Sam Zell, the real estate tycoon who specialized in distressed assets and acquired The Chicago Tribune, The Los Angeles Times and other storied but troubled newspapers in a widely criticized leveraged buyout of the parent Tribune Company in 2007, died on Thursday. He was 81.

His death was announced in a statement by Equity Group Investments, the firm that Mr. Zell founded and of which he had been chairman. The statement did not say where he died and attributed his only death to “complications from a recent illness.”

In a career of spectacular deals celebrated mostly in board rooms and financial columns, Mr. Zell’s venture into the publishing world as chairman of the Tribune Company proved to be a resounding failure, a five-year descent into a maelstrom of rancor, downsizing, management scandals and bankruptcy.

At the end of 2012, the Tribune Company emerged from bankruptcy relatively intact but with half its value and with Mr. Zell gone, replaced by senior creditors, who installed new managers and planned to sell flagship newspapers and other assets. Mr. Zell’s personal losses were not heavy by his standards, but the episode was widely seen as a black eye for a real estate mogul out of his depth in newspapers.

The son of Polish Jews who fled to America in 1939 as World War II engulfed Europe, Mr. Zell, an abrasive and eccentric Chicagoan who reveled in testing the limits of business deals as well as motorcycles, amassed one of the nation’s largest portfolios of apartments, offices and commercial real estate, mostly by snatching up properties that other investors had snubbed as too risky or even moribund.

He called himself “the grave dancer,” celebrating his own sow’s-ear-to-silk-purse triumphs as a high-stakes speculator who found opportunities where others saw only stress.

A diminutive man with a raspy voice, a bald pate, squinty eyes and a white beard, he favored gold chains, bright sport shirts and jeans. He often rode a bright yellow Ducati to work at breakneck speeds, and he sometimes went on road trips with a leather-jacketed bunch he called Zell’s Angels. He could shock dignitaries with expletives and insults and lace his speeches with profanities. But he would also send hundreds of music boxes to acquaintances at Christmastime.

Unlike Donald J. Trump and Harry Helmsley, who used their names on trophy properties and as self-promotion, Mr. Zell was relatively anonymous for most of his career, known largely in financial and real estate circles as an audacious investor whose vision — to create a national brand — did not materialize because real estate sales are largely local.

Nevertheless, in 2007, the Blackstone Group bought Mr. Zell’s firm — then known as Equity Office Properties Trust — for $39 billion. His own fortune was estimated at nearly $5 billion, and with holdings in residential properties, drug and department stores, and energy and electronics companies — a lifetime of acquisitions that made him one of the nation’s wealthiest men — he might have retired comfortably in his mid-60s.

But seeing yet another inefficient market, he plunged into the unfamiliar world of newspapers, winning a bidding war for one of the nation’s premier media companies, the 160-year-old Tribune empire. Besides the Chicago and Los Angeles newspapers, it included The Baltimore Sun, Newsday, The Hartford Courant, 23 television and radio stations, the Chicago Cubs and Wrigley Field.

A Deal Comes With Debt

Like many newspapers, the Tribune properties were hemorrhaging advertising revenues and readers to the internet. The company had been on the auction block for months when Mr. Zell — insisting that his interests were purely economic, not editorial — offered $34 a share in a complex transaction to take the company private under an employee stock-ownership plan.

He acquired control in December 2007 in an $8.2 billion deal whose financing required him to put up only $315 million, but that saddled the employee-owners with more than $13 billion in debt, including $5 billion in existing Tribune obligations. In that highly leveraged buyout, the debt was to be paid off almost entirely by cash generated by the company’s continuing operations.

The new corporation was exempt from federal income taxes, and the debt was reduced by the sale of Newsday, the Cubs and Wrigley Field. But employees, who had no say in the deal, assumed a crushing burden and stood to gain only if the company survived, while Mr. Zell, for a relatively modest investment, became chairman and secured an option to buy 40 percent of the company for $500 million if it prospered.

Employees filed a barrage of lawsuits, but they had little effect, and the transaction was widely denounced by media commentators as lopsided — a potentially lucrative coup for Mr. Zell at the expense of thousands of employees, whose jobs, careers, pensions and futures had been mortgaged under a mountain of debt.

Floyd Norris, in a commentary in The New York Times, called it “one of the most absurd deals ever,” adding: “If the company falters, the workers could find that they have no jobs, and a lot of company stock that has little value. Most of Mr. Zell’s investment will be classified as a loan to the company, giving him a chance of recovering money even if the stock becomes worthless.”

Mr. Zell himself proclaimed, “There’s a new sheriff in town!” as he toured Tribune company offices. And he noted in a memo to employees: “I’ve said repeatedly that no matter what happens in this transaction, my lifestyle won’t change. Yours, on the other hand, could change dramatically if we get this right.”

He sold assets, prodded workers to greater productivity and cut news budgets and 4,200 jobs. But he had no innovative plan to reinvent the company, whose audiences, ad revenues and financial condition continued to deteriorate. Less than a year after his takeover, the company filed for bankruptcy protection, the largest in American media history, although its operations continued.

Mr. Zell installed managers who, like him, had no newspaper experience. His chief executive, Randy Michaels, a former radio executive and disc jockey, resigned in the face of allegations that he had sexually harassed staff members and alienated many more with outlandish cronyism that included beer-and-poker parties in the office that had once belonged to Col. Robert R. McCormick, the storied Tribune publisher.

“It’s normally a shrine,” a reporter recalled. “We pretty much desecrated it with gambling, booze and cigars.”

Critics said the newspapers’ journalistic quality declined, with lighter news content and occasionally a mingling of advertising and news, widely regarded as a journalistic taboo. Mr. Zell told reporters that they should be part of the quest for revenues, an unsettling prospect for most journalists. Staffers protested, but to no avail.

After four years of negotiations to restructure its debts, the Tribune Company emerged from bankruptcy protection on Dec. 31, 2012, under the control of the investment firms Oaktree Capital and Angelo, Gordon & Company, as well as JP Morgan, the lead lender in the original $8.2 billion buyout.

The company still owned 23 television stations, eight daily newspapers and other media assets, all of which the reorganization plan valued at $4.5 billion after cash distributions and new financing. Mr. Zell, who had voiced some regrets over his decision to buy the company, was replaced as chairman by the new owners, who announced months later that the company was weighing the sale of The Chicago Tribune, The Los Angeles Times and other assets in a plan to focus on its more lucrative television businesses.

In 2016, Tribune Publishing’s newspaper arm rebranded itself with a puzzling new name that has since fallen away — Tronc, for “Tribune online content.” Company leaders warred with newsroom employees at The Los Angeles Times until Tribune offloaded much of the company in 2018 for $500 million to Dr. Patrick Soon-Shiong, a medical entrepreneur, and his wife, Michelle B. Chan.

In another sign of the financial industry’s growing influence on the fading newspaper business, Alden Global Capital, a hedge fund that severely cut costs at newspapers it owned, acquired a 32 percent controlling interest in Tribune Publishing and its nine major metropolitan dailies, including The Chicago Tribune and The Daily News of New York.

In 2019, more than a decade after Mr. Zell took the Tribune Company private, he and dozens of other former executives agreed to pay $200 million to settle a lawsuit brought by unsecured creditors. Still, a year later, Forbes said Mr. Zell had a net worth of $4.7 billion and was among the world’s 400 richest people.

Entrepreneur at 12

He was born Samuel Zielonka on Sept. 28, 1941, in Chicago. He was the son of Berek and Ruchla Zielonka, who changed their names to Bernard and Rochelle Zell after immigrating and settling in that city, where the father went into real estate and wholesale jewelry.

Sam grew up an entrepreneur. At 12, he found Hugh Hefner’s new Playboy magazine on newsstands, bought copies for 50 cents and peddled them to neighborhood boys for $3 each. At Highland Park High School, his graduation picture in the 1959 yearbook was captioned, “I’m not asking you, I’m telling you.”

At the University of Michigan at Ann Arbor, he began managing some off-campus housing for a landlord. He and a friend, Robert H. Lurie, who became his business partner, bought cheap homes, fixed them up and rented apartments to fellow students. Mr. Zell graduated in 1963 and earned a law degree in 1966.

In the 1970s and ’80s, he and Mr. Lurie acquired diversified national holdings in residential and commercial real estate, anticipating boom-and-bust cycles and picking up distressed assets.

In 1976, Mr. Zell was indicted on a charge of tax evasion in a real estate deal. But the charge was dropped after he agreed to testify against his brother-in-law, Roger Baskes, who was sentenced to prison and served two years.

After Mr. Lurie died in 1990, Mr. Zell had a brush with bankruptcy. But in 1993 he acquired Jacor Communications, a struggling radio business, which he expanded into one of the nation’s largest radio chains before selling it in 1998 to Clear Channel Communications for $4.4 billion.

He prospered in publicly traded real estate investment trusts, which attracted investors with tax advantages and large returns. His trusts were among the nation’s largest for residential and commercial properties and mobile home parks. His $39 billion sale of Equity Office Properties, one of the largest leveraged buyouts ever, came just before the recession of 2008 and 2009, which devastated real estate markets and the national economy.

The Tribune takeover was explored in “The Deal From Hell: How Moguls and Wall Street Plundered Great American Newspapers” (2011), by James O’Shea, a former senior editor at The Chicago Tribune and The Los Angeles Times. Mr. Zell’s life was examined in a 2009 biography by Ben Johnson.

A contrarian in business and private life, Mr. Zell eschewed conventions and was notoriously blunt, often barking at employees and using vulgarities in speeches and meetings. When the former Secretary of State Warren M. Christopher and others met him to voice concern over the health of The Los Angeles Times, Mr. Zell said he did not care what they thought, using an expletive for emphasis.

Mr. Zell, who had homes in Chicago, Sun Valley, Idaho and Malibu, Calif., was an active philanthropist, giving millions to the University of Michigan, Northwestern University and the Wharton School of the University of Pennsylvania. He was also a major donor to causes in Israel and to the American Jewish Committee, a Jewish primary school in Chicago named for his father, and other cultural and educational institutions.

He was married three times and divorced twice and had three children. He and his third wife, Helen Herzog Fadim, wed in 1999. She survives him, along with two sisters, Julie Baskes and Leah Zell; his daughters, Kellie and JoAnn Zell; his son, Matthew; and nine grandchildren.

Alex Traub contributed reporting.

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