Breaking the Newsroom

In the making of modern southern California in the mid-decades of the century, the Chandler family's Los Angeles Times called the shots. It made and unmade congressmen, senators, governors; it set a good deal of their policy agendas; it put Richard Nixon into the political big time. It professionalized itself, evolving from publisher's power tool to quality newspaper of national stature; its circulation flowed across state lines. As Times Mirror Corporation in the 1970s and 1980s—buying up major papers in Baltimore, Dallas, Denver, Hartford, and Long Island—the empire the Chandlers built dominated the fast-moving news business merger-and-acquisitions game.

In October The Los Angeles Times, seething within, trying and failing to recover lost ground on a depressed news business landscape, became the target of universal ridicule. Two years ago, Times Mirror CEO Mark Willes, having pledged quantum leaps upward in his news papers' circulation and profitability, barely concealing contempt for managerial thinking in a business he'd been recruited to rescue, decreed a demolition of the news business' "wall" between "church" (the news room) and "state" (the front office) at The Los Angeles Times. Willes is a businessman-evangelist out of Sinclair Lewis by way of Wendell Willkie; his plan was to serve as a test-case miracle cure for a helplessly declining newspaper business. Said Willes then, "We think that if we apply basic tools and principles that have been applied successfully in other businesses, with appropriate modification to the newspaper business, we will grow," But Willes's plan in action, exploding in his face, is instead likely to yield a brace of business school case studies of self-inflicted disaster.

The denouement resembled a freeway crash, complete with backed-up miles of oglers. Kathryn Downing, publisher of Times Mirror's flagship newspaper and Willes's protégée, apologized to an "appalled" newsroom staff for a "betrayal" of The Los Angeles Times's integrity in the form of a secretive scheme to share advertising profits with the city's new Staples Center sports arena, which was profiled in a special issue of the paper's Sunday Magazine. Punctuating the death of The Los Angeles Times's business-driven new paradigm, she announced a rewrite of the old one, based on editorial leadership and "clearly defin[ing] editorial independence and integrity." For good measure, the Times will schedule "special awareness training for current and future business-side employees" about "wall" culture and lore.

In case Times Mirror's management-by-objective brass thought that cleared the air, former Times publisher and Times Mirror chairman Otis Chandler of the paper's founding family exercised residual droit du seigneur. Pondering the spectacle from a quiet retirement, he sent a letter to the Times's "abused and misused" editorial department, blasting their bosses for "unbelievably stupid and unprofessional" management. How did one of the mightiest, most respected, and most self-respecting newspapers in the country make such a mess? What is the thinking that leads to such an unhappy conclusion?

Some background: In the 1960s and 1970s, most of the families who ran the nation's major newspaper properties, approaching their third or fourth generation of control and concerned about the future of their prop erties, went public—sold stock in formerly family- controlled enterprises. The Chandlers at The Los Angeles Times did so along with the McCormicks in Chicago, the Grahams in Washington, the Sulzbergers in New York, and the Knights and the Ridders and the Gannetts. There were various scenarios for maintaining, or releasing, family control at the top and family enjoyment of leaps in stock value at the fringes, and for how aggressively to play at merger and acquisition. But all these news business properties went to public market on a soaring growth curve flowing from enormous production and labor savings, thanks to the computer revolution. Circulation and advertising were expanding. Wall Street loved those media stocks. The sky was the limit.

Then came the reckoning: The savings from computerization had worked their wonder, but that was that. Suddenly, computerization was working against news papers; it was fueling advertisers' turn away from mass media advertising and over to direct marketing, based on ever more refined database management. Circulation went flat and began to erode. Then came the recession of the early 1990s, which, for the newspaper business, included permanent as well as cyclical losses.

But Wall Street demanded growth in publicly traded media corporations based on their boom-years performance: maintenance of, even improvement on, profit margins near or above 20 percent, way above levels for other industrial sectors. Failure to perform at such rates disturbed investors (not to mention relatives of the old family newspaper proprietors, preoccupied with the value and yield of their blocs of stock). For newspapers, a measure of recovery from this decade's recession came at the price of brutal retrenchment that saw the end of an era of expanding newsroom horizons. News budgets and staffs shrank; foreign bureaus closed down. Everywhere, publishers were on notice to wring more profitability from newspaper properties. Everywhere editors were told to do more with less.

In the recession, the mighty fell especially hard. Times Mirror, bloated and bleeding, sold its Denver and Dallas papers, shrank back The Los Angeles Times's geographical reach, and hunkered down. But nothing seemed to work, so Times Mirror's board traded in its venerable management team for a recruit from the packaged-foods industry who stood for marketing shrewdness and, above all, growth.

In his first year at Times Mirror, Mark Willes thrilled his board and Wall Street with what were called "shock treatment" cuts. For starters he killed Newsday's New York edition, unloaded $750 million in other Times Mirror ventures he deemed not worth the effort, and cut 3,000 employees from the company.

That was prelude. One of Willes's mantras was "If you don't grow, you're dead." So even while acknowledging The Los Angeles Times's enormous, expensive burden of replacing lost home-delivery subscribers with new ones, or "churn" rate (90 percent at the Times, 19 percent above industry average), he promised to increase the paper's circulation by half, from 1 million to 1.5 million. Times Mirror's stock responded, climbing to almost three times the level it was when Willes arrived in 1995. Then in 1997, functioning simultaneously as corporate CEO and publisher of its flagship paper, Willes announced the end of the separation of news and business operations at The Los Angeles Times. His words revealed his subtext: frustration with what he saw as intellectual and entrepreneurial bankruptcy among his top editors. In calling for ideas for "maximizing readership" from both the news and business branches of the Times, Willes frankly told a reporter that year, "I would be surprised and disappointed if most of the ideas didn't come from the business side." The Times's Kathryn Downing's abject words to the paper's news staff about the deeds of the sorcerer's apprentices say more than any of Willes's critics have about the reasons for the wall in the first place.

Deep down, the thinking that fed this debacle was shallow. Willes's assault on the church-state wall made the most fuss among journalists. But he was more vulnerable, especially among his business-side peers, in tying himself to circulation-growth targets for The Los Angeles Times that top executives at other news corporations say they view as outlandish. (This November, Otis Chandler called them "unrealistic and impossible.") Fortune's favorite on Wall Street because of these goals, Willes will be held accountable when it becomes clear he can't deliver them.

In worshiping at the temple of growth, Willes, confident of his marketing wizardry and blithe in his ignorance of the news business, made only the usual surface probes into the reasons for circulation shrinkage. These are the focus groups and readership surveys that tell news executives to "connect," to infotain, to segment and niche and featurize; that too much news is bad, foreign, and boring; that what we all want to hear about is what's good for me, me, me. Their translation into industry jargon depends on the language of technology and marketing: "interactivity," "customer obsession," "relationship marketing," "targeting," "branding."

The deeper problem is this: The basic product of the news business is news. At the core of that industry product in a democratic society is news of the democracy—of its political system and governance, and the relevance of those areas to social issues and to the public's hopes and fears. Again and again in various ways, voting with their feet, their reading habits, their channel switchers, their voting turnout, their responses to polls, sizable portions of the body politic have signaled their disgust with an American politics that has become rootless, offensively negative, and trivialized, and with news coverage of it. Cheapened politics and a cheapened press are mutually reinforcing. A good deal of the debasement of news coverage—obsession with the scandalous and the personal—is nature filling a vacuum. The slide from a politics of substantive agenda and action into a politics of spin, image, and money required to shape it is the source of the vacuum.

Further, the high-priced media management at the heart of the new politics parallels the search in the news business to buy synthetic, marketable formulae. Millions for poll-driven, television ad-based campaigns to market candidates and destroy opponents mean a commercialization of political process, far beyond the fundraising of old. The assault on the church-state wall and the move to manage news content according to focus-group indicators and data-based target marketing, correspondingly, pushes journalism—always something hitherto more than "just a business"—relentlessly toward salesmanship.

Add the fact that the more refined the new machinery of politics, the more it feeds the law of diminishing returns, turning people off for the long term, whether or not it motivates them for the current election cycle. "Negative advertising still works, but it works less well than it once did," campaign consultant Raymond D. Strother told a reporter last year. "It's just the abundance of it. People have built up an immunity or resistance to it."

This complex of negativity is the heart of darkness for the news media because it demands that those who manage it face up at once to the intertwined roots of circulation loss and political alienation. This is hard work, harder than focus groups and readership surveys can handle. It's more than half- measures like "civic journalism" can encompass, for they can't succeed as more than transient journalistic campaigns, short of full engagement with dysfunction in the political sphere.

And so the fundamental issue of people's alienation from public life, from the stuff of the news, falls to the side. Politicians condemn "sensationalist" media. Journalists hold solemn symposia on the corrosiveness of the journalism of scandal. Publishers task their staffs with dreaming up schemes for packaging and marketing the product more effectively. All are fiddling on the margins as the erosion of public engagement with the stuff of the news, and public disgust with its commodification, intensifies.

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