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trouble at the <i>los angeles times</i>

A closer look at the turmoil and uncertain future of one of America's great newspapers.

The saga of the Los Angeles Times has become emblematic of the difficulties facing many daily newspapers. Some prominent Los Angelinos have submitted bids to buy the paper. Meanwhile, media watchers have been waiting to see how the paper will address key issues facing the Times and the industry in general: how far to go in focusing on local coverage, how to establish a successful online presence, and whether private ownership might relieve papers from the financial pressures of Wall Street. [Update - 4/3/07: Billionaire real estate businessman Sam Zell reached agreement to buy the Tribune Company in a deal valued at roughly $13 billion.]

The ups and downs of the Times have been well documented: the 2000 purchase of the paper and other holdings of Times Mirror, by the Tribune Company; the paper's Pulitzer-winning resurgence led by Editor John Carroll and his successor, Dean Baquet; and the years of staff cuts mandated by the new owners. Ken Auletta profiled the paper's travails in the Oct. 10, 2005, issue of The New Yorker. By then, Carroll had left, and a little more than a year later, Baquet was also out, along with publisher Jeff Johnson.

Both Baquet and Johnson had taken their feud with the Tribune Company public in the pages of the paper. On Sept. 19, 2006, they were joined by 20 prominent Los Angelinos, including former Secretary of State Warren Christopher, who together wrote a letter to Tribune CEO Dennis Fitzsimmons urging the Tribune Company to "continue to keep the Los Angeles Times a vibrant paper of local, state and national interest." The letter, and Fitzsimmons' reply, were printed on the Times editorial page. Fitzsimmons defended the Tribune Company's ownership of the paper but argued that "great newspapers must constantly evolve based on changes in the media environment and the communities they serve."

One of the pressures facing the paper was to go more local. But can the Times evolve to significantly expand its local reporting while continuing to be one of the few U.S. newspapers that cover national and international stories? Metropolitan Los Angeles, a vast area with a great mix of cultures, is a challenge to cover. "The paper's circulation area spans a territory the size of Ohio, over five counties and 88 cities and through a veritable United Nations of neighborhoods -- Iranians next to Koreans near Armenians close to Thais across the county from Vietnamese abutting African Americans near Jews surrounded by Hispanics of all nationalities and political stripes," writes John Pomfret of The Washington Post's L.A. bureau.

Over the past decade, the Post became an industry leader in expanding coverage of the local community. It hired a young tech wizard, Rob Curley, to implement "hyperlocal" coverage by exploiting new media. For the Los Angeles Times, however, the Internet is yet another challenge. While Fitzsimmons last year defended his company's management of the paper, touting "significant expansion of the staff of latimes.com" and citing research showing online traffic was growing, a leaked internal report, written three months after his editorial, undercuts his optimism. Written by the Spring Street Project, a committee of Times reporters convened by Dean Baquet before his departure, the study called latimes.com "virtually invisible in greater Los Angeles."

The reporters found that the Times' Web site "is losing traction even faster than the newspaper." The site's staff of 18 is dwarfed by the Web teams at The New York Times and The Washington Post, two of the most successful newspaper sites. "To put it bluntly," said the report, "as a news organization, we are not web-savvy. If anything, we are web-stupid."

The report directs much of its criticism at the Tribune Company, which it said tried to impose centralized Web solutions on the Times and its other newspapers. Vernon Loeb, a Times investigative editor and a member of the Spring Street Project, told FRONTLINE, "At this point we're owned by a company that seems to have no vision, no sense of imagination for what we could become and no real commitment to preserving what we are."

That sentiment is shared by many Los Angelinos and led billionaire housing developer Eli Broad and supermarket magnate Ron Burkle to bid on the Tribune Company in order to restore local ownership to the Times. Broad told FRONTLINE, "I think a newspaper is really in many ways the soul of this city, the soul of the community, and I think with local ownership, a better job can be done."

Private, local ownership is viewed by some as a promising solution -- "a real prescription for the industry," says Merrill Lynch analyst Lauren Rich Fine. "Either the people running these companies have to have the conviction to take themselves private, or the industry has to go back to its original roots, which is being owned locally by somebody who isn't just focused on profit margins but really wants that newspaper to stand for all things good."

But not everyone is convinced. "The track record of the filthy rich who acquire newspapers as playthings or as business propositions is not good," writes Slate media critic Jack Shafer. Vanity Fair writer Michael Wolff compared billionaires' recent interest in newspapers to owning a professional sports franchise: "Rich men buy sports teams as a personal expression of boosterism, and civic engagement, and personal fun. What's more, they believe they can increase the value of these teams -- and they often do -- by their own energy and public face. They become the No. 1 fan. Likewise, these guys undoubtedly see themselves as cheerleaders of the news."

The Times need only look at its own history under the Chandler family to see the advantages, as well as uncertainties, of private ownership. Founded by the family in the 1880s, the Times had long been known for promoting the burgeoning city of Los Angeles -- and the Chandler family's real estate interests there -- rather than stellar journalism.

"My grandfather and my great-grandfather really weren't trained as journalists," Harry Chandler son of legendary Times publisher Otis Chandler, told FRONTLINE. "They were trained as businessmen who thought their view of Los Angeles was sort of the downtown Republican clubs and serve that contingency well, and you've got a good newspaper."

It was Harry's father Otis, publisher from 1960 to 1980, who transformed the paper into one of best in the country. "At a young age, he took it over, started making changes," Harry said. "Started reinvesting, took the editorial team up by a magnitude of three or four, made sure that the paper was covering all sides of the issues, and suddenly said, 'I don't want to just be a good regional paper. I want to be as good The New York Times. And over 20 years he really got almost all the way there."

The Times did well through the 1980s, as did its parent company, Times Mirror, which owned The Baltimore Sun and Newsday, among other papers and magazines. But an economic downturn in Southern California in the early 1990s, combined with infighting among the Chandlers led to disarray at the paper. In 1995, the Chandlers cleaned house and brought in former General Mills executive Mark Willes to improve the company's financial performance.

But Willes' attention to the bottom line was controversial. In 1999, he broke the firewall between the paper's editorial and advertising departments, cutting a deal, without telling the newsroom, in which the Times would share revenues from a special advertising section with the Staples Center. The scandal contributed to the Chandler family's decision to sell Times Mirror to the Tribune Company in March 2000.

But nearly seven years later, with its stock price dipping and shareholders in revolt, the Tribune Company effectively put itself up for sale and is considering offers. Whether the Times will have new ownership, and whether a new owner can improve the paper's local coverage and its online presence, remains to be seen. The Times' current editor, Jim O'Shea, thinks the Times can do it all: improve local coverage, continue to cover major stories and capitalize on the Internet. He has already announced a major Web initiative.

Update -- April 25, 2007: On April 2, 2007, the Tribune Company accepted Chicago real estate billionaire Sam Zell's $8.2 billion takeover bid, over a matching offer by Burkle and Broad. And on April 23, 2007, the Times announced plans to reduce its staff by 100 to 150 employees -- 3 to 5 percent of the workforce -- through attrition, buyouts and layoffs. The memo from Publisher David Hiller also said that plans were in the works to add positions to the Times interactive team.

Update -- Jan. 25, 2008: After clashing with Publisher David Hiller over further budget cuts, 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."

 

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posted feb. 27, 2007; updated july 15, 2008

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