Let the Los Angeles Times Live
The past 15 years would have been really tough for the Los Angeles Times no matter what. It is the country’s biggest metropolitan newspaper in an era when most of the economic underpinnings of metropolitan newspapering have collapsed.
Still, one can’t help but wonder what might have happened if the Tribune Co., owner of the Chicago Tribune, several other big-city newspapers and a bunch of television stations, hadn’t bought Times Mirror, the LA Times’ parent, in 2000. For the Times, Tribune ownership has been one disaster after the other -- with another debacle in the works this month. More on that in a minute, but first, a brief accounting of the dysfunctional Tribune-Times relationship:
The Great Newspaper Advertising Collapse was still in the future when Tribune bought Times Mirror for $8.3 billion, and the combined company was able to make some national advertising gains at first. But it was loaded with debt from the merger and when it foundered in the weak economy of the early 2000s the Chicago-based management team began hacking away at the newspapers, especially the Times, which they saw as extravagantly overstaffed. Three Times editors in succession (the middle one was Dean Baquet, now the top editor at the New York Times) stormed out in protest over the cuts imposed by Chicago. Also, three Los Angeles billionaires -- the tag team of Eli Broad and Ron Burkle and solo act David Geffen -- expressed interest in buying the paper from Tribune and restoring some of its grandeur.
The Chicago crowd opted instead to sell the whole company to vulture investor Sam Zell in 2007 for $8.2 billion. Zell made the purchase almost entirely with borrowed money, so the subsequent confluence of the worst recession in 75 years and a secular shift away from newspaper advertising probably would have pushed Tribune into bankruptcy in any case. But Zell’s strange decision to put several chuckleheads (read the late, great David Carr’s classic 2010 account and tell me that’s not the right word) in charge didn’t help.
Tribune emerged from bankruptcy in 2012, and almost immediately set to work cordoning off its still-declining newspapers from its comparatively healthy TV-station business. At one point the billionaire Koch brothers reportedly considered taking the newspapers off of Tribune’s hands, but nothing came of that and the breakup of Tribune Media and Tribune Publishing was completed last summer. Since then Tribune Publishing’s stock price has declined from $25.50 to $10.35. For whatever it’s worth, Tribune Media’s stock hasn’t done any better since the split, although its $3.6 billion market capitalization dwarfs Tribune Publishing’s $277 million.
Meanwhile, things had been getting interesting in Los Angeles. Back in 2008, Zell had recruited Eddy Hartenstein, the former chief executive officer of DirectTV and not at all a chucklehead, to be the Times’ publisher. During the subsequent hard times, Hartenstein’s job seems to have consisted mostly of triage (the Times now has about 500 editorial staffers, down from 1,200 in 2000). Still, he appears to have protected the paper to some extent, and when he prepared to move on last year to become nonexecutive chairman of Tribune Publishing he handpicked a really surprising replacement.
That was Austin Beutner, a co-founder of the investment banking firm Evercore who, after breaking his neck in a bicycle fall in 2007, had decided to devote himself to Los Angeles civic affairs. Beutner was appointed first deputy mayor in 2010, and began running for mayor himself in 2012 before dropping out (he was getting nowhere in the polls). Then he teamed up with Broad, the co-founder of KB Homes, longtime CEO of SunAmerica and noted cultural benefactor, to make yet another offer to buy the LA Times, this time with a plan to turn it into a nonprofit.
Tribune turned them down but, at Hartenstein’s urging, Beutner ended up as publisher of the LA Times anyway. By all accounts it was an eventful tenure. Variety’s James Rainey offers this summary:
To the Chicago-based newspaper publisher, Beutner was a renegade who failed to bolster Times revenues and seemed to be using the newspaper for his personal political ambitions. To Beutner allies inside and outside of the newspaper, the ankled publisher was trying to protect and build the West’s most important news outlet with initiatives that proved too bold and independent for his fusty Midwest minders.
Yes, he really called Beutner “the ankled publisher.” Variety is so awesome! The person who did the ankling was Tribune Publishing CEO Jack Griffin, perhaps best known for being ankled himself in 2011 after less than six months in charge of magazine publisher Time Inc. Now Timothy Ryan, a Tribune veteran most recently at the Baltimore Sun, is publisher of the Times, and Poynter’s James Warren (a former managing editor of the Chicago Tribune who resigned after the Zell takeover) reports that he plans to cut about $10 million from the Times’ editorial budget and ankle another 80 staffers.
LA civic leaders are up in arms about all this ankling. The county board of supervisors voted unanimously Tuesday to urge Tribune Publishing to "restore local, established and invested leadership" at the Times. Meanwhile, media analyst Ken Doctor reports that Eli Broad had approached Hartenstein in August to again express interest in buying the paper. According to Doctor, Broad was encouraged by Hartenstein’s response, but then was told after last week’s Tribune board meeting that the full board wouldn’t consider an offer because the tax consequences would be too great. It’s a board’s duty to “obtain the highest value reasonably attainable,” Doctor argues, but Tribune’s board never even asked Broad how much he might be willing to pay. Now a public battle is in the offing, pitting prominent Angelenos against the owner of their city’s newspaper. And it’s hard not to root for the Angelenos.
A little dirty laundry: Nine years ago, just as the newspaper advertising freefall was beginning, I wrote a column arguing that wealthy individuals weren’t better owners for newspapers than publicly traded companies. At the time Wendy McCaw, ex-wife of cellular pioneer Craig McCaw, was making a mess of the Santa Barbara News-Press, which she had bought a few years before from the New York Times Co. Meanwhile, I argued, the plummeting share prices for newspaper companies were perhaps less evidence of Wall Street’s myopia than a signal that “newspapers' classified ad business is about to disappear into the maw of Craigslist.”
Wall Street and I were right about newspaper ads disappearing into a maw, although it wasn’t just Craigslist’s. But I was clearly wrong to conclude that public ownership was better for newspapers than private. Metropolitan newspapers, as opposed to national and global operations such as the New York Times and the Financial Times that face different economics and better prospects, are in a parlous state no matter their ownership form. It does seem like the most hopeful signs these days, though, are coming from papers owned by a seemingly benevolent billionaire -- Jeff Bezos at the Washington Post, John Henry at the Boston Globe and Glen Taylor at the Minneapolis Star-Tribune -- or by a nonprofit -- the Poynter Institute for Media Studies at the Tampa Bay Times. These experiments may end in failure and tears and hundreds of millions in red ink, but they offer at least the hope of progress and success, and a lot of journalists and readers are profiting in the meantime.
For the owners of the rest of the country’s metropolitan newspapers, the main focus for years now has been on cutting costs and managing decline in hopes that the decline stops -- or maybe a buyer comes along -- before revenues have irrevocably dropped below fixed costs. At Tribune Publishing, the strategy seems to be based on consolidating the operations of its 10 daily newspapers and many smaller publications, especially online. There’s logic in that, but it is still a strategy for managing decline, and it inevitably diminishes the ability of the biggest of those entities, the LA Times, to forge an identity and find its own path into the future. Without the Times, of course, Tribune’s plans would seem to stand even less chance of success. But a big pile of cash from Eli Broad might at least help.
So come on, Tribune Publishing board! Listen to what the guy has to say. It’s not as if you folks have had any real ideas for the past 15 years of what to do with the Los Angeles Times.
OK, I’ll stop it with the ankling now.
I would credit his publication but it’s hard to tell whether I should call it Politico Media or Capital New York.
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