The Silent Mastermind
Former editor Jack Fuller turned up in the Tribune June 12 with an essay on the evolu-tion of American diplomacy during the war in Iraq. “Moral aspiration can be but a sniff away from blind and intolerant self-righteousness,” Fuller cautioned–or lectured, some would say. The author of an astute but occasionally priggish book on journalism ethics and of several novels–the one I read, Convergence, is a dandy cold war thriller–Fuller had been a leader not to every reporter’s taste. “He wore his beret and Brooks Brothers trench coat,” one reporter recalls sarcastically. “He played classical music in his office and pondered.”
Fuller returned Monday, July 3, to the op-ed page, this time with an argument that “no government is good enough to entrust with the absolute power that capital punish-ment entails.” But between those two essays, his name was nowhere to be found in the Tribune, even though its business pages throbbed with coverage of a story he’d once been central to–the war within the Tribune Company between Chicago and Los Angeles.
Now the fate of the company is on the line. On May 30 it announced its intention of buying back up to 75 million shares of stock valued at more than $2 billion. But the Chandler family of California, which controls about 12 percent of the stock, objected to the plan and declared that the better way to tap the latent value of the stock was to break up the company or sell it.
The Tribune Company climbed into bed with the Chandlers in March 2000, when it swallowed the Times Mirror Company, an acquisition disingenuously described in the pages of the Tribune as a “merger,” even a “marriage.” The city room of the Times Mirror flagship, the Los Angeles Times, saw it for what it was: a conquest and occupation.
“We are building the multimedia company of the future,” Tribune Company CEO John Madigan told investors a year later. He talked about synergies binding the company’s newspapers and radio and TV stations, about “integrated media” and “sharing and enriching content, cross-promoting and cross-selling.” He allowed that “archaic rules and regulations” stood in the way of the company’s multimedia tomorrow, but he expected Washington to sweep them away.
Washington didn’t. The FCC refused to relax its rules forbidding common ownership of TV stations and newspapers in single markets–confronting the Tribune Company with the prospect that it eventually would have to sell off properties and kiss multimedia localism good-bye. The IRS didn’t cooperate either; it ruled that the company owed nearly $1 billion in back taxes and penalties from a 1998 deal involving Times Mirror and a publishing house. In 2004 a circulation scandal hit Newsday, another major daily acquired with Times Mirror. The Internet refused to surrender its secret moneymaking formula. Readers disappeared. Advertisers weren’t interested in multimedia buys. In just the last year and a half Tribune Company stock has lost 40 percent of its value.
Tribune executives say the Times, the acquisition that should have showered the company with profits, was bloated and wasteful and needed to be taken in hand. But though they cursed Times leaders privately they kept cutting that paper slack, intimidated by its rep-utation and size. There was probably no good way to run the Times from Chicago; the west’s greatest newspaper was sure to despise and resist its occupiers whatever they did. The Tribune Company’s blithe acquisition of the Chandlers’ larger but less affluent Times Mirror chain, which followed a slipshod process of due diligence, is today regarded by institutional investors as misbegotten from day one.
On June 22 both the Tribune and the New York Times ran articles about a string puller crucial both to that acquisition and to the Chandlers’ recent rebellion against Tribune Company management. He’s Thomas Unterman, an attorney presented in those stories as a family loyalist who’s made himself rich by making the Chandlers richer. In the Times piece he’s called a “living legend” among “tax-avoidance aficionados.” The Tribune’s David Greising places the “savvy financial maestro” once again “behind the scenes” but “at the center of the action.”
A Tribune veteran told me he read Greising’s profile and “wanted to go take a shower.”
No mention was made of Fuller in either story. But the deal went down in 2000 only after Unterman and Fuller–who’d been editor and then publisher of the Tribune in the 90s and in 2000 oversaw all Tribune Company papers–put their heads together. Madigan had raised the idea of combining the companies in an April 1999 conversation with Times Mirror CEO Mark Willes and followed up with a couple of letters. Willes couldn’t see it. “In hindsight, [Madigan] had in his mind outright merger,” Willes told the Tribune in 2000. “I was looking at cross-promotion opportunities. . . . And I was under the impression that the company couldn’t be sold because of the nature of the trusts.” These were trusts through which the Chandlers owned 65 percent of Times Mirror stock.
“When Willes shunned Tribune’s early entreaties,” the Tribune reported at the time, “Tom Unterman, a former top Times Mirror executive [he’d been chief financial officer], told Tribune Publishing Co. president Jack Fuller that the Chandler family . . . would be willing to discuss such a deal.” Unterman and Fuller already knew each other, and Unterman at this time was a financial adviser to the Chandler trusts. The two of them began negotiating behind Willes’s back.
In the end the trusts were circumvented and the deal was done. Many hands were involved, but Fuller claimed a large portion of the credit and was given it. A Newsweek article by John McCormick–today a Tribune editorial writer–called Fuller the “architect of an $8 billion takeover that has everyone in the publishing industry asking what happens next.” Under the “cerebral ex-reporter and novelist,” McCormick wrote, Tribune Company newspapers “have been the most lucrative in the industry,” and the Times Mirror deal established him as “one of the most influential newspaper executives in the country.”
Those were heady days. But by 2003 the paint was peeling off the deal. That’s when Dennis FitzSimons, who’d come up through the Tribune Company’s broadcast side, succeeded Madigan as CEO and chairman of the board. Fuller was in line for those positions.
Fuller and FitzSimons didn’t like each other much, and as 2004 ended, Fuller quit. The company gave him a $51,500 monthly retainer for “consulting services” that rubbed even some of his many admirers the wrong way and office space in the Tower. He gave the company a signed guarantee of “nondisparagement.” That is, he wouldn’t say anything about it that wasn’t nice.
Reached at home in Chicago, Fuller told me he’s decided to say nothing to anyone, including Tribune reporters, about Unterman and the Times Mirror deal. I told him that back at the paper his reputation has taken a beating.
“It is what it is,” he said.
News Bite
8 As his career in radio drew to a close, National Public Radio gave my brother-in-law John McIlwraith a national audience. On All Things Considered he was the commentator who’d show up now and then to wryly recall his impoverished youth in Scotland. In 2001 catastrophe brought him back to the air: a doctor told him his stomach was cancerous and had to be removed. John explained on NPR that this terrible news wasn’t a death sentence but a life sentence: “I have to get on with my life because it might leave me soon.” So he arranged a good-bye party for his stomach. My sister baked a ham.
John survived without a stomach, and a few months ago had cause to prepare another commentary. “This week I received my inheritance,” he wrote. “It was not a fleet of vintage Rolls Royces. I guess [my father] forgot to tell us where he had buried the family fortune. But the doctors have told me that I have inherited my father’s Alzheimer’s disease.” He feared that his family would gather round to offer sympathy. “I would like to avoid this so I may continue to look in the mirror and see myself as a whole person.”
This commentary wasn’t broadcast. John was told that NPR had already done something on Alzheimer’s. Then it turned out that wasn’t what he had. John was afflicted with Lewy body disease, a rarer, more aggressive dementia with the added dimension of psychotic hallucinations. As it hap-pens, Lewy is the disease that earlier this year claimed Otis Chandler, the publisher who turned the Los Angeles Times into one of the world’s great newspapers. Last week John died of it in Vancouver.
Art accompanying story in printed newspaper (not available in this archive): photo/AP Photo/Rodrigo Abd.