Newsflash: Sam Zell Admits He's a Rube

It was pretty clear from the get-go that Sam Zell had no idea what he was getting into when he bought the Tribune Co. -- other than the fact that he saw an opportunity to gain control of a distressed asset, in keeping with the real-estate philosophy that made him a billionaire and earned him the nickname "the grave dancer."

Now, however, Zell has publicly admitted as much, telling Bloomberg TV that the Tribune acquisition was in hindsight "a mistake." This brings to mind the comment that the proudly profane Zell once muttered under his breath to a reporter who, in a public forum, had the temerity to ask him a question about his commitment to journalism -- namely, "F--k you."

 "By definition, if you bought something and it's now worth a great deal less, you made a mistake and I'm more than willing to say I made a mistake," Zell said. "I was too optimistic in terms of the newspaper's ability to preserve its position." Phil Rosenthal has a fuller recap in the Chicago Tribune, or what's left of it.

The question is, now what? Zell and his band of former radio folk clearly have no feel for the TV and newspaper industries, and certainly no regard for the latter's larger mission that goes beyond just trying to make a profit. Yet as he stated, there's limited opportunity for him to shed these assets in the current climate. This raises the rather unappetizing prospect of Zell trying to "fix" his mistake -- and possibly throwing out the baby with the bath water. That should also send a shudder up the spines of the major studios that Tribune -- which declared bankruptcy -- still owes money from various programming deals.

Everyone in print journalism is hurting right now, but Zell's approach to Tribune staffers has been especially ruthless. Unfortunately, Zell has resisted selling off Tribune properties piecemeal -- among other things, the dude appears to hate any deal unless it can be structured to avoid taxes -- which would be the best hope for salvaging something from the mess he and his crew have made of things.

At this point, a breakup remains the least-miserable alternative in terms of allowing the Los Angeles Times and other properties to find a sense of equilibrium in the hands of a different owner. Then again, while Zell admitted to a mistake, he didn't go that extra mile and say he intended to rectify it, only that "all options" would have to be considered.

Based on past performance, that's hardly reassuring.