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Media Fri Jan 04 2013

Tribune Co.'s New Owners Are Rahm Donors... Does It Matter?

By now, you've probably read that the Tribune Company announced its exit from Chapter 11 bankruptcy on Monday and appointed a new board of directors. The deal involves financing from senior creditors Oaktree Capital Management (23% equity), Angelo, Gordon & Co. and JP Morgan (holding 9% equity each), who according to the Chicago Tribune will take control of its portfolio of assets ranging from TV stations to CareerBuilder.

Most coverage of this has focused on the company's plan to focus on broadcast TV and potentially sell off its newspapers (including the Trib and the Los Angeles Times), WGN, and Chicago magazine, among other assets over a several month-long process. Prospective buyers for the newspapers include News Corp. mogul Rupert Murdoch, who has ties to several of the new board members.

However, there's another prominent figure with several links to Tribune Company's new owners -- Chicago Mayor Rahm Emanuel. In fact, individuals connected to all three controlling firms have previously donated money to his political campaigns.

According to the Center for Responsive Politics', individuals linked to Oaktree Capital Management donated $3,500 to Emanuel's congressional race in 2004 and $8,400 in 2006. Similarly, Angelo, Gordon & Co. affiliates donated at least $4,000, and those with JP Morgan gave $59,600 during the 2007-2008 election cycle. In addition, current JP Morgan chairman, president and CEO Jamie Dimon is a longtime donor to the Democratic Party, who has close ties with the mayor and several Obama administration figures.

But does this mean anything about the future of the Tribune Company and the potential future coverage of Rahm Emanuel by anything in its current "strategic portfolio of assets"?

On one hand, media holding companies run by Emanuel's friends may not have any significant bearing on his news coverage. Wrapports LLC, the company that owns the Sun-Times Media properties, includes Madison Dearborn Partners Chairman John A. Canning Jr. and Grosvenor Capital Management CEO (and World Business Chicago Vice Chairman) Michael J. Sacks on its board of directors. Members of both of these firms have also donated substantial amounts to the current mayor in the past. Yet, Sun-Times Media still reports on the mayor at his best and worst (at least from what I can tell), and Sun-Times Media-owned Chicago Reader still retains several writers unapologetically critical of everything from his cultural and economic development priorities to his battle against the Chicago Teachers Union.

On the other hand, Rahm Emanuel is no stranger to mass media politics. His brother, Ari, is the co-CEO of the powerful Hollywood talent agency, William Morris Endeavor. Coincidentally, Ari is also on the advisory board of media, sports and lifestyle investment bank Raine, whose investments include Zumba and Vice Media -- an organization whose own coverage of a rather sensitive Chicago-related subject I had quite a bit to say about last fall.

While media analysts cast their bets on Murdoch, another rumored buyer for the Tribune newspaper assets is a different media mogul -- David Geffen. The philanthropist, former record executive and DreamWorks co-founder is a close friend of the mayor, and DreamWorks SKG has previously donated $25,000 in the 2007-2008 election cycle (see a pattern yet?).

With Rahm Emanuel's numerous personal and financial connections to players involved with the unfolding saga, is he going to hold any tangible influence over the future of Tribune Company? It's hard to say.

If anything, he'll have a better idea of what's going on behind-the-scenes in the coming months than we will.

Full disclosure: I previously applied for jobs in the Chicago Tribune Media Group's ad sales department in 2011.


Mitchell Szczepanczyk / January 8, 2013 8:28 AM

Based on _my_ reading of the media business press, what's likely to happen is the following: Now that the patient is out of surgery, his limbs and head will be chopped up from his torso and all the pieces will be fed to hungry cannibals. That is, the Tribune company, having recovered from a four-year bankruptcy hiatus, will see its component media arms sold off to other media companies or speculators in the coming year. (Even the Tribune newspaper, which is typically cocky in its media policy editorializing, was fatalistic for the first and probably last time.) Rahm Emanuel will have little to do with this; what's happening to Tribune is the consequence of a series of actions and reactions going back at least ten years and arguably longer -- heck, you can say that _I_ played more of a role in what's happening to the Tribune than Rahm did or does, by my helping to organize opposition to the FCC's media ownership rules in 2003 that the Tribune gambled their future on and lost. Rahm Emanuel might get a bit more headwind of what's to come, but he'll probably learn or be told what anyone reading the media business press and recent history can discern about the fate of Tribune.

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