The End of Times
AP Photo/John T. Barr
This was not just another Sunday at the Los Angeles Times:
At about 7:30 p.m., prim editor in chief Michael Parks calmly left his office, strode to the city desk, and requested the home phone numbers of Mayor Richard Riordan, Cardinal Roger Mahony and Governor Gray Davis, because sometime in the next hour were going to need to begin notifying people. Hizzoner, His Eminence and His Grayness were shortly to learn that the L.A. Times had been sold to a Chicago media conglomerate and that Mark H. Willes, the CEO of the papers parent corporation, was out of a job.
The sale, to the Chicago-based Tribune Co., is the culmination of the Times evolution from a family-owned paper with aspirations of national greatness to a corporate commodity with a future defined by profit margins. The only clear winners are certain members of the Chandler family, who wanted a payoff and were only too willing to surrender control of the family heirloom in the bargain.
For shareholders, the deal has appeal, but for readers, Times employees and the people of Los Angeles, the picture is murkier. The city will no longer have a locally owned major metropolitan daily newspaper unlike Washington, D.C., New York City and Chicago. If the L.A. Times follows the path of the Chicago Tribune the flagship paper of the new owners a remade Times will be leaner, focus more heavily on local news, and cut back bureau operations in other regions and across the world.
While its being characterized as a merger, said Times executive editor Leo C. Wolinsky, its clearly an acquisition, and they are in charge.
The change in ownership obliterates the Times Mirror Corp., while also ending the frenetic and sometimes embarrassing five-year reign of Times Mirror CEO Mark Willes. On Monday, staffers were predictably shell-shocked, but also ambivalent. People cant get used to the idea that somebody else controls us, noted one editor, who asked not to be named. That were number two. Thats going to be the hardest thing to get used to. On the other hand, he added, maybe local ownership is a 20th-century notion. Id rather have a good publisher from Chicago than a stupid publisher from Los Angeles. It couldnt be any worse than what weve had. The editor paused. Then again, maybe it could.
The first rumors of change afoot drifted across the newsroom last Friday. Something about Willes being out. And the Tribune buying the Times. The chatter died out as Times employees focused instead on that nights editorial-awards banquet at the Beverly Hills Hotel. Willes was a no-show, canceling at the last minute.
By the time Parks started dialing on Sunday, a deal was in hand. By Monday, it was left to Kathryn Downing, Willes hand-picked publisher, to handle a Q&A with some 400 employees assembled in the Chandler Auditorium.
As they waited, some staffers joked about becoming Cubs fans Tribune owns the Cubs. Because many Times employees own company stock, there also were merry twitters about the Times stock price, which skyrocketed over the merger news. Of course, these employees may be looking for jobs should Tribune attempt to recoup its expected cash outlay of $2.66 billion.
When she appeared, Downing looked surprisingly relaxed, if subdued, in a black business dress and jacket, with a gold butterfly pin in her right lapel and a bottle of Ice Mountain water at her side. She wore a sneaker on her left foot and a black pump on her right, and stationed herself behind a wooden podium on the only chair in the hall. Sitting was a necessity, she explained, because I tore three ligaments in my left ankle. Most of the mornings 45-minute session was questions and answers, and Downing didnt have too many of the latter.
She took pains to assure staffers that the paper would maintain its editorial independence and that Q&A updates would appear in printed form: We will publish every question except the ones that are abusive and rude.
As for the future: They do not envision large layoffs, but I will tell you that the [profit] margins of the L.A. Times are in the mid- to high teens. The margins of Tribune papers are in the 30s.
An audible gasp swept across the hall.
She quickly added, The Tribune deserves a chance to make their case and tell you how they are going to run this great paper.
Why do they want to buy us? asked one staffer.
We are a crown jewel, answered Downing. Who wouldnt want to own the Los Angeles Times?
Wasnt the sale a vote of no confidence in the city of Los Angeles? a reporter asked. And what about the effect on the corporations local charitable efforts and civic involvement?
I dont know whether there was a discussion on the impact on Los Angeles, answered Downing. I cant tell you what the Tribune would or would not do.
She added, I know how frustrating it is to be in these meetings and hear, I dont know, I dont know.
Because there was so much that Downing did not know, one employee finally asked her about her personal reaction to being so entirely out of the loop.
I think everything we say here is on the record, so Im going to say, No comment.
And what would the Chandlers get out of the deal?
Responded Downing: There are good reporters in this town . . . I hope to read about it in the Los Angeles Weekly.
In fact, the details of extra benefits, if any, to the Chandlers have not been disclosed. In the past, however, Chandler-family stock has received special treatment not accorded to other shareholders. Analysts have put the value of these side transactions at many millions of dollars. One such arrangement prompted an investors lawsuit in 1994.
The Tribune deal finally provides an escape hatch for family holdings, which can now be diversified across the stock market. With the exception of retired publisher Otis Chandler the family dissident who built the Times into a world-class newspaper no current member of the clan has shown a particular affinity for journalism.
It angers me, admitted executive editor Wolinsky as he pondered the sale. One of the things that distinguished the paper was that the Times was seen by its owners as an important institution and not just a moneymaking enterprise. This hits hard.
A telling clue to an impending move occurred late last year, when company financier Thomas Unterman disclosed his intentions to move from Times Mirror to a management position with the Chandler-family trust. In previous years, Unterman was widely credited with carving out stock deals that benefited the Chandlers in particular.
This is sort of a logical outcome, said former Times senior editor Noel Greenwood, who retired in 1992. The bad Chandlers, as theyve come to be known, have been terribly unhappy for many years with the return the paper has been providing them. Willes was hired to come in and fatten the goose. And he has made the Chandler family even more obscenely wealthy than they are.
Not to mention Willes himself, but still, this ending is not what Willes would have scripted. According to coverage in the Chicago Tribune, Willes rejected overtures from Tribune last spring, leaving it to representatives of the Chandler family to follow up with Tribune Publishing president Jack Fuller behind Willes back. I told Jack that the family would be willing to think about it, said Unterman, an Illinois native, in a Tribune interview.
For his part, Willes, a General Mills executive who had no previous newspaper experience, evolved beyond the cereal killer, a nickname he earned for cutting 700 jobs at the Times and 2,300 more across Times Mirror.
Once he got in there, noted Greenwood, he found out that being the publisher of the Times was a pretty big deal. The governor wanted to meet with him. People were writing articles about him. They didnt do that when he ran a cereal company. It went to his head. It was a case of Once I couldnt spell publisher, now I are one.
But the infamous Staples Center fiasco undermined his stab at journalistic credibility. Last fall, the Times agreed to devote an entire issue of the Sunday magazine to the new Staples Center, while also splitting the issues profits with the arenas owners an ethical breach that a first-year journalism student could have spotted. Publisher Downing, also a novice to newspapers, took major responsibility for the gaffe, even allowing that she could benefit from taking a course in journalism. That may not be necessary, given that most observers give her little chance to outlast the Willes regime.
The folding of Times Mirror into Tribune will create a coast-to-coast media conglomerate that includes both major newspapers and television stations in New York City, Chicago and Los Angeles. At first glance, it looks as though Times Mirror the nations fourth largest publisher should be swallowing Tribune which comes in at number six. But Tribunes market capitalization its worth on Wall Street is $8.8 billion compared to $2.9 billion for Times Mirror. And Tribune reported $1.48 billion in profits last year compared to $259 million for Times Mirror. Moreover, Times Mirrors healthy profit margin last year of 18.2 percent just doesnt cut it next to Tribunes 29.2 percent.
As to the Times future, there are only two ways to increase profits by raising revenue and by cutting costs. Company executives hope to lure new advertisers by offering joint buys in all the major markets, or by offering joint TV/print buys in the same market. Tribune also owns KTLA Channel 5.
But cost reductions are the fastest way up. The 170 employees in the Times Mirror corporate office need to be updating their résumés about now. And regional and foreign correspondents had better do the same. The Tribunes own foreign operation is smaller than the Times, and the bean counters are bound to question this duplication of effort. For that matter, why have foreign correspondents at all when you can rely on wire services? And why should Los Angeles have an A section so much fatter than what Midwesterners can get by with?
The Tribune is one of these companies that is very much driven by constantly increasing profits, even at the expense of editorial product, said David Moberg, Chicago-based editor of In These Times and a fellow of The Nation Institute. For a paper that has such dominance in its market, it relies on a surprising number of wire-service stories. The Los Angeles Times has more aspirations to be a national paper than the Chicago Tribune does. The Tribune is quite content to be the top dog in the regional market.
At the same time, Moberg added, the Tribune dances its regional turn with credibility. The papers series on the death penalty in Illinois, for example, was influential in the governors decision to put a moratorium on capital punishment.
For former Times editor Greenwood, however, the overall outlook is gloomy. The notion that the Los Angeles Times is in the hands of people who have no obligation, no connection to or bond with Los Angeles or California is just startling. Its pretty clear that any remaining ambition that the Times has to be a national journalistic heavyweight is probably fantasy. The paper has become a commodity, like a hog farm or a copper mine. Advertisers like Vons and Macys dont give a crap about how many people are buying the paper in Washington.
But former Chicago Tribune editor Jim Squires makes a case for pragmatic optimism even though he personally clashed with Tribune CEO John W. Madigan. After all, someone was going to buy the L.A. Times. Compared to legendary Washington Post publisher Katharine Graham and New York Times publisher Arthur Punch Sulzberger, the Tribunes Madigan doesnt come off so good as a newspaperman. But in the context of Mr. Willes and some other people who run newspapers today, hes pretty damn good.
Squires said that the Los Angeles Times could maintain its quality and even improve under Tribune management: In the realistic world of corporate ownership, the Times couldnt have done much better.
Dont get me wrong, he added. I hate corporate ownership. The culture of corporations and the press are by nature adversarial and dont belong together. I wish there was some other way, but I lost that battle. And thats why Im raising thoroughbred horses in Kentucky.