Sam Zell, a prominent University alum whose philanthropic efforts can be felt throughout campus, stepped down today as CEO of the bankrupt and much-troubled Tribune Company.
Zell will keep his seat as chairman of the company.
The company’s board of directors named Randy Michaels, the company’s current chief operating officer, as the next CEO. Michaels was also elected to the board.
In an internal e-mail written by Zell and obtained by The Michigan Daily, Zell wrote that the board of directors made the change in leadership upon his recommendation.
Zell also wrote in the e-mail that by remaining as chairman, he will continue to provide “strategic oversight and vision to the company’s management team.”
“During the last two years,” Zell wrote, “we’ve achieved a seismic shift in Tribune’s focus and culture — we’re moving in the right direction and into the New Year with energy and optimism.”
In 2007, Zell positioned himself to become chairman of the Tribune Company when he led a movement to take the company private in a deal worth $8.2 billion. The deal to make the company private left the Tribune with more than $13 million worth of debt on its books, according to Reuters. That debt, paired with an industry-wide decline in advertising revenue, drove the company into Chapter 11 bankruptcy, which it has been in for about a year, according to the Tribune.
The change in leadership came just one day after the company’s exclusive right to file a reorganization plan in its Chapter 11 case was extended by a U.S. Bankruptcy Court judge in Delaware until Feb. 28.
Zell and his late business partner Robert Lurie began their real estate investment careers and partnership during their time at the University.
“They began buying in apartment buildings and they started it and they became student landlords,” said Jerry May, the University’s vice president for development.
Zell and Lurie continued to invest in properties across the Midwest, eventually moving to Chicago where they founded Equity Group Investments.
May said Zell — a graduate of the College of Literature, Science and the Arts, the Law School and the Business School — has continued to maintain close ties to the University throughout his rise on the corporate ladder.
Zell founded, through a $10 million gift, the Samuel Zell and Robert H. Lurie Institute for Entrepreneurial Studies at the University’s business school. He also established the Sam Zell Dean’s Tactical Fund at the Law School.
May said Zell has been more actively involved with the University than the typical donor, serving on the president’s advisory board and coming back to the University to speak to students year after year.
In addition, Zell and his wife Helen were honorary co-chairs of the Michigan Difference Campaign, which raised $3.2 billion for the University — the most of any campaign by a public university to date.
“For some organizations (being an honorary co-chair) can be kind of a passive role, if anything (the Zells) are not passive — they are great supporters and leaders at the University,” May said. “It’s a really deep commitment that they have to the University.”
May, who described Zell as “a really cool guy,” said he isn’t shy about offering advice to University administrators.
“Anybody that’s interacted with Sam knows that Sam is one of the most straightforward leaders that you will ever find,” May said. “He’s a very exciting executive to watch.”
May said he couldn’t comment on how Zell’s decision to step down as CEO of the Tribune Company will affect his relationship with the University.
“I don’t deal with Sam in that particular realm,” he said. “He and Helen have been among the most tremendous leaders at Michigan and I know that will continue.”