Back to Basics

Chastened by the embarrassing massive layoffs, cutbacks and bankruptcy of the Tribune Co., Sam Zell is returning to his roots--real estate. So states the article in the Wall Street Journal, "Sam Zell Looks to Brazil to Change His Luck."

Zell is poised to become a big player in the affordable housing market in --Brazil. Yes, you read correctly. Brazil. Zell's private equity real estate firm owns a 19 percent stake in Gafisa SA, a Brazilian home builder. Brazil, whose President Inacio Lula da Silva recently blamed the worldwide financial meltdown on "white, blue-eyed people," is banking on white-skinned, white-haired gnome-like Zell to help build 1 million new homes for the country's low-income families.

Zell's Equity International Properties has $1.5 billion invested in warehouses in China and retirement villages in New Zealand. Who knew? However, the company is betting big on Brazil, where it has invested half of its capital. Equity International, which also owns apartments in the United States, has lost more than half its stock value in the past year, which is no surprise considering the real estate funk.

Zell, himself, has lost half of his net worth in the past year. He's down to a mere $3 billion. Everything that Zell touches no longer turns to gold, so we'll have to watch Zell's samba in Brazil to see whether he's lost his touch entirely.

But it sure must make the folks at Tribune feel real secure knowing that the guy who bought the company on a whim, investing just $300 million or so in the $8 billion buyout, has lost interest in his newspaper venture.

Day of Reckoning

Heard there were some more staff cuts at the Orlando Sentinel, but don't know the particulars. It wouldn't surprise me, given that so much has been happening of late in the newspaper industry.

The Miami Herald is about to slash about 19 percent of its staff, and those remaining will take a pay cut and a one-week furlough. Those making less than $50,000 will take a 5 percent cut, while those earning more will see their pay go down 10 percent. I guess it beats not having a job. Meanwhile, no candidate has stepped forward to buy the paper.

The Seattle Post-Intelligencer published its last print edition Tuesday and converted to an online edition only. In the process about 90 percent of the staff was let go. That ought to make eyes pop. If online is about 10 percent of newspaper revenue, then I guess you need only 10 percent of the staff?

I can hear it now: You have to align the staff to the numbers, Maria.

Indeed.

Anybody have more info about how the Sentinel is aligning staff to revenue, please let the rest of us know.