Bouncing off of Cramer’s lucid post regarding the Tribune deal (when Cramer is good, he is goooood), I wonder if it wouldn’t be better for all involved if the deal didn’t fail. As I pointed out before, Zell doesn’t have a lot of skin in the game, and the workers get all of the downside and little of the upside. Zell has a lot of upside, relative to his contribution, which means little downside.
Don’t get me wrong, the newspaper business is tough. My view is that the ESOP should refuse to fund the deal, and let the equity price fall. Someone will fund the deal at a lower price, and the remaining workers will get paid, if less than before.
One great lesson of all of this is that no matter what labor demands, it is impossible for labor to do well if the industry does not do well.