The End of Times Mirror
| American Journalism Review
| From AJR, May 2000|
The End of Times Mirror
Consciously or subconsciously, Mark Willes turned the venerable newspaper company into an irresistible takeover target.
By William Prochnau
THEN WORD FIRST SQUIRMED out--leaked, of course--about the sale of the Los Angeles Times and its parent Times Mirror, I was on the side of a very angry volcano in Ecuador with a motley group of L.A. Times readers. The mountain, 16,600-foot Tungurahua, was grumpy indeed--belching a continuous plume of ash and gas miles into the sky and provoking an "orange alert." We had already heard our "lava warning"--stay in the hotel, don't worry, the molten rivers will flow down the deep ridges on both sides of us and the Ecuadorean army would be along quickly to get us out. This was not entirely reassuring.
William Prochnau, a former national reporter for the Washington Post, is a contributing editor of Vanity Fair.
But the eruption came several thousand miles to the northwest.
A movie company might not provide the ideal focus group. But I've never been convinced that these groups of typical readers, the darlings of newspaper executives who no longer believe in themselves, were all that focused anyway. So a quick poll seemed as good as any--and these folk provided the only readers available in any case.
A brief word of explanation is necessary. I spent most of the end of last year examining the tumult and turmoil at the great but troubled California newspaper for this magazine and the Project on the State of the American Newspaper. Now I am in Ecuador, where Castle Rock is filming Meg Ryan, Russell Crowe and David Morse in an action-romance called "Proof of Life," an adaptation of a Vanity Fair magazine article I wrote two years ago about international kidnapping.
Appropriately, Taylor Hackford, the director, was the most direct. "Wow!" he exclaimed, and it was a half-sad wow of wonderment that a piece of L.A. history was leaving with the bizarre Chandler family and major changes were coming to the town where Hackford had started out at the local PBS station before moving to the bigs. Cid Swank, a publicity agent and former Peace Corps volunteer, was downright forlorn, afraid that the new owners would steal her dreams by dismantling the Times' foreign team, whose front-page stories carried her each morning to far-off places she had been and others she still wanted to visit. Her boss, Paulette Osorio, who had come to L.A. from Chicago, ventured that the Tribune Co. might be an improvement over the Chandlers. Beyond them, the workadays--the grips, the best boys, the gaffers--just shrugged and went on with their work.
The truth of the matter is that, Hollywood or not, you are rarely a hero in your hometown. The Times is certainly no exception, and most people don't give a damn who owns it. If Nintendo can own a major league baseball team and an Internet service provider can gobble up Time Warner, Chicago buying Los Angeles is not as earthshaking to most people as a minor tremor on my mountain.
In the thin, dizzying air of the 9,300-foot-high Avenue of the Volcanoes (there are nine active ones) around Quito, the news seemed less thunderous than it normally would. It seemed more surreal than stunning, even having some faintly comical aspects. Mark H. Willes was getting weepy again? Shocked that those nasty lawyers and that strange family who hired him could do this to him? Leaving him with a paltry $70 million to $90 million for toiling in that old orange grove that had been sacrificed once before to greed? It was Willes who had set up this fruit for the plucking. It was Willes who had stripped the place bare, made the Times a takeover target if anyone ever saw one. They said he didn't walk the walk of journalism. But he walked the walk of Wall Street and hypercapitalism. Mark Willes is weepy again? Now that's a good laugh.
It was Willes who sold and sold and sold, dismantling Times Mirror bit by bit. It was Willes who goosed share prices up by buying back Times Mirror stock with the corporation's own money. It was Willes whose egomania convinced him that his ideas about running newspapers were so ingeniously right that he should become publisher of his flagship. From that moment on, over the course of almost three years, the stock price actually went down in one of the most booming economies in the history of capitalism. It tells something about the Chandlers that it took five years for the founding family to see that their boy had built a Potemkin's Village. His underlings, the business executives at Times Mirror, saw it. The emperor is wearing no clothes, they whispered as they almost went crazy trying to make his ideas work before peeling off by the dozens.
So if Mark Willes didn't know that even this right-wing, coupon-clipping, dysfunctional family, this family that dreaded reading about itself and its idiosyncrasies in the printed pages that made it rich; if Mark Willes didn't think that this family would turn on him when the money stopped and the jokes began about foolishly impossible circulation gains and claims that he could lure Latinos to the newspaper the way he had lured them to Cheerios; if Mark Willes didn't think this family would turn on him, pardon me while I gasp for a deep breath of thin Andean air.
Weepy again? Willes always could turn on the tears with Hollywood ease. Now here he was, after five years at the helm, sounding as wounded as Gen. William Westmoreland when he was yanked out of Vietnam after four years with a "plan" whose only success was downsizing with body bags. Weep with Mark? No thanks. Only in the Roaring '90s or the Whatever-Is-Coming Oughts could someone be paid the life wages of a couple of good-size newsrooms for creating an outright disaster--and then feel he had been hornswoggled.
No, it is the grunts who are owed the tears when I read via the wonders of the Internet that the new go-go owners from the Tribune Co. are already expressing confidence that they can find "operating efficiencies" to bring their new toy into the modern world of the 29.2 percent profit margins its newspapers enjoyed last year. How many times in recent years have the dedicated journalists at 2nd and Spring heard that one? I suppose this is the world we live in--where "operating efficiencies" are a euphemism for body bags and a 29.2 percent profit, which is greater than the cumulative annual raises of an L.A. Times reporter for the past 10 years--is considered not only normal but admirable. In Ecuador there would be rumbles about la revoluci¨®n--or at least a head-bashing union.
I look back now at the depth of the reporting that my wife, Laura Parker, and I did on this story, months of work, scores of interviews, returning five, six, seven times to deeply buried sources, and I wonder why we and almost no one focused on the obvious. We discovered the Potemkin's Village. We saw the emperor wore no clothes. Why didn't we see beyond the great myth of Grandfather Chandler's ironclad will and spot the logical outcome? The whole kit and caboodle was on the block. Not just the Times, built decades ago from an outright rag to one of the very best by the only Chandler who half-cared, that complex man-surfer-hunter, Otis. But also those classy Times Mirror sheets back East--the Baltimore Sun, Newsday, the Hartford Courant. All just newsprint fodder for huge finder's fees, endless country club dues, and man-made disaster insurance for itinerant CEOs and publishers. In all the gathering of information last year, there was one truly wonderful headline I wanted to squeeze into the story somewhere and never did. It was stripped across a Web page owned by a fast-lane headhunting company that reproduced a Wall Street Journal story on the rapacious era of the have-gun-will-travel CEO:
"Do You Need to Be an Expert on Wigits to Be CEO of a Wigit Company?"
It did seem it would help if you could spell widget. How old-fashioned I am.
You can go through all the modern hype talk about branding and silos and mini-publishers for the sports section and that absolute Willes dandy, "discontinuous function"--essentially a "eureka!" leap in logic that moves the creative thinker past the stumbling blocks of methodical reasoning. But in classic fashion--consciously or subconsciously might be the question--Willes was setting Times Mirror up for a takeover. By the end, no matter what he truly had in mind, he had a stripped-down corporation loaded with cash and a starkly down-trending stock price that bled with self-imposed embarrassments, angering its owners. The only impediment was the mythical barrier of old Harry Chandler's will, written in 1938, two years before the German blitzkrieg went through the impenetrable Maginot Line. Or, more accurately, around it. It says something about the Chandlers that even with all the high-priced lawyers, in the end, a paralegal found the hole in the old man's dike.
Until then, the writ that Harry Chandler had his lawyers draw up 62 years ago was thought sacred and inviolable. It was thought to prevent the sale of the family heirloom till the last of his grandchildren--the generation of Otis--had died. As of today, there still are seven going, and the youngest is only 63. It is a long-lived brood, and Otis told me last fall that he figured the paper was still tied up for a good 30 years. Of course, Otis was the black sheep, an outright radical. He actually believed in creating things with his wealth and, archaic thinker that he was, thought that such an act could be publicly responsible and create more wealth. That kind of thinking curled the golf shoes of his Paleolithic relatives. So Otis was the last to get the news of the great coup d'¨¦tat. Reporters learned earlier than Otis what he no longer owned.
I pushed Otis about the will last fall. I was to have the reporter's good fortune--but the inability to print because of magazine deadlines--of hearing Chandler lambaste Willes, Publisher Kathryn Downing and Editor Michael Parks seven weeks before he used the same language in the sensational memo to his old staff during the scandal of the so-called Staples Affair.
Chandler acknowledged that over the years family attorneys had occasionally looked for loopholes. "When push comes to shove, almost anything is possible," he said, "and there have been lawyers who have taken cursory looks at it and said, 'Maybe.' " But it would take a unanimous vote of the grandchildren, he said--an impossibility in his view--"and at the very least it would have to go through a major court." In the end Otis didn't even get an absentee ballot, and the courts have been quiet.
I asked perhaps my best source, who had risen to the heights of the company before pulling out in exhausted disillusionment: Can the will be broken? "There is only one man in this town who knows the answer to that question," my source replied. "That man is Tom Unterman. And he isn't going to tell you." He didn't. Unterman, a lawyer, had been the chief financial officer of Times Mirror, helping the Chandlers find a way to peel a tax-avoided billion or so out of the corporation amid the wheelings and dealings of Willes. He accomplished that, with only a handful of journalists, mainly Allan Sloan of Newsweek, squealing over the legal but unseemly act. But that wasn't the real goal. The real goal was to dump the whole works. This he helped the Chandlers achieve, leaving Times Mirror to work for their Trusts, whether just before or just after the beginning of the sale negotiations remaining unclear. For doing what lawyers do, Unterman will receive an "advisory fee" of upward of $10 million and be followed forever by the faintly odiferous tailwind of the man who sold Los Angeles to Chicago, the Times to the Tribune.
But, according to the Chicago Tribune, it was the paralegal who found the golden key. The unanimous vote was required of the trustees of the Chandler Trusts, a fund set up to handle the family money, not the Harry Chandler grandchildren. Otis had long since been edged out of formal family power. The trustees include six Chandlers from the other side of the family and their lawyer, William Stinehart Jr. So it was voil§Ñ! and au revoir Times Mirror.
The comments and commentaries have ranged far and wide about the meaning of this huge step toward the final corporate condensation of newspapering, what it means to the Henry Weinsteins still walking the courts beat in L.A. or to future deployments when someone will decide whether reporters from the Times, the Tribune, the Sun, Newsday and the Courant should all show up at the same big story. As to the latter, I'd wager that the day will come soon when they should but will not--and something minuscule but profit enhancing will subtly but surely deprive readers in more than one city. And I would wager that Cid Swank's dreams will be diminished someday, when she lifts the paper off her Venice doorstep and reads AP rather than the usual front-page Times bureau story out of Sri Lanka.
There is nothing new about folks like me railing against the disappearance of local ownership and the megacorporation takeover of the American press. Still this one really pounds the edges. Both the Times and the Tribune have historical records of good and wretched journalism. Both Chicago and Los Angeles are great American cities. But these aren't the issues. Even big business isn't the issue. The issue is closer to this: Given the best of intentions, is it healthy for the innate isolationism and natural conservatism of the American Midwest to make the choices for the avant garde natural expansionism of the West? Any more than it would be the other way around?
From the high reaches of a poor Andean country plagued with problems infinitely more elemental, such anguish seems like the arcane blathering of a spoiled norteamericano. Still, I haven't traded my Honda for a llama yet, so I couldn't help note with fascination and a tad of thin-air confusion the comments of Otis Chandler at his first public outing after the event.
"This was a unique opportunity to place our company in fine hands," he told a Southern California writers' conference.
Otis??? I suppose you could mean that it's not so bad finally being a billionaire after all these years buying your classic cars on a dividend dole. But I choose to think, in the temporary security of my little spot just south of the equator, that you really mean that the paper you clearly love is better off with the get-all-the-bucks-you-can-get Tribune Co. than it is with your wacky cousins. ###
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