Two Lessons From Tribune’s Actions In Los Angeles -- If There Is A Corporate Debate About Firing Reporters Then Keep It In-House And If It Comes Down To Editorial Quality Or Increasing Margins Then Margins Win

Philip M. Stone November 8, 2006

Tribune ended up doing what few thought it would actually do – it fired its Los Angeles Times publisher last month and its editor this week for not only refusing to come up with further cost cutting (translation: more job losses) but for their going public that they refused. Corporate America has shown that while there can always be debate on policy, you don’t wash your laundry in public, and if you do then you pay the consequences -- a lesson that won’t be lost on others.
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Editor Dean Baquet told a crowded newsroom Tuesday that he was leaving on Friday.  His departure comes a month after Publisher Jeffrey Johnson was bounced and replaced by Chicago Tribune publisher David Hiller. Some thought that Baquet would fall on his sword in support of Johnson but to their chagrin that didn’t happen, and Hiller, on his first day in Los Angeles, said after taking coffee with Baquet that he thought they would be able to work together.

Now he's gone, too

But Baquet still found it difficult to keep his mouth shut. Perhaps believing that Tribune would not take the risk of firing him, too, if he continued to defy corporate’s demand for more cost savings he then rubbed salt in the wound by going on the road giving speeches and interviews urging  other editors to show the same defiance. 

Addressing the Associated Press’ Managing Editors meeting in his hometown of New Orleans two weeks ago Baquet said, “ Sometimes when I sit down with editors and managing editors, I find them all too willing to buy the argument for cuts. We need to be a feistier bunch.”

The word in Los Angeles is that Tribune management were not impressed with Baquet’s continued public pronouncements encouraging rebellion against management, and the company came to the conclusion the situation could not continue, no matter what might be the newsroom fallout, or the fallout in the community.

Baquet told his own newspaper, “I like to think that, no matter what happens from here on in, that I helped create a full-bodied debate about cuts in newsrooms and the impact that has on covering the news. And I think that is important.”

Baquet and Hiller both addressed staff in the newsroom. Hiller said that he and Baquet had come to an impasse. “I can’t sugarcoat it. Part of it was a discussion of staffing. But I don’t think that is what all of this is about. This is about the future of our industry and whether we have one and whether it’s a good one.”

Baquet took over as editor when his predecessor, John S. Carroll, quit in July, 2005, in protest over newsroom cuts of some 260 over a five-year period. It was thought then that Baquet, Carroll’s number 2, would also quit in sympathy but he elected to take the top spot, supposedly winning some concessions that there would be no further newsroom cuts.

But that did not take into account that woes in the newspaper industry would continue as they have. The Times is suffering because the Tribune Company is in turmoil. Shareholders are unhappy that the share price has languished and the company embarked on a $2 billion highly leveraged share buyback scheme in the summer that needs, in order to handle the junk debt payments, high earnings from the broadcast and newspaper division, sale of about $500 million in assets, and more cost-cutting.

The Times’ newsroom believes that Tribune wants another 100 editorial jobs gone, if not this year then early next year. What is difficult for staffers to understand is why they are being asked for more sacrifice when the newspaper is producing around a 25% margin – the Chicago Tribune is said to be close to 30%. But that debt load has to be handled and as newspaper advertising and circulation drops then cost cutting goes to the top of the list.

The broadcast division should benefit very much from the astounding level of political advertising in the just-concluded mid-term elections. But 15 of its TV stations are CW Network charter affiliates and that network must do well to maintain high advertising revenues. Early results are not positive.

The company has sold its corporate jet, three television stations and some property, but, to quote Dickens’ Oliver Twist, it still wants “more”.

Tribune has also unofficially put itself up for sale, but the bids it received for whole company were basically at no premium to its current share price, so now management is talking feelers for selling individual parts of the company, and three billionaire groups in Los Angeles have indicated they are interested in the Times.

Those new investors have good and bad news for the newsroom. They are willing to take lower margins than 20% and invest in the editorial product but they believe the newspaper should give up its internal vision of being a national or international newspaper, and instead it should concentrate on coverage of its own sprawling metropolis.

That conforms with most newspaper logic these days that says newspapers must, on a multi-platform basis, concentrate on local, local, local, but if the Times does change direction and it does gives up trying to be a New York Times or a Washington Post, then it will mean a severe ego crisis for long-time staffers.

The Times also hit the headlines last week for all the wrong reasons – it suffered an audited 8% decline in its circulation in the past six months, the worse of any major metropolitan newspaper in the country. While some of that is because of reducing distribution in non-profit making areas and getting rid of bulk sales to hotels and the like, it still brings circulation down to around 775,000 when just six years ago it was more than 1 million.

And if the paper is bought with borrowed money then those bank or private equity company loans are going to cause their own internal pressures.

Former editor Carroll, now teaching at Harvard University, looks at the situation from afar and has unkind words for Tribune. “There’s a steely determination in Chicago to reduce the Times to mediocrity,” he told his former newspaper. “It’s still a first-rate paper, but it’s teetering on the brink. The only hope I can see is a new owner.

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Baquet Named NY Times Washington Bureau Chief - January 30, 2007

Dean Baquet learned as editor of the Los Angeles Times that if you don’t follow corporate’s instructions and reduce staffing, and you go public about it, that you, in turn, will get the boot and he lost that job last November.

But he has also learned that if you have friends and admirers at your former employer, The New York Times that he had left in 2000 to become LA Times managing editor, that all is not lost, and he has now landed one of the best and most prestigious jobs in US journalism – chief of the New York Times’ Washington Bureau.

Executive editor Bill Keller gushed, “”he is a charismatic leader, an unflinching advocate of the value and values of journalism, and a cool character under fire. It’s nice to have him back where he belongs and in a bureau that can rise to all of his expectations.”