Critics Say Tribune Cutbacks Affect Coverage

The Tribune Company, which owns papers including the Los Angeles Times and the Chicago Tribune, has taken a beating on Wall Street over recent weeks. To drive up stock prices, the company has pursued an aggressive strategy of cutting costs — one that some journalists feel is affecting the newspapers' quality.

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This is MORNING EDITION from NPR News. I'm Renee Montagne.

The Tribune Company owns some of the nation's most prestigious newspapers: the Los Angeles Times, the Chicago Tribune, Newsday. The company has taken a beating on Wall Street after circulation woes and disappointing advertising revenues, and this week the Tribune revealed that it is paying the IRS $1 billion while it appeals a loss in federal tax court. NPR's David Folkenflik reports.

DAVID FOLKENFLIK reporting:

Tribune Publishing President Scott Smith says he's proud of his company's journalistic record.

Mr. SCOTT SMITH (President, Tribune Publishing): We do a great job fulfilling our public service role including through investigative recording that is second to none. There's a reason our company has won more Pulitzer Prizes over the last five years than any other.

FOLKENFLIK: But some of the key people who led Tribune papers to those prizes aren't around anymore. Former Baltimore Sun editor Bill Marimow was fired by his publisher after just a year. He's now a top NPR News executive. Former Los Angeles Times editor John Carroll says his decision to step down last month was influenced by Tribune's focus on the bottom line.

Mr. JOHN CARROLL (Former Editor, Los Angeles Times): I have to say the job satisfaction and wear and tear on the soul surrounded these issues of resources and constant cost cutting.

FOLKENFLIK: Tribune is quite profitable and publicly traded. Its leaders have promised stock analysts to improve its profits year after year, but it has not always fulfilled that promise, and the price of its shares have suffered. To drive up stock prices, Tribune has pursued an aggressive strategy of cutting costs. John Carroll says that threatens the quality of its newspapers.

Mr. CARROLL: The Los Angeles Times is still very strong journalistically, but one wonders how long it can stay strong.

FOLKENFLIK: Since 1960, the LA Times built itself into a worthy rival of The New York Times and The Washington Post, but like many metro dailies, the Los Angeles Times has suffered circulation losses. Budget cuts have followed. Last year alone, the paper cut 162 jobs. Publisher John Puerner left the LA Times earlier this year. Some staffers are bracing for more possible cuts. Company officials such as Scott Smith say they're seeking to compete in a media marketplace where cable television, the Internet and even video games are stripping away readers at a rapid clip.

Mr. SMITH: We do a lot of market research and very few readers will tell you they want more news. What we need to do is give them the news and entertainment information in other categories, including advertising, that they value in their lives.

FOLKENFLIK: He says the cuts don't compromise quality.

Mr. MICHAEL WALLER (Retired Publisher): That's an answer given by a numbers guy.

FOLKENFLIK: Michael Waller's the retired publisher of the Baltimore Sun and the Hartford Courant, both Tribune papers. He says you can tell both papers are weaker by just reading them.

Mr. WALLER: In many of these operations that the Tribune's got, that fat's gone. Every time you cut now, you're cutting something serious.

FOLKENFLIK: Tribune executives reject Waller's assessment. In Long Island, Newsday repaid advertisers $90 million after it was found to have wildly overstated its circulation levels. The paper cut 170 jobs last year and depleted the Washington bureau. This year, it was the New York City newsroom's turn. Howard Schneider started at Newsday back in 1969. He left last year after just 18 months as its top editor when he objected to newsroom cuts. Schneider defines the industry's central question this way.

Mr. HOWARD SCHNEIDER (Former Editor, Newsday): Is it compatible for newspapers to be owned by public companies, given the pressure on public companies to keep their stock prices up?

FOLKENFLIK: When Tribune lost its billion-dollar tax judgment this week, its stock value hit the lowest level in nearly four years. But analysts say its balance sheet is strong. Newspapers make up about 70 percent of Tribune's revenues. By the company's calculation, Tribune papers had a 17.5 percent profit margin last year, and that's considered a bad year. Morgan Stanley media analyst Doug Arthur is generally bullish on Tribune. He owns shares. But he says current stock prices could make Tribune ripe for a takeover.

Mr. DOUG ARTHUR (Media Analyst, Morgan Stanley): If they don't show better numbers, the company could get taken out by somebody and then there could be a lot of carnage.

FOLKENFLIK: At a recent address in Los Angeles, new Times publisher Jeff Johnson said the Times would attract more readers and advertisers by focusing intensely on Southern California.

Mr. JEFF JOHNSON (Publisher, Los Angeles Times): We undoubtedly will have tough decisions to make, too, on where we put resources, where we have to find money to fund new initiatives. Our goal and the goal of our management team is to manage the newspaper as smart as we can.

FOLKENFLIK: Fine, says Times columnist Steve Lopez. But Lopez warns his peers won't swallow new cuts forever.

Mr. STEVE LOPEZ (Columnist, Los Angeles Times): This is a newspaper that makes literally hundreds of millions of dollars a year free and clear. So it's not a problem of, hey, we're losing money.

FOLKENFLIK: Johnson and New LA Times editor Dean Baquet declined repeated requests for comment. David Folkenflik, NPR News.

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