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The bankrupt Tribune Company is dropping the fiction that since Sam Zell took over it's been owned by the employees being laid off by the carload. The Wednesday Tribune carries a short, poignant story that says bluntly the "ill-fated employee stock ownership plan is dead."
Here is the same article as it appeared in the Los Angeles Times, a Tribune Company paper where the Tower is despised. This version of the story drips with contempt.
Both versions concede that "it became clear months ago that the banks and other investors that financed Chicago billionaire Sam Zell's 2007 leveraged buyout of the company likely would take over ownership from Tribune Co.'s employees when the reorganization plan was filed....Eliminating the plan signals that Tribune Co. management and the company's creditors figured that the complexity of keeping the ESOP in place was more costly than paying taxes."
For the ESOP, employees get a new 401(k) retirement plan.
The Tribune Company continues to bill itself as "America’s largest employee-owned media company." But if the ESOP was good for anything beyond this empty boast it was the tax advantages it offered Zell that made him think his 2007 deal would actually work. No Tribune employees I've ever talked with thought of themselves as owners, or, despite the way Zell liked to begin his memos, his "Partners."
Scroll down here and you'll find "Pelham," who frequently posts comments on this blog, reminiscing about the ESOP's first days: "I actually made a special trip downtown one day to see the now infamous early-Zell-era banner in the Trib lobby that proclaimed "You OWN this place."
And while you're at the above link, read former Tribster Gary Dretzka as he fingers the contradictions that made the ESOP a farce: "How, for instance, can any 'owner' be fired without cause or due process? How is it that fired 'owners' lost all rights to future profits — such as they might be — upon termination...? Aren't the employees who remain actually in a more precarious financial position than those who left and already are receiving pension checks and have complete control of their retirement portfolios?"
Here, compliments of Romenesko, is the memo notifying employees that the ESOP plan is headed for the dustbin, though that news is artfully buried. No mention of the recipients as anybody's partners.