All’s well that ends Zell

Los Angeles Times owner Sam Zell didn’t file for bankruptcy because the newspaper business is being battered by the recession or by online competition. He went into Chapter 11 because of the irresponsible and boneheaded deal he made to take over Tribune Co. in the first place.

Zell’s own financial chickens are coming home to roost. Unfortunately, the people who are paying the price for his recklessness are the citizens of Los Angeles and the staff of their premier paper.

Sam Zell only put up $315 million of his own money to buy the Times’ owner, Tribune Co. The rest — $8.2 billion — was highly leveraged debt; the deal, which nearly tripled Tribune’s debt load, turned on a fancy maneuver creating an Employee Stock Ownership Plan executed behind the backs of Tribune’s actual employees. The sorry result: a debt service of $1 billion a year.

Even if advertising were not dropping, even if subscriptions were not falling, Zell would have had no chance to cover his monthly nut without the waves of cutbacks he ordered, which have devastated Times morale and decimated its content. And even with those cutbacks, the bankruptcy is now proof of how misbegotten his strategy was in the first place.

The economic meltdown the nation is now living through offers plenty of evidence of how the American people are at the mercy of casino gamblers posing as capitalism’s finest. The billionaires who got us into this mess turn out to be not heroic entrepreneurs contributing to the country’s prosperity, but unaccountable buccaneers who could care less about jobs and communities. Sam Zell’s megalomania isn’t unique; it’s just our misfortune that Los Angeles’ civic life has to bear the consequences of his financial swagger.

So what’s next? The prospect of Zell’s dumping Tribune assets at fire-sale prices has renewed speculation about the Los Angeles Times being returned to local ownership.

As a strictly business proposition, it’s hard to imagine a price low enough to make sense to a buyer, but maybe the bankruptcy will force Zell’s hand. It’s also hard to imagine a new owner taking over the Times, at any price, with illusions about acquiring a financial gusher. The paper has been profitable, but buying any newspaper at this moment in the history of journalism would be more of a statement about what a great city needs than a bet on making an easy buck.

Maybe David Geffen or Eli Broad or Dick Riordan still thinks that the Los Angeles Times brand is too good not to own at the right price (all three made overtures to buy the paper before Zell sealed his deal). But chances are, there is no business plan for the future of the Times that makes sense unless serving the public interest is considered to be as much a reward as a revenue stream. That’s why it’s tempting to think of what an unconventional ownership model would look like — reorganizing the Times as a nonprofit entity, for example, either free-standing, or perhaps as part of another nonprofit, like a university or foundation.

It’s also worth imagining Los Angeles without a newspaper of the Times’ journalistic resources. Maybe the notion of delivering a product made of dead trees to people’s driveways early each morning is obsolete in an era when news is made and reported around the clock, and when digital delivery is cheap and immediate. Maybe the available sources of news are so abundant that the idea of a single authoritative source is hopelessly archaic. Maybe the fractionated megalopolis that Los Angeles has become makes it absurd to think that one paper can meet the needs of so many geographically far-flung and ethnically diverse subcommunities.

But if the Times doesn’t make the effort to look for a common culture and to create a shared public space to fight about what a common culture is, what will? Blogs and Web sites are swell, but they’re silos, not connective tissue. Local television news believes that thoughtful coverage of local politics and public affairs is ratings poison. Community and special-interest and alternative papers perform a crucial service, but size matters; a million people sharing the same information every day makes a deeper impact than 10 readerships of a 100,000 once a week, no matter how ecumenical the content. Budgets matter, too: investigative journalism takes time and dough that smaller outlets, and local public television, don’t have. The Times may be an imperfect mirror of what Los Angeles is, but without it, it’s hard to know where the region goes to see itself whole, or even why people will think that’s an effort worth making.

Sam Zell didn’t cause the crisis in modern journalism, but he did turn a superb and profitable institution into a basket case. The people who work there, and the people who read it, deserve way better. Even the people who don’t read the Times deserve a city that never stops searching for its soul. Sam Zell doesn’t get that a great newspaper can give its community a public space to do that. Maybe it’s time for him to sell it to someone who does.

Marty Kaplan is the Norman Lear professor of entertainment, media and society at the USC Annenberg School. His column appears here weekly. He can be reached at

Same old United Nations, Sarkozy [hearts] Israel, Gilad Shalit turns 21 in captivity

Groups Assail U.N. Conference

A U.N. conference under way in Geneva is as bad as expected, watchdog groups say. In reports from Switzerland, two major U.N. watchdog groups said the conference – the first in a series of preparatory meetings for the follow-up to 2001’s notorious anti-Semitic Durban conference against racism – was following the path of its predecessor.

Anne Bayefsky, editor of the Eye on the U.N. Web site, called the meeting’s opening session “a slap in the face to every state and nongovernmental organization that really cares about equality and nondiscrimination.”

Egypt, speaking Monday on behalf of the African group, singled out Israel for its “continued occupation of Palestine and violations arising there from.” Pakistan, speaking for the Organization of the Islamic Conference, urged the conference to “move the spotlight on the continued plight of Palestinian people” and accused critics of waging a “smear campaign” against the gathering.

The conference is intended to combat racism and discrimination. Even before the conference began, critics warned that the process could lead to a repeat of the 2001 Durban conference, where an event ostensibly aimed at fighting discrimination became a platform for the dissemination of anti-Semitic propaganda and the singling out of Israel.

Sarkozy Reaffirms Pro-Israel Stance

French President Nicolas Sarkozy reaffirmed his affection for Israel and hostility toward Hamas.

“I have the reputation of being a friend of Israel, and it’s true. I will never compromise on Israel’s security,” he said Monday in his first foreign policy speech since taking office in May.

While he said France would continue to cultivate rich ties with the moderate Arab world, Sarkozy drew a line at engaging Hamas or allowing Iran to procure nuclear weaponry. He described the Gaza Strip as “Hamastan” – a term seldom heard outside Israeli political circles – and said the Islamist Palestinian group must be curbed, lest it take over the West Bank as well.

Sarkozy, who was speaking to French diplomats, further urged Iran to abandon its nuclear program or for effective international sanctions to be imposed on Tehran. Otherwise, he hinted, there could be military intervention.

“This tactic is the only one that allows us to escape from a catastrophic alternative: an Iranian bomb or the bombing of Iran,” he said.

Captive Israeli Soldier Turns 21

Israelis marked the 21st birthday of captive soldier Gilad Shalit. Supporters of Shalit held a rally in Tel Aviv on Tuesday, the conscript sergeant’s second birthday in Palestinian captivity. Newspapers and other media carried fresh coverage of his family’s ordeal.

Shalit was abducted in a June 25, 2006, cross-border raid by Hamas-led gunmen in the Gaza Strip. Two of his comrades were killed in the incident.

His father, Noam, said Prime Minister Ehud Olmert was not doing enough to recover his son from Hamas, which wants a prisoner exchange. Olmert has signaled a willingness to bargain for Shalit’s return but has ruled out the lopsided swap demands by Hamas.

Hamas leader Khaled Meshaal said Monday that a deal was almost clinched to trade Shalit for 350 Palestinian prisoners held in Israeli jails, but that it fell through over the types of prisoners the Olmert government would release. Israel has said it will only release prisoners not involved in killings.

YouTube Under Fire in Germany Over Hate Videos

The Central Council of Jews in Germany has joined the call to punish YouTube for failing to remove hate material from its Web site. YouTube, the online video sharing portal, has been accused of spreading neo-Nazi material.

According to a report in the ARD television magazine, anti-Jewish propaganda from the Third Reich and music by the banned neo-Nazi group, Landser, can be viewed unhindered on YouTube. Such material is illegal in Germany. The report said some of the material had been online for several months.

The federal Ministry of the Interior has recommended filing charges. German officials reportedly have warned YouTube more than 100 times to remove the material but without a response. The vice president of the German Jewish Council, Salomon Korn, has asked that Chancellor Angela Merkel and the Justice Ministry intervene to stop the online publication of offending video clips.

YouTube, which is owned by Google, is based in California and thus beyond Germany’s legal reach. But German officials could come down harder on Web companies with operations in Germany.

Israeli Holocaust Assets Listed Online

Israeli assets believed to have been left behind by Holocaust victims can now be claimed by their heirs over the Internet. The Company for Location and Restitution of Holocaust Victims Assets, which was set up in 2006 following disclosures that Israeli banks hold many accounts and properties that have gone unclaimed since World War II, has set up a Web site with the names of some 7,000 original owners believed to have perished at the hands of the Nazis.

Heirs of those who appear on the list can apply for restitution at The site is in Hebrew with English translation. The site does not deal with living persons or properties and accounts outside of Israel.

Briefs courtesy Jewish Telegrapic Agency.

Good News and a Big Squeeze

President George W. Bush last week plugged a gaping hole in the U.S. war against terrorism by expanding the executive order freezing the assets of terror groups to include Hamas, Hezbollah, the Popular Front for the Liberation of Palestine and Islamic Jihad.

Jewish leaders hailed the decision, which they said corrected an omission that left the administration open to charges of hypocrisy as U.S. troops hunt down terror mastermind Osama bin Laden.

But some warned that the move was part of a broader diplomatic offensive that also includes fierce new pressure on both Israel and the Palestinians.

That pressure was apparent this week as Israeli forces withdrew from Palestinian towns, despite ongoing violence.

The diplomatic effort may also include a long-delayed official statement of U.S. goals for the region — goals that will include Palestinian statehood. Palestinian officials expect that statement to come at the opening of the United Nations General Assembly in New York next week, either by Bush or by Secretary of State Colin Powell.

The new terror group designations are “an important development, and it’s consistent with what they said from the beginning — that you cannot attack terrorism piecemeal,” said Malcolm Hoenlein, executive vice chair of the Conference of Presidents of Major American Jewish Organizations. The new executive order, which adds 22 organizations to the original presidential order, requires foreign financial institutions and governments to freeze the assets of designated terror groups or face sanctions.

The expanded list now includes the four Mideast terror groups, as well as Irish, Colombian and Basque terror organizations. Kahane Chai, an Israeli extremist group, was also cited. “Although the current focus of the campaign is the elimination of the Al Qaeda terrorist network, we will not rest until every terrorist group has been removed as a threat to the United States, our citizens, our interests, and our friends and allies,” said Richard Boucher, the State Department spokesman, who also promised a long and what he termed “methodical” campaign against terrorism.

Jewish leaders who have met with administration officials in recent days say the move reflects longstanding administration policy, not an abrupt change in direction.

“It’s not a huge step, but it’s an important one,” said Abraham Foxman, national director of the Anti-Defamation League (ADL). “They always said they would start focusing on these groups; the question was only when.”

Input from Jewish leaders, he said, was also a factor in the decision. Washington officials “knew they looked a little silly, saying one thing about terrorism and doing another,” he said.

Foxman warned that adding the Mideast groups to the terror sanctions list — they are already on the official State Department terrorism list — will not cripple the anti-Israel groups overnight. “It will be down the road — and it will depend on the work we do with our moderate Arab allies,” he said. “They have to buy into the effort.”

One country quickly punched the no-sale button: Lebanese officials announced Tuesday that its Cabinet would spurn the terrorist designation for Hezbollah, which operates from Lebanese sanctuaries.

Some welcomed the decision, say it is part of a multitrack diplomatic offensive aimed at both advancing the anti-terror fight and reinforcing the shaky U.S.-led coalition by forcing the Israeli-Palestinian conflict into the background.

“When the first list [of groups whose assets were frozen] was announced, it was conspicuous because of who was missing,” said Robert O. Freedman, a Middle East scholar and peace process supporter. “This decision makes up for it; you can’t legitimate some terrorists and fight others.”

But while the decision made sense, he said, Israel’s leaders would be wise not to celebrate too enthusiastically. “The other shoe is going to drop,” he said.

The likeliest way that will happen is the long-rumored administration policy statement on the Middle East, which was postponed after the Sept. 11 terror attacks.

But the motivation behind that statement — to calm resentments in the Arab and Muslim world about a perceived U.S. tilt toward Israel and to demonstrate continued U.S. engagement in the region — is even stronger now, as Washington struggles to incorporate many of these states into its anti-terror coalition.

The new sanctions against Mideast terror groups are part of that overall effort to keep the Arab-Israeli conflict from disrupting the anti-bin Laden campaign.

“There is reason to feel satisfied about their inclusion on the list,” said David Makovsky, a senior fellow at the Washington Institute for Near East Policy. “It’s setting down an important marker about what the president said at the beginning: that this is about something broader than just Al Qaeda.”

At the same time, he said, the move was part of an effort to control the raging Mideast fires enough to prevent the new anti-terror coalition from getting singed.

“The broader picture here is that what the U.S. basically wants is for both Israel and the Palestinians to get off their radar screens as they focus on the war in Afghanistan,” Makovsky said.

Jewish and Israeli anger over the omission of the Mideast groups from the earlier sanctions list, he said, was becoming disruptive, he said.

Adding those groups now is consistent with the administration’s early promises — and “it’s also a way of calming Israel’s concern that it is being regarded as a sacrificial lamb in the coalition,” Makovsky said.

At the same time, images of Israeli tanks in Palestinian towns were disrupting the coalition effort, generating strong new pressure on Israeli Prime Minister Ariel Sharon to pull out, he said — which is what Sharon is now doing, despite unabated violence. The result: carrots for Israel in the form of the new terror designation, and sticks in the form of new, intense pressure from Washington.

Arafat is getting the same treatment.

The administration continues to dangle the possibility of a formal statement endorsing Palestinian statehood, and possibly even a meeting between Arafat and Bush at the U.N. next week. At the same time, Arafat is being subjected to intense pressure — public and private — to act decisively to end the violence.

“There are layers to this,” said Robert Lieber, a foreign policy scholar at Georgetown University. “On one hand, the Israeli-Palestinian conflict is not directly related to the terror attacks on America, or what drives bin Laden. Having said that, it makes U.S. diplomatic strategy somewhat easier if the violence in the region is ratcheted down. So there is some value for the administration to be seen twisting arms to reduce the violence. It’s the appearance that counts.”

But in the end, he said, those in the White House view the region with “a realistic understanding of the obstacles to serious progress in the peace process and an understanding of Arafat’s responsibility as being the key to make this happen. They are not naive.”