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Sam Zell, like any good newspaperman, has a deft way with words, although occasionally his bon mots can veer toward the infelicitous.

Consider a few outtakes from the recent Sam Zell road show, a cross-country tour in which he has shared his unorthodox vision with thousands of employees of Tribune Co., the media conglomerate he acquired in an audacious, and some would say irrational, $8.2-billion (U.S.) deal late last year.

In January, during a gathering at the Orlando Sentinel, Mr. Zell muttered a brief “Fuck you” into the microphone after a staff photographer apparently turned her back to him as he was answering her question.

At the same meeting, the real estate mogul cum media tycoon excoriated an unnamed Tribune executive (one of the top six, he confided) as a “motherfucker” who made $750,000, but needed to be told what to do.

And then, of course, there was his meeting with a group of Los Angeles Times employees at the paper's Olympic printing facility in early February. Mr. Zell seized the lectern, dispensed with any pleasantries, and began his introduction by comparing the newspaper's troubles to a case of erectile dysfunction.

“I was trying to think about how I could describe to you what my job is, and I think in the most simplistic terms the challenge is how do we get somebody 126 years old to get it up?”

After the laughter subsided, Mr. Zell delivered his punch-line of a prescription: “Well, I'm your Viagra, okay?”

It is difficult to conceive of a more unlikely saviour for the L.A. Times – or American newspapers, in general – than this brazen, foul-mouthed, and often outrageous, billionaire. Unlike some owners who have been attracted to newspapers as an ideological pulpit, Mr. Zell appears to be in it for one reason and one reason alone: profit.

Only last year, Mr. Zell completed one of the largest leveraged buyouts in history, selling his Equity Office Properties real estate trust for $39-billion, including debt, to a private equity group. He is a living legend in the U.S. property market and, well, a nobody in the world of publishing – unless you count his side act as a 12-year-old in Chicago, reselling Playboy magazines at inflated prices to his buddies.

True, he has amassed the bulk of his $6-billion fortune by chafing against the grain of received wisdom; he once described himself as the Grave Dancer, and revelled in how he found success by “dancing on the skeletons of other people's mistakes.”

But wading into the benighted world of media already appears to be the biggest contrarian bet of his career – or, in some people's opinions, the craziest.

He now presides over a company that controls the Chicago Cubs baseball team, an assortment of broadcast interests, including 23 television stations, and about a dozen print titles, from the L.A. Times and Chicago Tribune to the Baltimore Sun and Newsday.

Although television has not been unscathed by the current economic slump, it is the newspaper business that will provide the Grave Dancer with his skeletons – a charnel house's worth.

The U.S. industry is in a precarious position, with circulation numbers and advertising dollars entwined in a downward spiral that has accelerated faster than even Mr. Zell had anticipated. Average daily circulation dropped by more than one million to 53.3 million readers in 2007 – the 24th consecutive year of decline – while advertising revenue fell 9.4 per cent, according to the Newspaper Association of America. Classified ads, which traditionally accounted for up to half of some newspapers' revenues, have been particularly hard hit, thanks to the proliferation of Internet news sources and other non-conventional media that have robbed the industry of its erstwhile dominance.

Shrinking profits

The result has been shrinking profit margins, battered stock prices (for the few newspaper groups that remain publicly traded), and thousands of job losses.

Mr. Zell, shrewd though he may be, must contend not only with the grisly spectre of this secular decline, but also with a corporate culture that by his own admission is laced with “bullshit.”

And he must do it without the crutch of experience.

Oddly enough, this is where some long-time industry observers believe he may have an edge: The very fact that he is a visible outsider with no experience in the business may free him from the shackles of stale thinking.

Newspapers have a reputation for belonging to an insular and exclusive club, one where processes have become calcified, monopolistic lassitude has become entrenched, and where change is viewed with suspicion, if not outright resistance – hardly the qualities suited to deal with a disruptive technology like the Internet.

Uprooting one mindset and forcibly enshrining another is no guarantee of success, and there are fears it could undermine the journalism upon which broadsheets like the L.A. Times and the Tribune have built their brands.

Nor can such moves provide a quick solution to Tribune's punitive debt load, which looks as though it will force Mr. Zell to begin selling some titles to stave off default, something he said he did not want to do when he took over.

But given the industry's dim prognosis, and the continuing cuts, it's possible that without some kind of intervention – even one as seemingly bizarre as Mr. Zell's – there may not be much left to undermine.

“The industry has become afraid of its own shadow in terms of the way it operates,” said Lauren Rich Fine, a former Wall Street media analyst who now teaches at Kent State University. “Someone from the outside coming in can bulldoze through some of the cultural issues. I think in an industry where it's really hard to get people to change, it's not a bad idea to just shock them into it, and say you're either with us or against us. There's just no other way to do it.”

Not the establishment type

Mr. Zell bears little resemblance to the image of the polished and genteel newspaper executive. He is 5 foot 5, with deep-set, hooded eyes, a bald pate, and a closely cropped strip of beard that traces a grey arc from ear to ear, all of which conspire to create a kind of elfin effect. He shuns suits in favour of striped, open-necked shirts and blue jeans, and when he speaks, it is in a nasal rasp, albeit one with a knack for bending vulgarities into just about any part of speech.

“You know, maybe I have to go to language classes to de-fuck my language,” he told staffers at the L.A. Times. “But I'm 66 years old and it's too late for me to change.”

(A spokeswoman for Mr. Zell said he was declining all interviews at the moment, and a Tribune spokesman declined to make any of the company's executives available for this piece.)

Mr. Zell has never been an establishment man, and nor has he ever aspired to be. He was raised in Chicago, the son of Polish Jews who fled the country at the beginning of the Second World War. Young Sam, whose father worked in the jewellery trade, proved a precocious entrepreneur, first with his Playboy venture, and later, at the University of Michigan, when he bought apartments and rented them out to fellow students.

Mr. Zell used these early deals to create the foundation of what would become one of the country's largest real estate empires. In the early 1970s, when the market was ebullient, Mr. Zell formed a company specializing in distressed assets, correctly predicting a downturn.

Then, when property values tanked, he bought buildings on the cheap, an effort he repeated in the 1980s, with similar success, after the economy was shaken by the savings and loans debacle.

But his biggest coup may have been the way he exited Equity Office. In the spring of 2007, at the height of the private equity frenzy – and before the downturn in credit markets – Mr. Zell sold the company for $39-billion after a bidding war.Mr. Zell fanned the competition by sending a poem to a suitor's CEO: “Dear Stevie,” it read. “Roses are red/ Violets are blue/ I heard a rumour./ Is it true? Love and kisses, Sam.”

His flouting of decorum betrays an impatience with self-righteousness and gravity.

“The eleventh commandment is thou shalt not take thyself seriously,” he told employees at the Chicago Tribune in February, referring to a new handbook for staff he had drawn up. “I'm the first one to laugh at Sam.”

As if to punctuate the point, he staged an elaborate April Fool's joke this week, issuing a press release that Tribune had changed its name to ZellCoMediaEnterprises Inc., or ZCMEINC., and was moving to edible ink and a licorice press.

“H---, I put $315-million into this thing, and we're on the hook for $13-billion,” Mr. Zell spoofed in the statement, mock-censoring his use of the word hell. “The least I ought to get is my name on the company's stationery.”

No early retirement

When he sold Equity Office, pocketing close to $1-billion, Mr. Zell could have eased back, indulging his love of motorcycles (he rides with a posse he dubbed Zell's Angels), or his passion for paintball and skiing.

Instead, he did what he seems congenitally programmed to do: Head back into the building while everyone is running for the fire exit.

In the spring of last year, he emerged as the victor in a bidding battle for Tribune, the storied but troubled media company based in his hometown of Chicago. He won largely because of a strategy that allowed him to reduce his tax bill drastically and fund the overwhelming majority of the price tag with debt.

In fact, he put up just $315-million of the $8.2-billion purchase, and then used the favourable credit environment to borrow the rest.

The tax aspect was particularly clever: The company gets housed in an employee share ownership program, or ESOP, which gives employees an equity stake. Future pension benefits get paid by Tribune into the ESOP, which in turn reduces debt; and because these are viewed as debt repayments, they are tax deductible. The best part for Mr. Zell? The deal gives him the option of acquiring a 40-per-cent stake in Tribune.

Mr. Zell has been attempting to change the corporate culture by reminding employees they are now co-owners – that there is an added profit motive if they support his vision, and a concomitant problem if they don't.

“If the Tribune deal doesn't work, it ain't going to change my lifestyle,” he told Tribune staffers in Chicago. “It really isn't. But if the Tribune deal doesn't work, or if it does work, it's really going to change your lifestyle.”

Similarly, Mr. Zell has attempted to explain his coarse language as a motivational tool: That his lapse into epithets and salty language is merely a ploy to shake people out of a stupor, to prick their complacency.

Top-down culture

That culture was highly centralized, with dictums issued regularly from Chicago; bureaucratic; and very cost conscious. More than a few analysts have suggested that Tribune, like several other media companies, cut costs to maintain their margins when they should have been investing in their papers – and, specifically, their papers' websites – to preserve an evaporating readership.

Mr. Zell has betrayed none of the typical purchaser's modesty. Instead, he has taken frequent jabs at past company management, telling employees that he “keeps discovering new bullshit within the organization,” and muttering aloud about a decision-by-committee mentality that required 10 signatures in order for a Pennsylvania television station to buy a $10,000 jeep.

Since taking over, Mr. Zell has attempted to raze the culture by replenishing the senior management team with trusted lieutenants and giving his properties more autonomy: Local papers will decide what they do in a particular market and they will also be responsible for creating and meeting their own budgets. Most importantly, though, in some people's minds, he's showed up.

“I'd say when he came to visit our shop, what a lot of my managers came away with was we didn't often get visits from executives before. And when they did, they couldn't pronounce the names of the local cities,” said Digby Solomon, publisher of the Daily Press in Newport News, Va. “It's not as though the people who have been running newspaper companies are stupid, but I think in any sort of business, you get trapped in a particular way of thinking, and it's just very difficult to shake loose from that.”

The Daily Press fits the mould of what Mr. Zell has described as his “petri dish” model – using smaller papers as testing grounds, or incubators, for new ideas that could be rolled out to the chain's larger papers.

The paper has already taken one gamble, replacing its front page with virtually all local news, rather than the conventional format of national news being afforded the prime placement. It may not sound like much, but this is the kind of change that gives newsrooms pause: There were serious concerns about people cancelling their subscriptions. In the end, none did.

“Everyone was afraid to test it,” Mr. Solomon conceded. “But this isn't a heart transplant – if we screw it up, we can change it tomorrow.”

The Daily Press is one of the more profitable papers in the chain, and is helped somewhat by being smaller. It has a daily paid circulation of 83,000, although that number is expected to decline as it raises subscription prices: Another necessary step, in Mr. Solomon's mind, that papers have been loath to make. That, in turn, will force the sales group to adjust, and begin selling on the basis of demographics rather than readership numbers.

“We've created this very high-cost structure for a customer group that we've trained to pay the lowest possible amount,” he said. “And that's just suicide.”

Likewise, efforts are under way to change the sales culture in Florida. Mr. Zell has talked about an initiative at the Orlando Sentinel to rotate sales staff among different clients every six months, an effort he said “scared them to death,” since it amounted to going on commission rather than taking orders.

Mr. Zell has even reversed a policy that prohibited strip clubs from advertising in the L.A. Times, garnering some unwanted attention in the process (he reportedly told a group of employees that “Some of my best friends go to gentlemen's clubs,” and that it's “un-American” not to like a certain part of the female anatomy).

Doomed by debt?

None of these changes on its own are sufficient to turn back the tide of industry troubles; and many, especially those geared toward transforming culture, may not bear fruit for several years, if at all.

That presents Mr. Zell with some problems, considering the crushing debt burden the company now shoulders. Although he indicated an appreciation of the industry's dismal performance when he bought Tribune, it seems as though he underestimated just how ugly things would get amid the current economic downturn.

Although Tribune does not have to report its financial results publicly, now that it is no longer trading on the markets, Mr. Zell has continued to disclose the company's numbers.

Last month, the Tribune reported a fourth-quarter loss from continuing operations of $78-million, versus a profit of $233-million at the end of 2006. For all of 2007, operating profit fell to just $55-million, compared with $661-million the year before.

Part of that stems from higher interest expense on the company's swollen debt load.

Ad revenue also continued its decline, falling by 15 per cent in the quarter, including a 25-per-cent plunge in classifieds.

That has forced Mr. Zell to make job cuts, which doesn't mesh with his vision of Tribune as a growth company. Tribune did not provide precise figures, but it's estimated that staffing levels were reduced by between 400 and 500 positions.

“Unfortunately, I can't turn this ship from its course of the past 10 years within just a few months,” Mr. Zell wrote in a memo to staff. “But make no mistake. This is not my ultimate strategy for our company. I believe we can achieve greatness. I have staked my reputation on it.”

The rating agencies aren't so convinced.

Tribune's debt is already in the junk category, but in February, Standard & Poor's said it was placing the publisher's ratings under review with a negative outlook, citing “weakening operating trends” in the newspaper group.

Tribune must pay $1.4-billion on its debt over the next 14 months: It has a payment of $650-million due in December, and another $750-million due in June, 2009, according to Fitch Ratings.

When Mr. Zell bought Tribune, the assumption was that he would sell the Cubs before opening day, ridding himself of a non-core property and raising money to pay down debt. However, he has been aiming to maximize the sale price by divesting the team and its iconic stadium, Wrigley Field, separately, which has complicated the process (and created a backlash in Chicago, where traditionalists are incensed at the prospect that their field could soon be outfitted with the name of a corporate sponsor).

Core assets may go

Cost cuts aren't going to save $1.4-billion, so Mr. Zell has now been forced to do something he didn't want to: Explore the sale of core assets.

When he released the results last month, Mr. Zell said the company had begun a strategic review of certain properties. Indeed, media reports surfaced recently that he has held talks with several suitors about offloading Newsday, the Long Island, N.Y., paper.

There is little doubt, though, that some assets will have to go, said Dave Novosel, an analyst with Gimme Credit in New York.

Mr. Novosel estimated Newsday could fetch $600-million, and that the Cubs and Wrigley Field (along with a minority stake in a local sports network) could command $1-billion.

Mr. Zell could also dispense of the company's 31-per-cent interest in the Food Network, which could be worth between $500-million and $1-billion.

A combination of these could present a short-term fix, but Mr. Zell doesn't want to sell off his media empire piecemeal; and Tribune must be careful it doesn't amputate cash-generating properties that can help pay down borrowing costs over the next several years.

This week, Mr. Zell summoned his gallows humour, and joked to a conference that moving from real estate to newspapers was akin to progressing “from leprosy to cancer.”

Lenders are awaiting a conference call with Tribune on April 17 to see just how bad things are.

“There's certainly a very limited margin of safety at their current capital structure,” conceded Mike Simonton, a credit analyst with Fitch.

Mr. Simonton said he is encouraged by some of the steps Mr. Zell has taken, especially in terms of addressing cultural issues at the newspaper, but said the real question is whether these moves will even be relevant, given the short-term liquidity issues Tribune is facing.

“They're very aware that the clock is ticking.”