Thursday, April 5, 2007

Sam Zell at Stanford: Trib buy, Google

Curiosity brought me to the law school today for a talk by Sam Zell, the business dealmaker who is hoping to clinch his latest -- the purchase of Tribune. The title of his talk was "Make me an offer," and he was here to discuss the $39 billion buyout of Equity Office Properties.

But the first question out of the box came from my Knight colleague, Kevin Fagan of the SF Chronicle, asking Zell to talk about the Tribune buy. Zell deferred, saying the deal was not finalized yet. But questions persisted from around the room.

Finally, he said he bought Tribune because he thought running that company would be a "fantastic challenge," especially since he doesn't see that others have succeeded. Under his tutelage, he would not allow the kind of infighting that happened between the Chandler family and the Tribune company, which he said has hurt Tribune for the past 2-3 years. He said the LA Times buy didn't look like a bad idea, but it turned out that way.

Asked whether it might have been smarter if he could have purchased a media company like Google, Zell said:
"What would happen to Google if the content they get from newspapers was no longer available? They'd have nothing. The content on Google is being paid for by newspapers, and stolen by Google. The boys at Google get this. You're going to see new deals and formulas..."
Perhaps not unlike the new coordination between McClatchy's foreign bureaus and Yahoo announced recently.

Zell ragged on Stanford Law School for not admitting him as a young man. He confessed to hating law school, but finished it and passed the bar. Despite the pain, he said he's glad he did. "Law school shapes how you think. Everything today is legal. You've got to understand it."

Meanwhile, he was so bored in academia, he said, that as a senior in law school he made $150,000 running his own real estate company on the side. Law students sitting in front of me shook their heads in disbelief.

He railed against Sarbanes Oxley (Public Company Accounting Act of 2002), then invited the audience to his Web site where he archives his annual "holiday message" to the world. This year's was devoted to his disdain for "SarBox." Even he is into multimedia.