It was late 2006, and Los Angeles Times managing editor Leo Wolinsky had been summoned to the home of entertainment mogul David Geffen. A billionaire five times over, Geffen was interested in buying the newspaper Wolinsky edited. Very interested. His opening bid, as the Times itself would later report: $2 billion. Cash.
Wolinsky recalls driving past Geffen's imposing gates for what felt like a good mile, across the palatial estate once owned by Warner Bros. founder Jack Warner, through a manicured park. Geffen said he employed 13 full-time gardeners.
"Look, I could do it with 10," Geffen said. "But I want it done right."
The two talked about the L.A. Times. Actually, it was mostly Geffen who did the talking.
"He knew what he wanted to do," Wolinsky says. "I asked a question or two, and he launched into a two-hour — I wouldn't call it a diatribe — a monologue, about everything. He really thought he could save the paper."
Geffen never had the chance to make a formal offer. His overtures were rejected out of hand by Dennis FitzSimons, CEO of Tribune Co., the Times' corporate parent. Its board of directors thought it could do better selling the entire Tribune package: eight newspapers, more than 20 TV stations, the Chicago Cubs and a 30 percent stake in the Food Network.
Indeed they did, when investor Sam Zell borrowed $12 billion to buy it in an audacious and tragically timed leveraged buyout on the eve of the global financial collapse.
Last month, Tribune Co. and the Los Angeles Times emerged from a bitterly contested, four-year bankruptcy drama. Now there's every expectation that the L.A. Times will be sold to a new owner, possibly even before the end of spring.
The Geffen episode stands as a tantalizing what-if — what if David Geffen had bought the paper and run it like his garden? Would things be any different?
"When it became clear that [Tribune] was going to go to Zell, [Geffen] predicted the paper would be severely cut," Wolinsky says. "He said if they took the paper apart, he wouldn't be interested in it. I haven't heard from him since."
Via email, Geffen says only this: "I was interested at that time but never was allowed to look at the books or in any way investigate the LAT financial situation. I have no interest in the LAT now or since that time. I simply do not want to talk about it."
Since the sale, revenue has tanked at newspapers throughout the industrialized world, thanks to the prolonged recession and cultural shifts in news consumption.
But the Times would be put through its own private hell — Zell Hell, some would call it, although, in fairness, the budget-cutting started long before he arrived.
According to the American Society of News Editors, the number of newsroom employees in the United States has fallen 27 percent since 1989. But since its peak in 1999, with 1,300 editorial employees, the L.A. Times has lost 60 percent of its newsroom employees, currently stabilizing at just above 500.
Geffen was prophetic: A paper that he had valued at $2 billion probably is worth $200 million to $400 million today.
Yet the Times remains a relatively strong brand, the dominant daily in the second-largest city in America and the fourth highest–circulation paper in the United States. As of 2011, according to the American Society of News Editors, the L.A. Times was second only to the New York Daily News in combined print and online local readers — the close-in folks whom newspapers are trying so hard to win back.
Perhaps most surprising, bankruptcy or not, the L.A. Times on its own makes a tidy profit — $70 million in 2011, according to a former Tribune Co. employee in a position to know, as well as a wealthy businessman among the many who have tossed around the idea of buying the paper.
"It's a smaller paper, physically," these days, California historian D.J. Waldie says. "Its capacity to reach across the globe and tell the stories that need to be told has shrunk. But its presence in the lives of many local residents is strong. And its voice, though diminished, is the loudest we hear."
It's no exaggeration to say that the new owner will have an enormous influence on politics, culture and civic life in L.A.
Early this week, news broke that Tribune Co. has hired financial advisers to sell its newspapers. The question is, who will buy the Los Angeles Times, and why?
"The new mayor will probably have a bigger impact than the new owner of the Times," Waldie says. "But not much more."
For 114 years, the L.A. Times was owned by the Chandler family, a lineage so essential to the city's history that David Halberstam wrote, in The Powers That Be: "No single family dominates any major region of this country as the Chandlers have. ... They did not so much foster growth in Southern California as ... invent it. We have water because the Chandler family stole it for us; we have large horizontal sprawl and a port in San Pedro because they wanted it that way."