As company and creditors informally talk, announcement on Disney CEO taking over L.A. Times and Chicago Tribune owners is expected after holiday
Michael Eisner is ready to cross the finish line.
An announcement on the former Disney CEO becoming the chairman of the Tribune Co., is imminent, a person familiar with the talks has told TheWrap.
“Right now, it’s going to be Eisner,” the person said. "The lenders are going to try to take the company. It's the only way they are going to get some of their money. But they're not ready yet."
Eisner's guardian angel in negotiations is his close friend John Angelo, one of the creditors who are poised to take control of the company from the current board of directors and management.
The announcement could come as early as next week, after the Labor Day holiday, the person said.
“Eisner is in the Old Media-to-New Media transformation business, that's why the creditors are talking to him,” the individual said. “They need a good old American guy, a face, a guy who can deal with bankers and convince them that he can get the company out of trouble. A lot of people involved think Eisner is that guy.”
Another person familiar with activity in the Eisner camp also confirmed that the former Disney CEO is the main focus of the search for a new Tribune boss.
"He's the guy," the person told TheWrap.
Neither Tribune HQ nor the Los Angeles Times, which broke the Eisner story last week, had comment. The same was true of JPMorgan Chase and John Angelo's investment firm, Angelo, Gordon & Co. — two of the major creditors in the case. Both Angelo and JPMorgan walked out of reorganization talks with the media giant on Aug. 20, when the lenders rejected participation in the company’s proposed reorganization.
The company’s exclusive window for finding its own solution to the almost 21-month problem expired on Aug. 9, leaving the door open to its creditors to force a solution. But the Tribune board is still attempting to take charge of a solution.
It was supposed to have filed a new reorganization plan last week; instead, Tribune CEO Randy Michaels sent an email to the company’s employees saying that those talks were continuing. “Given the ongoing nature of those discussions, we have decided not to file any amendments to our plan at the present time,” he said.
If a reorganization plan is filed by Tribune, it is scheduled to be reviewed in court on Sept. 15.
Meanwhile, early Tuesday, Tribune filed a motion in Delaware seeking to retain legal counsel for a committee to oversee any reorganization schemes and to handle any lawsuits or claims that arise from the 2007 leveraged buyout that took the once-public company private.
The filing is partially a response to the critical Bankruptcy Examiner’s report of earlier this summer which, among other conclusions, predicted that a court could find the buyout legally vulnerable and result in several lawsuits against several of the involved parties. As a result, the new four-person committee comprises post-2007 Tribune board members.
While Tribune Chairman Sam Zell, who gained control of the company in 2007 and orchestrated the buyout, isn’t on it, one of his closest business associates — Frank Wood, CEO of Secret Communications and former CEO of Jacor Communications — is. Wood is joined by fellow board members Jeffrey Berg, chair of International Creative Management; Maggie Wilderotter, chief executive of Frontier Communications Corp.; and former Six Flags head honcho Mark Shapiro.
Creditors have until Sept 8 to file any objections, with a hearing on this latest legal maneuver scheduled for Sept. 15 in Wilmington. Tribune Co. spokespersons had no comment on the filing. (Update, 11:25 a.m.: On Wednesday, Tribune Co. announced that federal judge Kevin Gross had been appointed as a mediator to help facilitate Chapter 11 negotiations).
As for Eisner, who started the media investment company Tornante in 2005 and has been venturing into online media in recent years, he isn't saying much himself — at least not directly. But he certainly has dropped some hints.
Last week, the 68-year old former Disney CEO, who ran the company from 1984 to leaving under a cloud of shareholder discontent in 2005, gave an interview to Variety last week in which he seemingly purposefully commented upon the state of Tribune.
“You are talking to somebody who is buying debt in the Tribune Co.,” Eisner said, putting his money where the creditors’ mouths are. “The salvation of the newspaper is some kind of pay arrangement (online), which will evolve into something significant.”
Other than that, it's been the expected code of silence.
“He's not speaking about it, and we're not commenting,” Eva Ross, one of Eisner’s publicists told TheWrap. “When he did an interview with Variety, it was about his book tour and not whether he'd be working with the Tribune.”
The book, in fact, might hold one of the biggest clues in this whole mystery.
Scheduled to come out on Sept. 14, “Working Together: Why Great Partnerships Succeed,” which is being published by the HarperBusiness imprint, claims to offer “unconventional wisdom and unexpected insights” into true power couples and “what makes them tick.”
Included in the 10 partnerships that the book examines is Eisner’s own relationship with Frank Wells, who brought him into Disney as CEO. Wells, who was Disney’s President and COO, died in a helicopter crash in 1994. “Working Together” also looks at Bill and Melinda Gates, Imagine Entertainment’s Brian Grazer and Ron Howard … and John Angelo and Michael Gordon of Tribune creditors Angelo, Gordon & Co.'
Angelo, CEO of the Park Avenue investment firm, is a close friend of the former Disney boss. As has been noted in several reports, he's the one responsible for Eisner jumping to the top of Tribune's wishlist.