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Tribune Set to Go Private Under Billionaire Zell

The Sam Zell era is about to begin at Tribune.

The real estate billionaire and self-described "professional opportunist" was set to take the ailing newspaper and TV company private with the expected closing of his $8.2 billion buyout as soon as Thursday.

No one knows exactly what cutbacks, asset sales or other moves to expect from the fiery Zell -- known as a brilliant investor and bargain-hunter in industries other than media. But even a man who long ago dubbed himself "The Grave Dancer" for his ability to revive moribund properties faces a tough task in trying to turn around the nation's second-largest newspaper publisher, its revenues still in free fall.

The 66-year-old Zell is set to become chairman when the deal closes after more than eight months in limbo, and he may also take over as chief executive. The Chicago Tribune, one of the company's two flagship newspapers along with the Los Angeles Times, cited an anonymous source as saying he will become CEO.

Whether he adds the top executive post or not, it's clear he will be in command at Tribune Tower as the investor who put the debt-heavy deal together and will head the board of directors. A first task, while eyeing other assets, is likely to be to push ahead with auctioning off the Chicago Cubs, whose sale he insisted on as a condition of the transaction.

Company spokesman Gary Weitman declined comment and a Zell spokeswoman did not return messages.

Under terms set when he crafted the buyout deal in April, Zell's investment in Tribune will rise to $315 million from $250 million and he will own warrants to buy about 40 percent of the company, which will be formally owned by an employee stock ownership plan.

Setting the stage for the transition, the company said Wednesday that Dennis FitzSimons will step down as chairman and CEO once the deal closes and will leave the company at the end of the year.

FitzSimons, whose five-year tenure coincided with a historic downturn in the newspaper industry that forced the company's sale, expressed optimism for Tribune's future and hope that the shifting of its resources to focus on the Internet will pay off.

He cited as strengths the recent performance of the TV group, cable superstation WGN, and the company's sizable stakes in the Food Network and the CareerBuilder online classified advertising venture.

Any of those assets could be candidates for Zell to dispose of to raise cash, along with the Cubs, Wrigley Field and the Chicago-based Comcast sports channel, which are targeted to be sold in the first half of 2008.

"What I think is going to happen is the transformation will continue, and I believe -- and clearly Sam believes -- that there is tremendous value in these assets going forward," FitzSimons said in an interview.

Before the deal closes, the four banks that pledged to provide financing for the deal -- JP Morgan Chase, Merrill Lynch, Citigroup and Bank of America -- must wire the cash to the company. Analysts said the banks did not seem in position to back out but may give the deal more scrutiny in light of Tribune's declining financial performance.

Tribune owns nine daily newspapers along with 23 television stations and the Cubs.