Following two weeks of chaos at The Tribune Company, Randy Michaels will step down as CEO by the end of this week, the Chicago Tribune reports. Just a day ago Michaels insisted he would be staying on, after a NYT story co-authored by David Carr said the CEO’s exit was imminent after the board had lost confidence in him. Since it was Carr’s lurid tale about a frat-house, shock jock culture at the Tribune that contributed to the resignation of Lee Abrams as chief innovation officer earlier this week, it looked like Michaels didn’t want to give Carr the satisfaction of being right. A Tribune rep had no comment on the expectation of Michaels’ resignation.
According to this morning’s Chicago Tribune, which is the company’s flagship paper, Michaels will be replaced by a four-member office of the president. Those four members include Eddy Hartenstein, president and publisher of the Los Angeles Times; Tony Hunter, president and publisher of the Chicago Tribune Media Group; Nils Larsen, Tribune Co.’s chief investment officer; and Don Liebentritt, chief restructuring officer.
The stories of Tribune’s debauched executive culture and the unceremonious exiting of two top corporate officers comes at just the moment when the company’s nearly two-year bankruptcy ordeal could be wrapping up. It’s probably not a coincidence, considering how quickly things soured after Sam Zell took the company over in a complicated $8.2 billion acquisition in Dec. 2007 that employed a massive amount of debt and the company’s tax-exempt employee stock ownership plan (ESOP), putting staffers’ retirements at risk.
While the board feels the controversy that has embroiled Michaels and his team is a distraction while the company tries to emerge from bankruptcy, it also probably wants to seize the opportunity to start over. There was a great deal of hope last week, when Tribune finally reached a settlement with its major creditors. Under the agreement, Tribune bondholders will receive $420 million once the company emerges from bankruptcy. Though there was still one holdout threatening to collapse yet another agreement between the company and its lenders, the news was taken as a sign that all sides were ready to move on.
Moving on is what Abrams did this week, after he issued a company-wide e-mail featuring a link to an Onion News Network video (the fake newscast in question is here, and is not-safe-for-work) with nudity and profanity that he labeled “Sluts.” Abrams issued an apology, but told Forbes’ Jeff Bercovici that he was not pushed out and decided to leave on his own, saying, “There was just too much noise, too much of a distraction with all the other things going on. [Tribune CEO] Randy [Michaels] agreed with me and that was that.”
Michaels joined Tribune in ’07 as EVP/CEO of Tribune