The Deal from Hell (24 page)

At his core, FitzSimons had a fierce competitive streak. He often challenged fellow employees to basketball shoot-outs at the company gym, and usually won. He stood just over six feet tall, with neatly-parted gray hair and a well-trimmed mustache. In a profile of FitzSimons,
Los Angeles Times
reporter Tom Mulligan had compared him to a boxer from the bare-knuckled era. But FitzSimons also was a careful, detail-oriented, and determined worker who learned to capitalize on the growing pool of market research data to hone his sales pitches. He rose rapidly as a marketing representative for several broadcast companies, including TeleRep, where he was group sales director in Chicago.

By 1981, at the tender age of thirty-one, FitzSimons accepted an offer to run the ad sales unit of Viacom International, where he developed a sharp eye for spotting TV shows with audiences that would appeal to the right advertiser. When economic commentator Louis Rukeyser developed
Wall $treet Week
, a popular stock advice show on public television, FitzSimons suggested that Viacom create a version for commercial television. When Rukeyser agreed to the deal, the road was paved for FitzSimons to sell American Express as the ad sponsor, a lucrative step for his career and his pocket. He was named director of sales and marketing at a Viacom station in Hartford,
Connecticut, a year later. By 1982, he'd accepted Dowdle's invitation to the Windy City.

When FitzSimons arrived at Tribune, newly elected Ronald Reagan had recently installed FCC commissioners with a friendly regulatory attitude toward companies that wanted to acquire and own lots of television stations. Television syndicators, meanwhile, had dreamed up alternatives to the big-three networks' national broadcast audiences by cutting barter contract deals. Instead of acquiring programming, or shows, for affiliate stations like television networks, syndicators bought talk shows and sitcoms and then swapped the programming with big independent television stations like WGN in return for designated commercial space that they could sell to advertisers.

Syndicators hoped to sign up enough independent stations to create a mass audience and sell advertising space to big national advertisers. Stations like WGN got cheap programming, against which they could sell local advertising and make a bundle. With experience in local and national advertising, FitzSimons offered a wealth of knowledge and was an ideal fit for barter markets, which would prove extremely lucrative for Tribune Company.

Within a year of arriving at Tribune, FitzSimons rejuvenated WGN's ad sales operations and boosted local ad revenue by 5 percent, a steep jump in a highly competitive business. In 1983, when Tribune acquired WGNO in New Orleans, Dowdle sent FitzSimons to run it, but he was soon back in Chicago, where he was made vice president of operations for Tribune Broadcasting, the number-two job in Tribune's television division. When Tribune bought Los Angeles station KTLA in 1985, FitzSimons coordinated the integration of the television station into the Tribune's existing television line-up. It was a game-changing acquisition for the company's broadcast division and one that reinforced its attractiveness to syndicators that could wrap up two big markets with one customer. Three years later, Dowdle selected FitzSimons to run WGN-TV, the Tribune's flagship station, a post that FitzSimons described as “the best job I ever had.”

Unlike Dowdle and Madigan, said Jim Kirk, a former
Chicago Tribune
reporter who covered him, FitzSimons didn't rub shoulders with the North Shore blue-blood types who formed Chicago's corporate aristocracy. His friends were more likely to come from the world of broadcasting or advertising. An avid sports fan, he befriended Jerry Reinsdorf, the Chicago real estate developer and sports impresario who owned the Chicago Bulls basketball team and the Chicago White Sox (the rivals of Tribune-owned Chicago Cubs). Soon after he took over at WGN, FitzSimons also capitalized on his contacts and skills as a negotiator to demonstrate that he was as capable of high-wire acts as any North Shore hot shot.

WGN had been locked in a long feud with the National Basketball Association over who would control the televised basketball schedule of the Chicago Bulls. NBA Commissioner David Stern insisted that the NBA should control the schedule because WGN had a national audience. But WGN wanted control so it could dominate the local sports television market by televising the Bulls games, as well as games played by the Chicago White Sox and the Tribune's Cubs. Once FitzSimons entered the talks, the court squabbles ended, and Stern agreed on a twenty-five-game schedule, a huge boost to WGN's ability to attract national advertisers who coveted product association with Michael Jordan, the team's superstar. The deal made Tribune Broadcasting a fortune.

By the early 1990s, Dowdle had successfully turned the company's TV franchise into a money machine. Brumback, meanwhile, had started pressing everyone to come up with ways to leverage the company's print and broadcast talent and create “synergy” or “convergence,” his inspired goal of getting the most out of every dime he spent on a journalist. Dowdle had convinced the company it needed more television stations. Together, Dowdle and FitzSimons led Tribune on a trail-blazing acquisition spree: In 1996 and 1997, it added ten stations to the six it already owned. Six of the new stations were added in one fell swoop when Tribune bought Renaissance Communications for $1.1 billion in cash, a staggering sum that many analysts thought excessive.

The combination of aggressive ad sales and cheap, rerun programming gave Tribune Broadcasting huge profit margins that overshadowed its poor cousins on the newspaper side of the company. But the broadcast business was in flux. Cable TV access broadened during the 1990s, and new, specialized stations emerged to bid for the same programs that syndicators had been offering to independent operators like Tribune. As cable and independent operators started bidding for the same programs, the prices they had to pay for TV shows jumped sharply upward. The result? Operating executives like FitzSimons had to squeeze costs out of stations to increase efficiency in order to afford new talk shows and sitcoms.

FitzSimons made a great right-hand man to Dowdle, the visionary leader and source of inspiration in the broadcasting ranks. While Dowdle dealt with investors and others trying to mine Tribune's broadcast strategy, FitzSimons, who'd become executive vice president of Tribune Broadcasting, effectively ran Tribune television stations and refused to be shoved around by the big boys. When TV syndication mogul Roger King of King World Productions feared that sensationalistic talk show hosts like Jerry Springer and the Tribune's Geraldo Rivera threatened his prized property, the
Oprah Winfrey Show
, he tried to drive Springer and Rivera off the air. FitzSimons not only resisted, but invited King to join in the national syndication of Rivera with WGN, setting the stage for a popular show and a new format. “Once the sniping was done,” Rivera told the
Los Angeles Times
, “the show took off.”

Thanks to a prime-time slate dominated by movies and sports, Tribune stations routinely posted enviably high profit margins. But Dowdle and FitzSimons knew the good times couldn't last. Cable stations that emerged in the mid-1990s could easily duplicate Tribune's successful formula. To stay on top, Tribune needed original programming. When Barry Meyer, then head of Warner Bros. TV operations, and Jamie Kellner, a recent refugee from Fox Broadcasting, approached Dowdle and FitzSimons to gauge Tribune's interest in a new network, they were all ears. Eventually, Dowdle convinced Tribune to acquire a
25 percent interest in what became known as the WB Network, an operation that he saw as the answer to the company's need for original televised content.

Investing in WB was a gutsy move that put Dowdle's and FitzSimons' careers on the line. The soaring profits that Tribune TV stations delivered had spotlighted both men as rising stars. But acquiring a share in WB in 1995 was a bet on an unknown entity with an uncertain future in a highly competitive industry. Dowdle and FitzSimons were convinced by Meyer and Kellner's pitch. WB would give Tribune stations less programming to sell ads against, but they figured they could probably squeeze more revenue from the shows because they would be first run. Instead of stale, old
I Love Lucy
reruns, subscribers could watch new programming like
Buffy the Vampire Slayer
on WB.

Brumback went along with the deal, but not with Dowdle. When the time came, he passed over Dowdle to anoint Madigan heir apparent. Although both men were stoic professionals, Dowdle was indisputably the visionary leader of the two, a man who thought more creatively than an investment banker adept at corporate politics and operating results. But Dowdle's misfortune elevated FitzSimons and gave him a shot at becoming the first broadcasting executive to run Tribune Company. When Dowdle decided to retire, FitzSimons stood at the helm of the company's most profitable division.

As the deputy managing editor for news at the
Chicago Tribune,
I didn't know FitzSimons, though, of course, I knew of him. Paralleling FitzSimons' rise through Tribune ranks was a phenomenon known as “market-driven journalism,” which would lead to news shows that were more like tabloids than serious, sober news. Media scholars trace the roots of market-driven journalism to the late 1960s when television station owners discovered they could meet FCC public service requirements and attract advertising audiences by creating local newscasts with popular appeal rather than traditional journalistic fare. Enlisting help from media consultants or “show doctors,” they fashioned newscasts that forced politicians to compete for headlines with the likes of
pop-tarts like Britney Spears. And it worked. Market-driven journalism was more successful than anyone could have imagined. Not only did the news shows attract viewers, they could also be used as public service content to meet FCC requirements and round out the fare on stations of all types.

Although many print journalists scorned the trend as pandering, the new news had its fans in print: “Somewhere in the late 1960s, what I call the stuff-pot factor took over,” noted John Walter, a managing editor of the
Atlanta Journal and Constitution
in the 1980s. “Stories lengthened. Attitudes toward stories changed. And we, the institution, became so convinced of our mission to save the world and comment soberly on it that we veered away from what we had. We'd been dulling newspapers up. Now we're returning to the ‘I didn't know that' factor, where news is anything that will capture your interest and make you turn to the next page because you don't know what wonder and revelation will be cast upon you.”

Unlike newspapers, which relied on circulation and advertising revenues, local television news relied more heavily on cash from advertising, giving television station managers a powerful incentive to promote sensational news reports that would attract viewers. Tribune stations racked up profit margins of 30 percent or more, drawing the attention of Wall Street and pressuring newspaper editors to embrace marketing strategies in an effort to stem the decline in circulation that had begun in the 1980s.

In one of the few studies ever done on the subject, John H. McManus, a California journalism professor and media critic, found evidence that local broadcasters usually subordinated journalism to “market logic” when the two forces conflicted: “Market selection logic is straight-forward.... To maximize returns to investors, the newsroom should pick those issues and events that have the greatest ratio of expected appeal for demographically desirable audiences to the cost of news gathering. Further, stories should advance, or at least minimize harm to, the interests of advertisers and investors.” Such values, of course, repulsed newspaper editors like me.

Madigan had put Fuller in charge of the publishing division, and Fuller in 1993 had named Howard Tyner, a former Tribune foreign correspondent, as editor of the
Chicago Tribune
. Tyner delegated the job of running the newsroom to his subordinates, people like F. Richard Ciccone, a seasoned managing editor and ace political reporter, Lipinski, and me. Tyner then focused on managing Fuller and creating the newsroom that Brumback wanted, one with a TV camera nearby.

As a person who spent his career as a print reporter, I didn't know many television journalists well. Although print reporters were a competitive lot who would sacrifice their firstborn to break a story, most dismissed local broadcast journalists as lightweights focused on anything that made good film, particularly crime and sensationalistic “watchdog” reports that newspaper editors would relegate to metro. As Tyner started pushing Brumback's “synergistic” journalism, I got to know more television reporters and editors, particularly through our Washington bureau.

Brumback had authorized millions of dollars to turn the
Chicago Tribune
Washington bureau into the Tribune Media Center that housed all Tribune Company papers as well as a television operation headed by Cissy Baker, a former CNN journalist whose father, Howard Baker, had been a senator and remained a big-wig in the Republican Party. A competent journalist with good political connections in a town where they counted, Baker proved easy to work with, but our instincts about what stories to chase were almost magnetically opposed. To help Baker in Washington, Tyner installed Jim Warren as the
Chicago Tribune
bureau chief. A rising star in Chicago, Warren was a first-rate journalist who happened to have fantastic television presence. But even Warren, a proponent of synergy, admitted that his discussions with Tribune station directors around the country made it clear they were not interested in the kind of substantial news stories that his print bosses demanded. The saying “If it bleeds, it leads” was, Warren told me, no exaggeration.

As editors in Washington and Chicago scrummed over how to work together, FitzSimons' ascension to Dowdle's former job created
rampant speculation about who would succeed Madigan as CEO—Broadcasting's FitzSimons or Publishing's Fuller. Madigan didn't tip his hand for a while. He enjoyed basking in the glow of the CEO title. Though he had been overshadowed by Brumback, Madigan had great timing and did a great job running Tribune if one judged him by the yardstick most CEOs looked at—the company's market capitalization, or the price of a share of Tribune stock multiplied by the number of shares outstanding. When he took over at Tribune, the company'sIs market capitalization was $4.3 billion. By the time he stepped down, it was a jaw-dropping $17 billion. But when Madigan, who knew that Wall Street needed a succession plan to maintain confidence in the company as a sound investment, promoted FitzSimons to executive vice president of Tribune Company in 2000, the die was cast.