Careful what Zell tells you

Now, don't get me wrong: I'm not predicting the future. But sometimes it can be instructive to look for potential patterns by peering into the past. And stumbling around for items about Sam Zell - the Chicago real estate mogul who might cut a deal to purchase Tribune Co. a week from now - I came across an interesting tidbit. It goes back to August 5, 1991, in the L.A. Business Journal, and it quotes Zell just after he agreed to take over Carter Hawley Hale Stores, the L.A.-based retailer that was in Chapter 11 bankruptcy protection.

Here's what Zell said: "We have no interest in liquidating or picking apart the company." He said that Carter Hawley Hale had a "very valuable and significant franchise." Four years later, almost to the month, he sold the re-named company, Broadway Stores, to Federated Department Stores, which proceded to dismantle the stores, piece by piece.

Two weeks ago, in an interview with Bloomberg News, here's what Sam Zell had to say about his plans for Tribune: "My inclination would be to not break it up.'' He added that "there's a lot of opportunity there.''

The NYT just posted a story for tomorrow's edition that's headlined "Buyer of Distressed Properties Sees Opportunity in Newspapers." It opens with a cute anecdote about Zell's first foray into publishing: while in high school, he would visit newsstands under the El tracks in Chicago and buy up copies of Playboy for 50 cents a throw. He then went back to the suburbs and resold them to his pals for three or four times what he paid. "I see markets," he once said in an interview. "I’ve always been intrigued by inefficient markets." One thing Zell has made clear: he's not going after Tribune because he especially fancies newspapers. He's in this thing to make money, pure and simple - and if he does get the company (still an open question at this point) don't be surprised if he makes an early exit.