Sam Zell

Dec. 8, 2008

Partners,

We just announced that Tribune is restructuring its debt under Chapter 11 protection. I’m sure you saw the speculative coverage last night and this morning. I would have preferred everyone get the news from me first, but since our debt is publicly traded, we had to keep this decision confidential until we had a formal board decision. The Cubs franchise is not part of the filing.

Most importantly, I want to stress that we will continue to operate our business as usual. That includes meeting payroll and covering benefits (such as healthcare, disability and others), and paying vendors for all goods and services they provide to us going forward.

As is routine with Chapter 11 filings, we have filed “First-Day Motions” to get court approval on these and many other programs that are essential to continuing our businesses without disruption. We expect to get approval on these motions within the next few days.

You are also most likely wondering about the other aspects of your compensation. The 401(k) is unaffected by the filing, and in general, the existing benefits in the pension and cash balance plans are also unaffected by the filing. The ESOP is part of the ownership structure, so its value and role long-term will be determined in the restructuring. We believe the structure is a valuable asset to the company and that there are strong reasons to preserve it.

So, how did we get here? It has been, to say the least, the perfect storm. A precipitous decline in revenue and a tough economy have coupled with a credit crisis, making it extremely difficult to support our debt. All of our major advertising categories have been dramatically impacted.

By restructuring our debt, we will reduce the pressure on the company’s operating businesses, enabling us to pursue our vision of creating a sustainable, cutting-edge media company that is valued by our readers, viewers, and advertisers, and that plays a vital role in the communities we serve.

This filing should not impact the way you do your jobs on a day-to-day basis. We will continue to operate responsibly in a challenging environment - aggressively managing costs and maximizing revenue opportunities. These are all things we would do whether or not we were restructuring our debt.

Our challenges are consistent with those facing all media companies, and an increasing number of companies across a variety of industries today. The reality is that we - along with the rest of the country - have very little visibility on where the economy is headed and how our businesses will perform given the recession.

The good news is that we have great brands, and we produce great products every day. It’s up to all of us to continue to focus on what it is we do best.

As your Chairman and CEO, I will continue to be actively engaged in the business and I remain committed to the company, to you and to our lenders. Randy, Gerry and the rest of the management team are equally dedicated to moving this company forward.

I’m sure you have a lot of questions that this email doesn’t cover. I encourage you to visit TribLink where we’ve posted some anticipated Q&A, or call the toll-free number we’ve established - 888-287-7568. We’ll also have information posted on Tribune.com. But, recognize that there is quite a bit we don’t know - or that we cannot confirm - at this point.

I am proud of the work we have done at Tribune in the last year. I’ve seen strong determination to take hold of this company and put it on a new course. As a result, we’ve reduced costs, gained market share, and laid the groundwork for creating a new business model out of traditional media. This restructuring
will give us the time we need to build that model, to secure sustainable and growing cash flow, and to achieve the success the talented partners in this company deserve.

Sam

Tribune gave its rank and file employees a fair amount of stock through profit sharing. That was great when the shares were trading at $70. As the stock fell into the $30s, our Tribune stock was just a reminder that layoffs were coming and half our nest egg was gone.

Free advice: Diversify. If you still work for a newspaper — any publicly-traded newspaper — and your 401K is flush with company stock, it may be worth talking to your financial advisor. When Enron went toes-up, a lot of its employees were hit with a double-whammy: not only were they suddenly out of work, their Enron-heavy 401Ks were near worthless.

Or check for local listings for these jobs in your own hometown newspaper – if you’ve still got one!

The Miami Herald Is Said to Be for Sale

Thanks to a certain sports editor for sharing this info.

www.ehealthinsurance.com

www.insureonebenefits.com

American Journalism Review Survey

  Have you been forced out of a daily newspaper job in the last 10 years? Were made to leave under circumstances that were other than totally voluntary? American Journalism Review is doing a survey to find out what people in your situation are doing now and how they were treated as they were shown the door. Please go  to www.ajr.org and click on the link to the survey. And tell your
friends.

Dec. 3

Folks,
 
Today, Cox Enterprises is announcing it is bringing together its TV, radio and newspaper businesses under one umbrella group named Cox Media Group.  Sandy Schwartz will lead the new group and Sandy has asked me to lead the newspaper group.  As part of the transition, I am pleased to announce we are appointing Alex Taylor, currently publisher of Grand Junction, Colorado Daily Sentinel, to succeed me here at PBNI.   Alex will begin in his new role here at the beginning of the year and I will begin work at CEI in Atlanta.  Sandy will be sending out an e-mail later this morning with further details.
 
This announcement is somewhat of a surprise to many of us, including me, considering my short tenure here at PBNI.  We have talked about the rapid changes we must make to adapt to the new realities of our business which includes management changes from time to time.
 
Two important points—first and foremost, you will be getting an outstanding publisher in Alex Taylor.  Alex’s passion for our business, employees and journalism is unmatched.  I am confident you will enjoy his leadership.  Secondly, Alex will report to me and both of us will work hard to make a seamless transition and remain on course to turnaround PBNI.
 
Alex comes to the company at an important juncture in our rebuilding efforts.  Many difficult decisions had to be made this year to position the company for future success.  Now that these major efforts have been implemented we can focus more effectively on growing our digital and niche business while reinvigorating our print newspapers.
 
Next year you will hear about more exciting efforts to engage you in teamwork, communication, product development, marketing and sales.  We are truly becoming a sales and content company.  You along with Alex will help shape our future.
 
Make no mistake about it, we are in the midst of the most difficult period for newspapers ever and next year appears to be equally challenging for our economy and advertising sales.  We will have to remain nimble, flexible and creative to achieve our goals. I am confident you are up for the challenge.
 
Lastly, my personal thanks to all of you for the kindness, respect and support I have received.  This was a short, tumultuous run and I am impressed with your resiliency, graciousness and professionalism throughout this year.  Thank you for your outstanding work and I know Alex will enjoy the same support.
 
Doug
 
Doug Franklin
Publisher
The Palm Beach Post

If you are a journalist who is moving from a full-time print job into the world of blogging, it is important to recognize that they too have a brand to protect and promote. Don’t make the same mistakes the New York Times is making.

Want to pimp your blog? Throw a comment below with a link to your own blog and short description as to why we should click over.

Telling It Like It Is

If things were going great (elections, Super Bowls, Y2K, etc.), there was food. If things were going lousy (9/11, exploding Shuttles, elections, etc.), there was food.

This was the first election since I was old enough to vote that I didn’t spend the night at the newspaper working. I was somewhat sad until I read that the Raleigh News and Observer was limiting their staff to two slices of pizza on election night.

The executive editor eventually rescinded the two-slice maximum but the psycological damage and message is clear: when pizza is rationed, you job isn’t safe.