Tribune's Plan to Cut Paper's Staff Sparks Revolt

  • Playlist
  • Download
  • Embed
    Embed <iframe src="http://www.npr.org/player/embed/6105367/6105368" width="100%" height="290" frameborder="0" scrolling="no">
  • Transcript

The editor and publisher of the Los Angeles Times are rejecting the demands of their bosses to make additional cuts this year. The Tribune Company also owns the Chicago Tribune, Newsday and eight other dailies, 26 television stations and the Chicago Cubs.

The fight that erupted in Los Angeles forces this question to the surface: Can top-flight newspapers owned by publicly traded companies serve both investors and the public?

Last night, Tribune CEO Dennis FitzSimons said resoundingly, yes. He sent a letter telling concerned civic leaders that the Los Angeles Times had enjoyed an unprecedented spurt of Pulitzer Prizes, new investment in equipment, and a stronger focus on local news since Tribune bought the paper in 2000.

But former editor John Carroll says the Times would be much better served by local ownership that accepts more-modest profits. He was appointed by Tribune after the purchase of the Times, but left a little more than a year ago, largely in protest.

"At The New York Times and The Washington Post, there is much greater interest on the part of the top executives in fulfilling an obligation to society," Carroll says. "In the Tribune Company, one gets the feeling that there is only one constituency to whom the leadership is playing, and that is Wall Street and the funds who own the stock."

According to a person knowledgeable about the Los Angeles Times' operations, Tribune is demanding that the paper increase its profits each year by 7 percent. Because revenues aren't growing, there's been a constant cycle of cuts.

A little more than two weeks ago, the Tribune Company's top newspaper executive, Scott Smith, delivered the latest: the Los Angeles Times had to eliminate an additional $10 million in costs before the end of the year. The paper was also told it had to pare back from 930 journalists to about 800.

A staff that size could still cover foreign and Washington news, and it would still be one of the largest news departments in the country — roughly that of The Washington Post.

Publisher Jeff Johnson is a former Tribune executive. He concluded that the ability to attract advertisers and readers in the sprawling, multilingual region would be damaged. Tribune is proposing a news staff 30 percent smaller than the one it inherited. And the business side — especially circulation — has also taken repeated hits.

Johnson told the Times, "Newspapers can't cut their way into the future."

So Johnson and Editor Dean Baquet refused their marching orders.

Charlie Bobrinskoy is vice chairman of Ariel Capital Management, which owns 6 percent of Tribune's stock. He says corporations can't tolerate such blatant dissent.

"The current situation with the local management of the L.A. Times saying 'no' to their bosses is not sustainable," Bobrinskoy says.

Here's the hard math behind the bitter struggle. Internet and cable competitors are peeling off advertisers. At The Dallas Morning News, The Philadelphia Inquirer and even The New York Times, the ranks of reporters have been slashed as owners seek to reassure investors.

At Tribune, the stock price has dropped sharply. A former Tribune Company executive spoke to NPR on condition of anonymity. He says the Times is quite profitable — but it almost doesn't matter, as it's not enough to help lift the value of Tribune's stock.

The paper is making more than 20 percent a year in operating profits — on revenues exceeding a billion dollars a year. But the hometown Chicago Tribune runs a much leaner outfit — making about 30 percent. And corporate executives want to bring the Times in line.

Concern for the paper's fortunes has reached to circles beyond journalists and investors. A group of 20 influential civic leaders wrote FitzSimons last week in protest. Steve Soboroff is a developer who helped to arrange the letter.

"We know the difference between economies of scale and laying off columnists, entertainment writers, etc.," Soboroff says.

Three Los Angeles billionaires — Eli Broad, Ron Burkle, and David Geffen — have separately offered to buy the paper. So far, the company says the Times is not for sale.

Charlie Bobrinskoy of Ariel Capital Management says Tribune should listen more carefully.

"The stock market is right now not valuing diversified media companies, so the board of the company has to decide they are going to take advantage of some of these very attractive offers to purchase some assets," Bobrinskoy says.

Tribune and Times executives declined repeated and detailed requests for comment.

The company's board will meet Thursday. The mutiny in Los Angeles is expected to be on the agenda.

Disclosure: NPR media correspondent David Folkenflik previously worked for The Baltimore Sun, which was purchased by the Tribune Company in 2000. John Carroll was his top editor at the Sun for six of those years.

Related NPR Stories

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.