|TROUBLE AT THE L.A. TIMES|
December 16, 1999
The NewsHour Media Unit is funded by a grant from
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TERENCE SMITH: Every night about 11:00, the presses begin to roll at the Los Angeles Times, printing more than a million copies of the newspaper that boasts the largest local circulation in the nation. With an editorial staff of more than a thousand and bureaus in 22 countries, the Times has won a total of 23 Pulitzer Prizes and grown in recent years into one of the most influential papers in the country. But in recent weeks, this important paper has become embroiled in an embarrassing controversy that has sorely strained its credibility with its readers, provoked an open revolt among its newsroom staff, prompted an extraordinary outburst from a revered former publisher and raised questions about the paper's executive leadership.
HENRY WEINSTEIN: A fundamental premise of journalism is that a journalist should not be sharing revenue or have a business relationship with somebody that he's writing a story about. In fact, our own code of ethics for reporters specifically forbids this.
TERENCE SMITH: Henry Weinstein, the Times' legal reporter, has been with the paper for 20 years.
HENRY WEINSTEIN: What we saw in this deal was that the people who run the newspaper had done something that just fragrantly violated our own rules.
|Breaking the rules|
TERENCE SMITH: That something was a partnership agreement the paper reached to sponsor the Staples Center, a new, $400 million sports and entertainment complex that many see as the key to a revival of Los Angeles's downtown. In October, the Times met part of its financial commitment to the new center by publishing this 168-page Sunday magazine supplement about the new facility, and -- here's the controversial part -- splitting the $2 million in advertising revenues with the center. The reporters and editors working on the supplement were not told about the revenue-sharing agreement. Alice Short is editor of the L.A. Times magazine.
ALICE SHORT: If people in editorial had known about it ahead of time, they would have refused to work on it. That's why no one told us.
TERENCE SMITH: It was that far out of bounds?
ALICE SHORT: Absolutely.
TERENCE SMITH: As far as you were concerned.
ALICE SHORT: Absolutely. It just never would have come up on the radar.
TERENCE SMITH: And that's why it didn't come up?
ALICE SHORT: That's my belief.
TERENCE SMITH: It is not uncommon for newspapers to put out special supplements. The New York Times periodically publishes special magazines devoted to travel and fashion. But Ben Bagdikian, former dean of the graduate school of journalism at the University of California, says that what the L.A. Times did was fundamentally different.
BEN BAGDIKIAN: It was a case of going a step further than other papers have done. Those supplements are always filled with puff pieces about the industry, and advertisers are invited to advertise. But this is the first time that I know of and has been publicized in which the paper invited advertisers and said, "Let's split the profits on this whole thing."
TERENCE SMITH: The Times did not disclose the profit-sharing arrangement to its readers, but the details were broken first in the Los Angeles Business Journal, a weekly paper, then in newspapers across the country. The reporters at the L.A. Times were furious.
HENRY WEINSTEIN: Within hours, we had over 300 signatures expressing our indignation about this and, you know, asking for the leaders of the newspaper to tell us what had happened and why they had done this.
ALICE SHORT: There was a big staff meeting and a lot of emotional comments from people who wanted to express their anger and disgust and sense of betrayal.
TERENCE SMITH: Magazine editor Alice Short was among the 1,000 employees who attended. Did you have a sense of betrayal?
ALICE SHORT: Oh, yeah. God, yes.
TERENCE SMITH: Kathryn Downing, who had recently been appointed publisher, apologized to the staff at the meeting and in a memo, conceding that she had made a mistake by not telling the editorial staff about the Staples arrangement. She acknowledged her lack of experience in the newspaper business and promised to "spend more time with our journalists to gain a better appreciation of their efforts."
LEO WOLINSKY: If we ever do find ourselves involved in something like this again, I believe the most important thing is disclosing it to our readers.
TERENCE SMITH: Leo Wolinsky, a managing editor, said the Staples incident had a devastating impact on his staff.
LEO WOLINSKY: All you have -- what you build up over all the years of the reporting you do -- is your reputation for credibility. There is nothing else that any of us have. You know, you can be a good writer, you can be a good editor, but it doesn't mean anything if you don't have that credibility. People felt that a lot of what they brought to the table was suddenly taken away.
TERENCE SMITH: The furor over the Staples agreement ratcheted up a few weeks later when Otis Chandler, a respected former publisher, released a blistering statement that, at his request, was read aloud in the newsroom. He described the Staples deal as "unbelievably stupid and unprofessional," and the recent decisions of the current management as "the most single devastating period ... in the history of this great newspaper." The assembled staff broke into applause, and later plastered the newsroom with pictures of the former publisher.
TERENCE SMITH: It was sort of an extraordinary development?
HENRY WEINSTEIN: Mind-boggling.
TERENCE SMITH: And the reaction around here?
HENRY WEINSTEIN: I think that most of the people were very buoyed that, that somebody who had run the paper for a long time, who had played an absolutely critical role in making this newspaper a terrific newspaper, was on their side.
|Trying to stay competitive|
TERENCE SMITH: Despite its power and prestige, the Los Angeles Times, like other major papers around the country, has been feeling the economic pinch of competition from television, the Internet and other new media. When Mark Willes took over four and a half years ago, the Times was in a slump; profits were down, costs were up, and most alarmingly, circulation in the greater Los Angeles area was declining. Willes decided that radical surgery was necessary. Willes, a former vice chairman at General Mills with no prior newspaper experience, immediately began cutting staff and costs, earning the nicknames among the staff of "Captain Crunch" and the "Cereal Killer." He stated publicly that he would tear down the traditional wall between the editorial and the business sides of the paper. Business managers were appointed to work with section editors to increase advertising revenues and circulation. The economics of the paper are never far from sight or mind at Mark Willes' Los Angeles Times. Television monitors throughout the building display the stock price on a daily basis. In a speech last year, Willes described his vision of the newspaper's future.
MARK WILLES: The various sections of the paper have or are developing business plans that include ways to measure income, costs and readership. Not every section must earn a profit -- clearly some will not. But every section must improve in some measurable way. Business success is required to underwrite journalistic success.
TERENCE SMITH: Willes has always maintained that this injection of business sense would not jeopardize the paper's editorial integrity.
MARK WILLES: Let me talk about one thing we are not changing, and that is our focus on and our commitment to the practice of high-quality, independent journalism.
TERENCE SMITH: But to some newspaper traditionalists like Ben Bagdikian, the notion of the business side of the paper commingling with the editorial side is heresy.
BEN BAGDIKIAN: That's very close to corruption, not because either party is corrupt, but because both parties are looking in different directions. When you put them together, you are having one party whose obligation it is to make money and not offend the people who provide the money to help select the news. And one of the ghosts that hover over every single newspaper is, will this story offend an advertiser who will pull ads?
TERENCE SMITH: This fall, an important advertiser was offended when the L.A. Times consumer columnist Ken Reich raised questions about a major auto dealer's pricing practices. The dealer complained in a letter to Times management, and Reich said he was told the column would not run as written.
KEN REICH: I told Leo that if the column didn't run, I was going to quit as a columnist and make a statement to the staff about it.
TERENCE SMITH: Ken Reich has been with the Los Angeles Times for 34 years.
KEN REICH: We began to talk about a compromise, and it entailed certain compromises in the story. And then there was a long period of uncertainty in the afternoon. It was up to Michael Parks when the column was going to run. A very few minutes short of deadline, Parks decided the column would run, and it ran as we had worked it out.
TERENCE SMITH: The Times editors said they held up the column briefly because of editorial -- not business -- considerations. But they acknowledged that they shared the advertiser's letter and concerns with columnist Reich.
KEN REICH: This was unusual. I have written 86 columns, and this was the only one that has given me trouble in terms of getting it into the paper.
TERENCE SMITH: Willes and publisher Kathryn Downing declined to be interviewed for this story, pending a thorough reconstruction of the Staples incident that David Shaw, the Times' Pulitzer Prize-Winning media critic, is currently writing, and that the paper has promised to publish.
TERENCE SMITH: If the two top executives at the Los Angeles Times have no experience with newspapers, what kind of message does that send?
LEO WOLINSKY: It says they have to rely on the people inside who do have the experience.
TERENCE SMITH: We have to conclude in this case, they did not draw on that experience.
LEO WOLINSKY: No, in this case they did not. They decided not to involve the editorial.
TERENCE SMITH: Despite the controversy generated by Willes' unorthodox ideas, a new survey by Editor and Publisher magazine indicates that many top newspaper executives agree with him. A striking 72 percent called for closer cooperation between the news and business departments, while 67 percent conceded that advertising and editorial guidelines are occasionally breached at other papers.
LEO WOLINSKY: (on phone) We're also in the process of redesigning the paper.
|Newspapers and Wall Street|
TERENCE SMITH: Managing Editor Leo Wolinsky argues that despite the Staples incident, it would be unrealistic to try to re-erect a wall between the business and editorial sides of the paper.
LEO WOLINSKY: The wall was always a misnomer in a way, because there's conversations that have always had to go on between advertising and editorial and circulation.
TERENCE SMITH: Wolinsky is in the process of drawing up guidelines to help the editorial staff deal with the business side and still maintain its independence.
LEO WOLINSKY: With the absence of any kind of rules, people are doing the wrong thing, and when you're specifically trying to obliterate years of tradition and trying to do things in a new way, it's hard to know where you're going. And I think that was the problem.
TERENCE SMITH: But Henry Weinstein says it will be a long road to repairing the rift that has opened within the Times staff.
HENRY WEINSTEIN: We have to come up with a good set of standards, and those are standards that the people that are in the newsroom can live with comfortably and feel that they're able to operate in a credible and ethical manner.
TERENCE SMITH: Ben Bagdikian says the Times is struggling with a built-in conflict that is increasingly common in American newspapers.
BEN BAGDIKIAN: The news media are a part of great empires which sell stock to the public. Wall Street likes what's happening. Since Mark Willes became the publisher and president, chair of the board, L.A. Times stock has almost tripled in value. And so the stockholders like that, and on a financial basis, he has been extremely successful. But a newspaper can't live by stock certificates. It has to live by its readers, and if you begin losing the confidence of your readers in this very tough newspaper world these days, you have lost something which, in the long run, the papers that preserve their quality have survived.
TERENCE SMITH: For the Los Angeles Times and many other American newspapers, that's the riddle: How to be profitable and credible at the same time.
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