"Grave dancer" Zell sets sights on newspaper industry

In 1992, Cincinnati's Jacor Communications was a struggling radio company. It was teetering on the brink of bankruptcy because it had tried to buy stations too quickly.

Enter Chicago real-estate magnate and nascent radio investor Samuel Zell, bearing a check for $70 million, which bought him controlling interest in the company. He stabilized it.

Six years later, after Zell gobbled up a number of other stations, he sold his radio company to Clear Channel Communications.

Price: $4.4 billion.

Now, Sam Zell has his sights set on the newspaper industry. Chicago's Tribune Co. has accepted Zell's offer, worth more than $13 billion, for the media empire, with its high-profile but struggling properties, such as the Los Angeles Times, the Chicago Tribune and a number of television stations.

According to Forbes magazine, Zell is America's 52nd-richest person, with a net worth of $4.5 billion.

That was before his estimated payday of at least $1.1 billion in February, when he sold his primary business — the nation's largest office-building firm, Equity Office Properties Trust — for $39 billion.

He founded Equity Office Properties in 1976 with a fraternity buddy from the University of Michigan.

Numerous newspaper profiles have called Zell a "bottom-feeder," and it's not always a compliment. His deals have not always worked out.

Equity Office Properties' stock was flat for many years, partly because investors didn't buy Zell's nationwide office-chain idea, believing real estate to be a regional business.

He took a substantial loss on a property he bought in Atlanta. A 1998 venture into the European office market didn't work out.

Zell prefers to call himself the "grave dancer." He is known for spotting undervalued properties that have been overlooked, building them up and selling them. It worked for him in radio.

But Zell has never owned or managed newspapers, and they can be a tough business, full of prickly journalists who equate better journalism with bigger corporate budgets.

Through a spokeswoman, Zell declined interviews for this story. Already, Zell is creating an impression among Tribune Co. journalists.

One Chicago Tribune reporter said he was glad his company picked the Chicago billionaire over the Los Angeles billionaires Eli Broad and Ronald Burkle because they seemed more likely to keep only the Los Angeles Times and sell off the other papers.

Zell is known as a witty 65-year-old with a love of motorcycles.

Helping to hone his rebel image is his penchant for zooming around Chicago — and the world — with a group of bikers he calls "Zell's Angels."

He stands out in the world of real-estate deals by wearing blue jeans to high-profile meetings; in fact, jeans have long been the dress code at Equity Office Properties' Chicago headquarters.

"If you're really good at what you do and you dress funny, you're eccentric," Zell told the Cincinnati Enquirer in a 1999 interview.

"If you're not so good at what you do and you dress funny, you're a schmuck. So our motivation here has always been to be extraordinarily good at what you do, so therefore we can wear whatever we want."

In a 1996 interview with the Cincinnati Post, Zell said he and his buddies like to ride sport bikes on "twisty-turny roads all over the world."

Among his favorite motorcycles is the Ducati ST2, an Italian model that goes from 0 to 60 mph in about four seconds.

And Zell is a man who likes speed, including when it comes to emerging business trends.

For instance, by 1999, when broadband market penetration was barely measurable, all of Zell's office buildings had been wired for high-speed Internet. Likewise, Zell made his radio money by anticipating the wave of consolidation in the 1990s.

Four years after he acquired Jacor, Congress passed the Telecommunications Act, which eliminated the limit on how many radio stations one company can own. It was a seller's market, and Zell cashed in.

He took Equity Office Properties public in 1997 with a vision of buying skyscrapers from coast to coast. After its public offering, Equity Office acquired three real-estate companies in five years, tripling its footprint to more than 100 million square feet.

But the stock fell as Wall Street worried that Zell's company was overpaying for properties. Its share price languished until Zell orchestrated a bidding war for his company last year.

After accepting a buyout offer from Blackstone Group in November, it kept the door open for Vornado Realty Trust, which bid up the price.

Ultimately, Blackstone won out but had to pay $3 billion more than it originally proposed.