 +0000 http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/#comment-101254 Clearly if you can sell off or in this case probably restructure the non performing assets you are going to see a great upside. In this case the newspapers are dragging down performance of the stock while I am willing to bet that those 47 web properties have real value. Clearly if you can sell off or in this case probably restructure the non performing assets you are going to see a great upside. In this case the newspapers are dragging down performance of the stock while I am willing to bet that those 47 web properties have real value.

]]> By: Jeff http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/comment-page-1/#comment-101224 Jeff Tue, 10 Apr 2007 18:41:40 +0000 http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/#comment-101224 Brian, You hit the nail on the head. Zell buys undervalued assets that still have intrinsic value. The Trib Co. has a diversified media business but the reality is that the newspaper business still generates the lion’s share of revenues. The stock has fallen over the last 2 years, about half it’s value has been wiped out yet the revenue only declined marginally in that period. Zell sees a business that is still economically viable even if it is dying (literally as readers themselves die off) but thinks he can make a return. Whether it’s a good deal or not will be left to history but it would be a tragic error to simply write it off as “Zell is going to lose billions” when 1) that’s impossible, he only has $315m of his own money in the deal, and 2) there is an interesting financial angle that is being ignored. Brian,
You hit the nail on the head. Zell buys undervalued assets that still have intrinsic value. The Trib Co. has a diversified media business but the reality is that the newspaper business still generates the lion’s share of revenues. The stock has fallen over the last 2 years, about half it’s value has been wiped out yet the revenue only declined marginally in that period. Zell sees a business that is still economically viable even if it is dying (literally as readers themselves die off) but thinks he can make a return.

Whether it’s a good deal or not will be left to history but it would be a tragic error to simply write it off as “Zell is going to lose billions” when 1) that’s impossible, he only has $315m of his own money in the deal, and 2) there is an interesting financial angle that is being ignored.

]]> By: Brian Despain http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/comment-page-1/#comment-101207 Brian Despain Tue, 10 Apr 2007 17:40:38 +0000 http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/#comment-101207 Clearly people are looking just the newspaper portion of the deal and saying, "Newspapers, that's just crazy." Jason Calacanis made his nut by drastically screwing writers at Weblogs Inc and paying them a pittance. I suspect that most people don't understand the economics of newspapers. Newspapers, especially smaller regional papers can be quite profitable. Look at the other assets in the transaction. It seems like a good deal to me. Clearly people are looking just the newspaper portion of the deal and saying, “Newspapers, that’s just crazy.” Jason Calacanis made his nut by drastically screwing writers at Weblogs Inc and paying them a pittance. I suspect that most people don’t understand the economics of newspapers. Newspapers, especially smaller regional papers can be quite profitable. Look at the other assets in the transaction. It seems like a good deal to me.

]]> By: Jeff http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/comment-page-1/#comment-100818 Jeff Mon, 09 Apr 2007 14:33:56 +0000 http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/#comment-100818 Tony, The way I read the deal is that the Trib Co. "intends" to sell the Cubs at the end of the baseball season, which means that the asset is part of the deal that Zell put together. Assuming the Cubs are sold Zell would then use the cash from the sale of the Cubs to pay down the debt, because by the end of the baseball season Zell should have this deal done. Tony,
The way I read the deal is that the Trib Co. “intends” to sell the Cubs at the end of the baseball season, which means that the asset is part of the deal that Zell put together. Assuming the Cubs are sold Zell would then use the cash from the sale of the Cubs to pay down the debt, because by the end of the baseball season Zell should have this deal done.

]]> By: tony http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/comment-page-1/#comment-100719 tony Mon, 09 Apr 2007 07:36:33 +0000 http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/#comment-100719 he doesnt get the cubs, that will be sold separately. he doesnt get the cubs, that will be sold separately.

]]> By: Samuel Zell Needs to Understand the Web » SELaplana http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/comment-page-1/#comment-100698 Samuel Zell Needs to Understand the Web » SELaplana Mon, 09 Apr 2007 05:00:23 +0000 http://jeffnolan.com/wp/2007/04/08/is-sam-zell-smart-like-a-fox/#comment-100698 [...] reading here, here, [...] [...] reading here, here, [...]

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