Tribune Co. names new CEO, keeps Zell chairman

AP News
Posted: Dec 02, 2009 6:07 PM

Sam Zell, the real estate mogul who took Tribune Co. private a year before the media company was forced to enter bankruptcy protection, is stepping down from the CEO post.

Tribune said Wednesday that Tribune's chief operating officer, Randy Michaels, will take over as chief executive, with Zell remaining as chairman. Michaels also will join the board.

In a statement, the company said Zell suggested the leadership change to the board.

Tribune operates 23 television stations in such cities as New York, Washington and Seattle. It also owns such newspapers as the Chicago Tribune, the Los Angeles Times and The (Baltimore) Sun.

Michaels, 57, who got his start as a radio engineer in college, comes to the top job after running the division that includes Tribune's broadcast stations and Web sites. He was named chief operating officer in May 2008.

It's not clear whether Michaels and Zell will be able to stay in their jobs when Tribune emerges from Chapter 11 protection, which isn't expected to happen until next year. Tribune denied requests to interview Zell and Michaels.

Ken Doctor, a media analyst with Outsell Inc., said Zell's move to step down as CEO may improve his chances of hanging on at Tribune if he wants to remain.

"It's been Zell's deal," he said. "To me it's like removing the lightning rod."

However, Doctor said, Tribune's lenders are likely to end up with ownership of the company, and they may be more interested in selling the company in pieces than running it.

Some Tribune creditors have been investigating Zell's buyout of Tribune, which created most of its $13 billion in debt and eventually led to the company's bankruptcy filing last December. They want to propose their own plan for turning the company around.

An attorney representing those creditors, who hold more than $4 billion in Tribune debt, did not return calls seeking comment on Michaels' appointment Wednesday.

On Tuesday, U.S. Bankruptcy Judge Kevin Carey in Wilmington, Del., granted Tribune more time to submit a reorganization plan. Now Tribune has exclusive rights to file a plan until Feb. 28, with the possibility of a further extension after a mid-February hearing.

After working as an engineer at the radio station at State University of New York, Michaels worked at a small TV and radio station operator, Taft Broadcasting, and helped found the radio company Seven Hills Communications in the early 1980s. After merging with Jacor Communications, the company was bought by Zell in 1993. Three years later, Michaels was named CEO of the company.

In 1999, it was acquired again, this time by Clear Channel Communications. Michaels continued to lead the company as a division of Clear Channel.

After Zell took charge of Tribune in December 2007, he hired Michaels as executive vice president and CEO of its broadcasting and interactive businesses, which include the 23 local TV stations and more than 50 Web sites.