- Some highlights from this interview
- Why he still believes the purchase of Times Mirror was a good deal for Tribune
- The Times' future online
- The challenges of newspaper ownership
Hiller was one of the architects of the Tribune Company's purchase of Times Mirror. He was brought in to replace former Los Angeles Times publisher Jeff Johnson after Johnson publicly backed then-Editor Dean Baquet's opposition to staff cuts ordered by the Tribune Company. This is the edited transcript of an interview conducted on Nov. 21, 2006. [Update - 4/3/07: Billionaire businessman Sam Zell reached agreement to buy the Tribune Company in a deal valued at roughly $13 billion.]
Editor's note: Read FRONTLINE's response to a critique from the Los Angeles Times.
Update -- Jan. 25, 2008: After clashing with Hiller over further budget cuts, James O'Shea became the third Times editor to leave since 2005. Read O'Shea's farewell memo to the newsroom.
Update -- July 14, 2008: On the same day that the paper began layoffs of 250 employees, the Times announced Hiller's resignation. However in a note to the staff, Hiller suggested the resignation was not his idea. Referring to Tribune Chairman and CEO Sam Zell, Hiller wrote, "Sam's the boss and he gets to pick his own quarterback." An article in the Times called the paper's performance under Hiller's tenure "particularly disappointing" and described the publisher as having a reputation among Tribune executives as "an indecisive leader."
You were present at the creation of the merger?
I was. You won't find everybody defending the combination at this time. I'm actually one of the people who still think it was the right thing to do, smart strategically. There are a lot of things that happened after the merger that nobody at the time predicted, including huge recession, terrorist attack, bumps along the way. But the core vision of what you could do by putting these great newspapers together was smart then, and I think it's smart now. …
Some people said it was a terrible deal; how could they have done it?
... If the market knew it at the time, it did a pretty good job of keeping that a secret, because in fact, after the initial market reaction, within a day or two of that transaction, the combined stock was trading at or above where it was before the merger, which is an unusually favorable reaction for a combination of that size. So I think the market liked it at the time.
I think in hindsight -- and hindsight, we all know what hindsight is -- that a number of things have happened that have resulted in -- some of the benefits that had been anticipated from the merger didn't come about.
... Back in around 2000, there was a lot of belief that being able to offer advertisers marketing solutions that crossed multiple media was going to be a very big thing. Well, it turned out it's very helpful to some advertisers but not to everybody. So, on balance, that's one of the areas where the benefits turned out to be more modest than people thought they were going to be.
Did you not count on the impact of the Internet on advertising?
Yeah. We certainly knew there was going to be a big impact. In fact, part of the benefit that we were setting out to achieve by doing the combination was to get enough scale in the business that we could do good things on the Internet, including -- I mentioned building networks like we've done in the classified advertising business for CareerBuilder and HelpWanted and Cars.com, for the automotive.
“I think one of the biggest disservices that's been done is converting this debate over the future of newspapers into a simple-minded, cuts-versus-no-cuts debate.”
You may remember at the time of the merger, people were beginning to write off newspapers in terms of the position they played in classifieds. Monster had come in and was the new 800-pound gorilla, and people said, well, newspapers were through. Well, guess what? We put together CareerBuilder, investing significant amounts of money to do it, and built a business that's now beating Monster. ...
The Times was in the middle of an ethical crisis. It went [on] to win 13 Pulitzer Prizes. ...
Yes, 13 since 2000.
You must have been proud.
We are. I am. It was success like few newspapers have ever seen.
What's gone wrong?
Well, I'm not one of the ones who believes that a lot has gone wrong with it, so you may have to talk to others. I know we've got challenges in our business, and the challenge is mostly, how do newspapers change to stay relevant to consumers and advertisers in the Internet age? And because -- it may seem a cliché, but some clichés are true -- the Internet changes a lot, as do other [technologies] -- the explosion of cable TV choices, wireless technology, iPods -- the fact is, there are so many ways that consumers and online users can find news and information that the old ways of doing things just aren't going to cut it, and you have to find ways to change in order that consumers want to continue to come to us as a newspaper, to us as a Web site.
If we don't figure out how to change, we're going to get left behind. So ultimately the issue for newspapers is, how do you change, and how do you change fast enough to stay indispensable to your readers and users so they come to you every day rather than to Google, rather than to Yahoo!, rather than to some wireless service? Newspapers have got to do a much better job of that to be successful. …
You must have heard that you needed to cut costs, jobs. The editors back in 2004 were resisting.
Yeah. I think one of the biggest disservices that's been done is converting this debate over the future of newspapers into a simple-minded, cuts-versus-no-cuts debate. I know that's how it got portrayed in the press, including in the pages of newspapers, including our own paper. But that makes it a way too narrow issue. The issue isn't about jobs and cuts. That's focused on the wrong thing. The issue is readers, audience, users. Those are the numbers that you've got to be focused on. Are we growing? Are we staying important to our readers and users?
Now, along the way, as we change, we're going to have to reallocate resources; we're going to have to cut in some areas; we're going to have to add in other areas. But to get dug in and make this huge issue of the future of newspaper just portrayed as something about the numbers of jobs in the newsroom is a really unfortunate oversimplification. …
It's a good business. What's the financial problem? Why are people being laid off, bought out? Fifty to 75 more reporters next year?
Yeah. On that one, we haven't said or planned or decided any number of buyouts or layoffs for next year. Let me address your bigger question. The issue for the whole newspaper industry -- not just the Los Angeles Times -- is, what's the financial trajectory of the business over time? At the present time, here in Los Angeles, we have a lot of revenue, and there is a lot of cash flow, but the question is, is it getting bigger, or is it getting smaller? That's plainly the concern that the investors have and why Wall Street is being so harsh on newspaper companies at the present time.
Our stock. But all -- Knight Ridder's stock until they were sold, New York Times stock, today, [McClatchy's stock]. The question is not about how you are doing today; the question is, how are you going to be doing in the future? …
[Is it] because of the stock price that these layoffs took place?
No. The stock price is a reflection of what the markets think about the future prospects of the business. So the stock price is saying that we don't think the newspapers are growing or that we don't think the newspapers are adapting to the Internet or that we don't think the newspapers are doing the right thing to attract more readers. You don't change the stock price directly. What we've got to change is how are we doing as newspapers in attracting more readers, in doing more on the Web, and so that we do have the growth that somebody, whether it's Wall Street or anybody, is going to recognize and reward us for. …
Are you beginning to cut into the ability of the Times to compete by cutting jobs?
Yeah. Well, I don't want to sugarcoat it. At some point, you do need to deal with the issue of resources, and I'm glad that [former L.A. Times editor] John Carroll -- who's another friend of mine -- I'm glad that John framed it as not cuts versus no cuts, but it's the issue of how many resources, where are they deployed, how much on the Web, how much in print. That's a legitimate and right discussion to have. But the way not to have that discussion is to get dug in and dig in one's heels and say: "Here's a bright line in the sand. One more job and we're going to heck in a handbasket, and the age of good journalism is over." …
But [former Times publisher Jeff] Johnson says you can't cut your way into the future. Maybe redeployment is what you need to do, not announcing layoffs? You're going to lose quality people.
It's certainly the case that you can't cut forever and feel that that's a successful surgery for taking it into the future. It can't be. I don't suggest that it is; I'm not aware that anybody in the rest of the company is suggesting that it is. I do understand there was a difference of opinion about a particular line in the sand about whether any more cuts on a certain level were acceptable or weren't acceptable. Frankly, I was disappointed that the conversation turned in a way where people dug in their heels on that, but people get to make their own decisions.
I prefer to look at it in the broader context of, we've got an entire business we need to reinvent, to figure out how to do a great job for readers and users. Along the way we need to stay a financially healthy business, and we need to manage on both of those fronts. And that's what I came out here to do.
[Editor's Note: On April 23, 2007, the Times announced plans to reduce its staff by 100 to 150 employees, or 3 to 5 percent of the workforce, through attrition, buyouts and layoffs. The memo from Hiller also said that plans were in the works to add positions to the Times interactive team.]
You've known Mr. Johnson for a long time?
You respect him?
A very fine guy.
He drew a line in the sand.
Yes, he did.
And it became public.
On the pages of your own newspaper.
On the pages of every newspaper in the United States. ...
Did he drink Kool-Aid, or what happened?
I don't know, and I can't speak for Jeff. He's a fine person and a very good friend. I think ultimately people who are leading a business have to share the vision, have to have a vision, and if it's a different one from the people who are the owners of the company, that's not going to work for the long term. ...
It's pretty unusual to have a publisher step out in public --
Yeah. Although I think a lot of us have said similar things, because it's true. Cuts are not a strategy, just like --
But he lost his job.
Well -- and again, I'm not sure I can add too much to all the ink that's been spilled on the past. I try to think more about how we take the business forward. But ultimately people have to people able to lead, change in a positive way, and if they get stuck in the past or dig in your heels on a particular point about how the business is going to be taken forward, that's not a way to lead.
The concern is that these cuts will cut into the quality journalism that got you those Pulitzer Prizes.
Well, that's certainly a risk, and that's certainly what you want to avoid. You don't want to diminish the journalism. You don't want to take things away from readers. What you're trying to do is build up readers and build up online users and do it as smartly as you can. But the other thing you've got to do is be realistic about where the business is headed and where advertisers are going. So it's a balance between maintaining a healthy business and being sure that you're delivering really outstanding journalism for your readers and users. ...
People say the cuts will cut into the quality of the paper, and the transition to the Web will be impossible.
Let me say this, and with all due respect, but just listening to you and your questions -- which every one seems to be focused on cuts -- illustrates to me the problem of this whole discussion. [It's] that people are trying to turn what should be a very robust conversation about change in the media business to deal with the future into this "cuts versus no cuts." Like, "less filling, tastes great," great sound bites, but not very useful, with all due respect; not very useful in thinking about how we take this business forward.
People are saying, why did the Tribune not invest more in the Internet operation at the Times? ... Why didn't you have more Latino reporters if you wanted to get into the Latino community?
We certainly should be doing that. But let me take you up on the point about the Internet. How much would you guess the Tribune Company, including for the Los Angeles Times, has invested in the Internet?
I understand lots of money. ...
Hundreds of millions of dollars, including for the benefit of the Los Angeles Times. I am the first to agree, I think we need to do a ton more with the Internet and the Web site. I actually like our Web site, but there are things we can do. There's so much that we can do. ...
So you're going to be redeploying resources into your Web site?
Is the money you're saving by doing layoffs or buyouts going to go into the Web site?
Well, I haven't done any buyouts or layoffs, but we are -- I think we're going to be moving people; I think we'll be moving dollars. Also, what we need to do -- and this gets a little lost sometimes -- is we need to retool basically everything we do in the newspaper so that it works for the Web as well as for print. ...
One of the biggest things we're going to be doing is basically transforming our print newsroom so that it's across every desk, producing news, information and content that can be used across print, online, wireless, video, you name it. We were behind on that. That's another area where I think over the last several years we could have been doing more. That's a more interesting and fruitful focus than this issue of, if you pardon my going back to this, this [canard] of cuts versus no cuts. …
But Mr. Carroll has said it's not just an issue of cuts; that he wasn't given the resources he needed.
I think John's selling himself way too short. He had command of all the troops in the newsroom. If there was stuff that could have been done, I'd ask John why it wasn't done. Why wasn't it done? And don't tell me it was because he didn't have the money. He had the biggest newsroom in the -- short of The New York Times. Whatever he did or didn't do with it was something that was entirely within John's hands. …
You're saying that Jeff Johnson and John Carroll, and later [former L.A. Times Editor] Dean Baquet, had the ability to take resources and rebuild the Web site, do many of the things that you want to do, but they chose not to?
I don't know. I wasn't here. You'd have to ask them. All I know is they had an enormous amount of resources in the Los Angeles Times. I've got an enormous amount of resources in the Los Angeles Times with my colleagues here. That's what we're going to be doing. We're reallocating; we're rebuilding; we're growing the Web site. It can be done, but you've got to be focused on doing those things that make the changes to take you forward. …
When you say Dean Baquet was unwilling to do the kinds of things that need to be done, and he says that he was unwilling to preside over the destruction of what has been a great newspaper --
Yes, well, history will judge how we do. I'm convinced that we're going to take the newspaper forward and the Web sites forward, and at the end of the day people are going to say, "These great people of the Los Angeles Times did a superb job navigating the newspaper business into the future." That's what we want them to say at the end of the day. …
What will it look like when you finish your redeployment of resources and cuts?
The vision at the bottom is, people are going to say, well beyond our 125th birthday this year, that the Los Angeles Times and its Web sites and its related products are the best, most important source of news and information I get in and around and about Southern California; that they're going to say, the greatest days are still here and ahead of us; that it does a wonderful job of bringing together this sprawling, diverse set of communities that is Los Angeles …
I think print is probably going to be a smaller part of it. I know the Web is going to be a much bigger part of it. There may well be other products in the marketplace, including products that do a better job than we're currently doing addressing the Latino community. I think [Hoy, Tribune's Spanish-language daily paper], is going to be a major presence for the Spanish-speaking Latino audience in the community. There may be additional print products like we've done with The Envelope that addresses the entertainment news; Calendar, which is what to do, where to go, plan-your-life thing. ...
I'd like to hear about your Web plans. ...
We've learned a lot. We're 10 years into the Web, so we see a lot of what works and what people like to do, and we've got a great opportunity to blend the best of what newspapers do with the best of what the Web does. So in all sorts of areas of our coverage, whether foreign, national, local, we have the opportunity basically to host on the Web a sort of edited conversation, if you will, where we take what we do best in terms of content and use that as the basis for communities of interest focused on all these different areas.
Think of it as a marriage of the best of the Los Angeles Times with the best of MySpace; that you'll get community and interaction and chat and conversation, but it's sustained and directed and built up, if you will, off really great, edited content and reporting from the Los Angeles Times.
So you'll see that, for example, people are very interested in all the great critics and commentary we have in the area of entertainment and what's going on and movies and the entertainment business, as well as locally where to go, what to do, those sorts of things. That can then be the basis of both content that's interesting and draws people in on the Web as well as the foundation for a great, spirited community conversation online among all of the users. So you get a combination of great L.A. Times content and user-generated content, and it becomes the gathering place in cyberspace for people who want to know and do anything related to Southern California. ...
Does it mean the Times won't be competing with The Wall Street Journal, etc., on every major story?
Oh, I think on the major stories, particularly the ones of most salience here -- for example, this is the entertainment capital of the world, so we need to own entertainment, and we'll do entertainment better than anybody. We do it now, and we'll continue to.
We're going to continue to have a major foreign reporting coverage. We're one of the best at it currently. But one of the things we may emphasize, for example, is the unique role that Los Angeles has as the gateway to the Pacific Rim. That's a part of the story that's different here for the West Coast and for Los Angeles than, say, it might be for an East Coast paper.
But you know the concern: The Times has bureaus all over the world. It's one of the few papers that gathers information that way.
Yeah. My plan and expectation is that being a world-class provider of foreign and national news is going to continue to be one of the hallmarks of the L.A. Times.
But with fewer people?
Well, I don't know whether it's going to be with fewer people or not. There you go again, to say being focused on the numbers of people and not on the quality of the coverage.
But who does coverage? I mean, people do coverage.
Well, people do coverage. Yeah, people do coverage.
So that's why the focus is on how many reporters do you have working a particular story. ...
Yeah. Well, you said it well. My priority wouldn't be to have as many people as I can. My priority would be to do the best possible job for our readers and online users in foreign and national, and we're going to continue to do that. …
You don't see cutting back on the international bureaus in the coming years?
Well, we're not giving up any commitment to our foreign and national news, which is very, very important to our coverage. I don't have a specific view on levels or locations of bureaus or levels of personnel after the six weeks or so that I've been here. ...
There has been emphasis on turning this into a more local-coverage paper, less focus on international.
It may be too early to say. One thing I do know is that connecting with the audience in Southern California, which we do well in a lot of ways, but in being first and foremost indispensable for the people of our community, is job number one. Part of that I continue to believe is doing great foreign and intentional reporting, particularly in a market where so many of our communities -- our ethnic communities, first-, second-generation immigrants -- so to some extent, the whole distinction between foreign and local, world and local breaks down in a community as diverse and cosmopolitan as Los Angeles. ...
[Billionaire philanthropist Eli Broad] has gone on to make a bid with others for the whole Tribune Company. That's pretty unusual, for editors to be talking to people in the community about buying the paper?
It's highly unusual and I think out of line.
Why do you think it happened?
You'd have to ask John.
Do you think Eli Broad is going to be one of the owners of the L.A. Times?
I don't know. I do know what I read in the newspapers. Because of the terrific Los Angeles Times and some of the other great newspapers and TV stations within Tribune Company, there is a lot of interest in this business. This, in my humble opinion, is the finest set of media assets under any roof anywhere in the country.
The bids have been low.
Well, I don't know what's low. They've been at or above current market, and the current market already has gone up in anticipation that there would be some transaction. So from my standpoint, the market is validating significant value in these assets.
Are you going to be here next year?
I hope so.
You think so?
I think so.
You don't think Tribune will sell the Times?
It's hard to handicap the odds of any particular transaction. My own view is, there's a lot of benefit in having the great Los Angeles Times, the Chicago Tribune and some of our other papers together, so my hope is that transaction keeps the benefit of holding those together. ...
I'm personally open and agnostic. If you look at the history of the business, there have been great individual owners, local owners; there have been some terrible ones. There have been good corporate newspaper group owners, and there have been bad ones. It's all about how you do and what you're committed to and what your mission is. We'll just have to see.
What I do believe is that the Los Angeles Times can continue to be a great newspaper under any ownership arrangement.
Eli Broad tells us he's willing to accept 5 to 8 percent profit. Why isn't the Tribune Company?
As a public company, one answer would be the stock price would go way below where it's currently going, which is way below where it used to be. What I think you're seeing is, at least in the current state of things, the public stock markets aren't very hospitable places for media companies generally, including newspapers. So a private owner like Mr. Broad would be able to say, "I'll earn X percent." If he's the owner, he gets to say that. If Wall Street is the owner, they get to say what their expectations are for what a publicly owned business is expected to achieve. As brutal as it may seem, that's kind of a fact of life of the business world. It's not unique to newspapers or media companies; it's true of all businesses in the United States.
If you're organized as a business with owners who are expecting a profit, that's what you get, and you've got to try to deliver or find some owner who's got different expectations. At the end of the day, we'll see who was the owner and what their expectations are.
When Mr. Broad says Wall Street is the enemy, he's right?
Well, I don't think so. It's certainly the case that Wall Street and for-profit owners of papers have expectations about how the business will be run that may be different from how Dean would run them; it may be different from how Mr. Broad would run them, and to that extent they may disagree, and that's fine. But ultimately the owners get to decide. My hope is that we end up with an owner who is going to likely be a business interest so this is not a not-for-profit. This is not charity work, so we're going to have to figure a way into the future to run the newspaper as a business. But we also have an owner who has the same commitment to the quality journalism and civic mission that we've had at the Los Angeles Times for 125 years. If we get that kind of owner, we're going to be fine.
But there are nonprofit ownership situations.
All we need then is a not-for-profit who wants to spend $14 billion to buy the Tribune Company, and then you'd be all set. So if you know one of those, have them call me.
How much for the L.A. Times?
I can't answer that. I don't know. It would be a lot.
Of the $14 billion?
Want to guess?
Three to four [billion].
Three to four billion dollars, for Mr. Broad, etc.?
I don't know. I'm only guessing. …
Have Google, Yahoo! transformed the news industry?
Well, they have to some extent. I think one of the --
Should they buy the L.A. Times?
They could stand in line. There's a lot of interest. I do think of the places where newspapers as an industry haven't played our cards right is letting all our content get out for free on the Internet and get reaggregated by Google and Yahoo! and present their own Google News and Yahoo! News, the core of which is all the news that we've produced. I bet they can't believe their good fortune that newspapers have let that happen.
One of the things where we can continue to make some progress is to retake that role as an aggregator of news, and that newspapers working together and doing those things and creating sites and aggregations of the news that we and only we produce is a way to take back some of that value from Google and Yahoo!.
But Tribune companies belong to the [Associated Press], and you sell to Yahoo!.
Yeah, I think that's a mistake.
Google says what they do is fair use and they drive people to your site.
Well, some of that is. You do get into some distinctions that may sound legal. I think some of what they do is both fair use, where they use headlines and maybe a couple of lines -- and [like] Google does -- drive people to the newspaper Web sites. I think that's good and healthy and beneficial to newspapers. Where I think you go off the track is some of what the AP is doing, which is basically selling whole stories, summaries, basically giving the whole kit and caboodle to Yahoo! and letting Yahoo! build the audience and get the advertising revenue from it. I think that's a mistake.
I understand that some members of the board are starting to object.
Sure. Yes, and should, and I think it ought to be changed.
Mr. Broad said he would force them to pay for their content.
Well, then Mr. Broad and I see eye to eye on something.
Except he says he'd rehire Dean Baquet. ...
Well, the question would be, is he going to rehire Jeff Johnson, I guess, isn't it?