FCC backs Zell’s Tribune heist

Good news for real estate mogul Sam Zell: His bid to buy struggling newspaper chain Tribune (TRB) got a shot in the arm Wednesday on word that FCC chief Kevin Martin wants to waive media ownership rules that might otherwise impede the takeover plan. The announcement puts Zell a step closer to taking control of the publisher of two of the biggest papers in the nation, the Los Angeles Times and Chicago Tribune.

For Zell, the beauty of the deal — struck at the height of this past spring’s leveraged buyout frenzy — can’t be overstated. He’ll put down just $315 million to take over an outfit whose market capitalization was $3.55 billion at Wednesday’s close, after the stock posted a 10% rally on the news. Most of the risk of the heavily leveraged deal is being borne by Tribune’s employees, who will be contributing to an employee stock ownership plan that will end up saddled initially with billions of dollars in debt — while giving billionaire Zell some much-needed tax breaks.

So if Zell’s Tribune turnaround works out, then everyone shares (if not equally) in the winnings. And if not? Then more workers face the firing line, while Zell has to write off a modest (by his standards) investment.  He wouldn’t be happy about losing those tax breaks, though.