The Shrinking L.A. Times   

The Los Angeles Times rose from mediocrity to join the newspaper elite. But in July the unthinkable happened: 150 newsroom positions were slashed and sections were scrapped. Where does it go from here?

He recalls the crusading words of the paper's Greek God of a publisher, Otis Chandler: The Los Angeles Times was going to be the number one newspaper in the nation. Chandler promised to spend whatever it took to push the New York Times off its pedestal.

That was 30 years ago, at an awards banquet. The L.A. Times' young Atlanta correspondent, Jack Nelson, remembers the occasion vividly. "I was mightily impressed, no question about it," says Nelson, now the Times' veteran Washington bureau chief.

Since then, the L.A. Times has gone from being a political rag no decent flounder would want to be wrapped in to one of the nation's preeminent newspapers. With promises of high salaries and cushy lives, it lured top reporters and kept them content. The L.A. Times was renowned for spending extravagantly, flying reporters first class, paying for four-star hotels on out-of-town stories, often encouraging reporters to stay longer than necessary to write their pieces in luxury.

The paper sent its onetime science writer, Bob Gillette, to South America in search of a story about a giant leech. On the basis of what turned out to be a false lead, it packed off the late Jerry Belcher and Dave Smith to Hong Kong in search of the elusive Patty Hearst. And after reporter Michael Wines (now with the New York Times) spoke by phone to a source living on an island near Denmark who said he might talk to Wines in person about Iran-contra, the reporter boarded a British Airways flight and was knocking on the source's door the next afternoon.

The Times was a writer's paradise, where stories were rarely cut and were so loosely edited that they were said to be checked sometimes only for spelling.

By the late 1980s the L.A. Times was ranked near the top of American newspaperdom, bunched with the Wall Street Journal and the Washington Post one tier below the New York Times. It was known as the "velvet coffin," because no one could think of a reason to leave. It was also, Chandler boasted, the most profitable daily in the world. Great quality begat great rewards.

But those expansionist days are part of the Times' halcyon history. In July, after several years of more benevolent snipping and trimming through buyouts, a new world order was declared. The paper slashed 150 full time equivalent editorial staff positions (176 actual people, including part timers), eliminating numerous sections. For a paper known for its benign treatment of journalists, the cuts were bloody, and shocking.

In the last five years, the paper has shrunk its overall staff by a third. The editorial staff, which had ballooned to 1,300, is slated to be reduced to a still hefty 1,100. Newsroom employees who thought they had a job for life no longer feel safe.

Unlike other papers struggling to find readers, the Times' daily circulation hovers at just over a million, down slightly from a year ago because of slipping street sales and the paper's decision to cut back home delivery in San Diego and other cities it once served. It's so thick with ads and inserts that an errant toss of the paper could kill a chihuahua, even on a weekday. Nevertheless, classified ad lineage has dropped 30 percent compared to 1990.

Employee and newsprint costs were gnawing away at revenues, and parent Times Mirror's stock was flat. To pare down, the paper scrapped six zoned suburban sections; City Times, launched after the L.A. riots to reach urban African Americans and other minorities; the respected World Report section; Nuestro Tiempo, the free weekly Spanish language tabloid; and the Washington Edition, a mini Times chock full of national and foreign reporting, minus ads, and distributed to people who count in Washington and New York.

"People are frightened," says one Times writer. "When people like Peter Rainer [chairman of the National Society of Film Critics and one of the Times' three movie critics] are let go, you can't say, 'Oh well, I'm safe.' All bets are off."

"This is the first time I've seen the paper retrench in the 30 years I've been here," Jack Nelson says. "On the other hand, it may have overbuilt somewhat in the fat city days."

Despite the incisions, the core paper is virtually intact. "We're not doing anything to harm that in any way," says Associate Editor Narda Zacchino. With the exception of World Report, she says, "there was nothing taken away that is read by all the readers of the Los Angeles Times."

The overriding strategy, explains Publisher Richard T. Schlosberg III, "is to insure the core of the newspaper is not only preserved but enhanced... We cannot do that if we are deflected by numerous what I would call worthwhile but marginally beneficial experiments."

On June 1, former General Mills Vice Chairman Mark H. Willes took office as president and CEO of Times Mirror, the L.A. Times' parent company (see "General Mills' Gift to Journalism," July/August). Zacchino says management had been discussing ways to reduce staff and make the newspaper more efficient before Willes came on the scene. But once he arrived, says another staffer, the pressure became more intense.

On Friday, July 21, more than two dozen top editors gathered in the publisher's conference room at 8:30 a.m. to pick up packets of information they were to hand to those being laid off.

Rarely seen sportswriters, usually on the road or in a ballpark, appeared in the newsroom. So did reporters covering the O.J. Simpson trial (no sessions were held that day) and nearly everyone else who worked downtown. They'd come for a 9:30 meeting with their editors.

At the morning Metro meeting, Editor Shelby Coffey III recalled, he told the staff what a hard day it was for the paper, adding, "We're going to get through it." He said management hadn't wanted to make the cuts but "we had to deal with the economic health of the whole institution."

That was to be followed by a painful day of apprehension. "It looked like people were waiting to be executed," recalls one longtime staffer. Some reporters wore funereal black. Others wore dark glasses. Those who were told they had appointments with their bosses instantly understood they no longer had jobs.

It was a stark contrast to the glory days of Otis Chandler and many reporters and editors felt that if Chandler hadn't "walked away," in the words of one retired editor, the cuts might never have occurred.

The Chandler Trust owns nearly a third of Times Mirror common stock and a majority of the voting stock. Four generations of family members had run the L.A. Times. Otis had been publisher from 1960 to 1980, later serving as editor in chief of Times Mirror and chairman of the board. So staffers wondered if he knew what was happening to his family's flagship newspaper, the one he had promised to make the nation's best, and they longed to hear from him. After Chandler faxed Coffey a note expressing support for the moves and sympathy for those adversely affected, Coffey relayed some of his words to the staff.

Compared to previous reductions, when staffers were offered buyouts, this time the "anxiety moved to a higher level," notes one reporter who survived. "Editors looked very nervous." For part of the day, security guards stood by the elevators near the publisher's office.

A flow of depressing e-mail zapped around the building, as staffers learned who was doomed and who was spared. Terminated workers were offered a more generous package if they agreed not to sue the company. The Times offered to help find newspaper and other jobs elsewhere.

While it sounds "a little mean," high voltage Metro Editor Leo Wolinsky had refused to tell staffers who quizzed him ahead of time if they were on the list. "It would have been wrong but I didn't want to do it anyway because I felt it was a shared experience of loss here and if you felt you might go yourself, even though you didn't end up going, you had more empathy for the people that did," he says. "I mean toward the end, I knew I wasn't on the list because I was doing it," yet he too "felt I might go. I really did." And he felt the shared sense of loss. "Everybody suffered."

"A lot of people thought maybe they were on the list and weren't," Managing Editor George Cotliar says. He and Coffey roamed the corridors that day, walking up to knots of employees, reassuring them the paper still had "1,100 very talented people."

"I would not want to do this ever again in my life," says the avuncular Cotliar, "or be a party to it."

His hair grayer, his face far less cheery than a few years before, Coffey is said to be devastated by some of the cuts. But that's not something he'll share with outsiders. "I worked at a Times Mirror newspaper that hit the red line, crashed through the red line, was sold and is now dead," he says, referring to his tenure as editor of the Dallas Times Herald. It was, he adds, "a searing, mind-clearing experience... I was back in Dallas recently, and if I'm not mistaken there's a parking lot where the building was."

A smart, creative but cautious executive, Coffey brought his own tape recorder to his interview with AJR. A diplomat in an industry that has few, Coffey spent much of his career as a Washington Post editor.

He maintains that the paper's goal is still to be the best, but that "depends not on the size of what you do but the quality of what you do," and he's not "overly concerned with comparisons." For now, he says, editors will have to curb their "natural creative urges" to produce new sections until it's clear "they can work well in the economic context."

CNN President Tom Johnson, a former L.A. Times publisher, says that "even in times of economic stress, the Times does a splendid job on national and international news... I really think they've done a tremendous job of keeping the paper strong during economic difficulties."

The Times' cutbacks are not unlike those that other papers and network news divisions have endured in recent years. "So long as news organizations are owned and operated by people who are not news junkies, I think we'll run into this more and more," says Marvin Kalb, director of the Joan Shorenstein Center on the Press, Politics and Public Policy at Harvard. Kalb bemoans the loss of the paper's Washington Edition and the Times Mirror Center for the People & the Press, a polling unit whose funding will be halted at the end of the year.

"They're not evil people," he says of Times Mirror management. "They're people trying to make a living in an extremely tough, competitive market, which unfortunately has public policy implications."

Not everyone is as philosophical. "For a company that's making money, which this one is," says a veteran Times writer, "it is fundamentally immoral and socially irresponsible to put people out of work." But, he adds, "our management is not alone in rejecting that view."

Although Otis Chandler has refused to grant interviews recently, he agreed to speak to AJR about the current status of the L.A. Times. He says he's "very pleased with Mark Willes. The things he's done are almost all the things we looked at doing in the last several years and for one reason or another, decided not to do them.

"Even during the '60s and '70s, my rule has always been the most important thing was to make sure you produce good profits because if you didn't, you couldn't plough money back into your editorial product, expansion of your plant and equipment."

He adds he's "very much in agreement with the current climate at the Times and Times Mirror." The cuts "had to be done." And before they were announced they were "run by me," he says. "I approved of them, even though I winced. Some were projects I'd initiated in the good old days."

The Times, he points out, still has 1,100 people in its editorial department. "Most editors of metropolitan newspapers would be thrilled to have half that number, so I don't think we're cutting the bone. I think we're cutting some flesh and trimming up."

Chandler, who spends much of his time in Oregon now, receives the Times by airmail a day late. "The paper," he says, "is doing very well as a newspaper and actually as a profit center as well. Everything is relative. We live in difficult times today for all kinds of businesses, including newspapers."

Senior Editor Carol Stogsdill thought she understood cost cutting, L.A. Times-style, back when she was at the Orange County edition and a video arrived from then-Publisher Tom Johnson advising the staff to scale back. "We cut out popcorn at the news meetings," she recalls. "I've gotten a certain education in what cost cutting means since then."

Beginning in July 1994, a handful of editors met in regular strategy meetings to see how the paper could be run more efficiently. From the beginning the editors were paired with the Boston Consulting Group, which had been hired to help the newspaper "make strategic decisions," says Business Editor Robert Magnuson. Whatever the objective, by all accounts, the consultants failed. BCG officials would not comment.

Touring the editorial department with Cotliar, one consultant had been there only ten minutes before he started saying "we." Cotliar had a "fantastic desire to say 'Like hell!' " He felt he was teaching the consultants Journalism 101 – in high school, not college. At their first meeting with some editors, consultants said they'd successfully "reengineered" a container company. The editors tried to explain that a great newspaper wasn't like a container company.

The strategy group formed committees to look for "layers and spans," redundancies at the paper. From their work came the idea of consolidating Times foreign bureaus with those of two other Times Mirror papers, Newsday and Baltimore's Sun, outraging many journalists with the prospect of fewer voices covering important international events.

Editors also were asked to consider the possibility of narrowing circulation to affluent, white readers, something that could attract additional advertisers while "forgetting the mission of the newspaper," Stogsdill says. And why, asked the consultants, did the Times need a copy desk when it already had an assignment desk?

Only after the consultants had faded away and Coffey took over the strategy meetings did the gathering grow serious. Under the editor's leadership downsizing became "a very, very long process of study, thinking about strategy, who we are, what we do and what we could do better," says one of the participants.

Editors hoped they could shrink the paper's labor costs through attrition. But Schlosberg opposed that approach, as he does buyouts, as poor management strategy. A paper loses some of its best talent that way, he believes.

Mindful of potential lawsuits, the editors were careful not to knock out all older reporters, for example, or all minority staffers. They agreed to cut staffers, mostly copy editors, who'd taken buyouts but had returned to work two days a week, Cotliar says. Then, according to Cotliar, they cut other part timers, staffers whose sections or jobs had disappeared and "then the people whose evaluations came up less than other people's evaluations."

"There was a strong perception in the room that the dead wood was eliminated..," says one editor who requested anonymity. "Now it's a smaller but better staff." Not everyone agrees. The good news, says Stogsdill, is that very few people on the staff had been poor performers. "The bad news," she adds, "was we had to come up with a certain number of people anyway."

The strategy sessions were fast becoming cost-cutting sessions. But, until the final weeks, the editors didn't think City Times, Nuestro Tiempo and the Washington Edition were in trouble.

On July 14, Willes was in New York, pinning a "Too Smart to Die" button on his lapel, hours before ordering the closing of New York Newsday. Times Publisher Schlosberg, who accompanied him, looked at the continuing slump in the Southern California economy and increased the number of positions to be eliminated from 100 to 150.

"New York Newsday was going to create such interest in the company, I was sure whatever plans we had at the L.A. Times we wouldn't have much time to implement them," he says. Until then, jettisoning the Washington Edition was under consideration but not a fait accompli. But once Schlosberg witnessed "the trauma of New York Newsday," Cotliar says, "he felt he couldn't justify keeping the national edition. That was the biggest loss." Schlosberg's second day back, he met with the top 300 people "and laid out what was going to happen."

A former pilot with a large, expressive face, Schlosberg is disciplined, direct, smart and forceful. While the paper endorsed Gov. Pete Wilson in his reelection bid last year, angering staffers, it came out against Proposition 187, a harsh anti-illegal immigration proposal opposed by many Times journalists. In July, Schlosberg scored additional points by appointing the popular and respected Janet Clayton to be editor of the editorial pages, making her the first African American on the Times masthead.

"The cuts we made don't even exist at other newspapers for all practical purposes and they didn't exist at the L.A. Times five years ago, except for one thing," Schlosberg says, referring to the Westside edition. He points out the paper still has a massive staff, 25 foreign bureaus and 14 domestic bureaus, "so I don't apologize for the kinds of things we've done."

Several days after the purge, CEO Willes asked to meet the editors of the Times, partly to apologize for likening the company's newspapers to yellow boxes of Cheerios, as he had in interviews with the New York Times. He promised that when talking about news, he would never again mention cereal. More important, he also said he did not anticipate additional layoffs.

While acknowledging he knew little about newspapers, he delivered an impassioned defense of their future. "One editor made the mistake of asking what [Willes] would like to see in the newspaper, a terrible question," Cotliar recalls. But Willes' answer impressed him: "That," Willes said, "is for Dick [Schlosberg] and Shelby [Coffey] to decide.

Senior Editor Stogsdill says she and other editors who tend to be a cynical lot were "embarrassed" that they found Willes' talk "impressive... Here this guy just agreed to lay off 150 editorial employees. He'd shut down New York Newsday," but when he spoke he talked about his commitment to newspapers. He also said he wanted the Times to be a great newspaper – just with fewer people.

If Willes' objective was to change the company's perception on Wall Street, he has succeeded. Between May 1, the day his appointment was announced, and early September, Times Mirror stock shot up from 18 to 30.

For years, the Times had expected to ýecome the dominant voice in California. Today, it has dropped its more grandiose plans to focus on the Los Angeles area. In 1992, the Times shut down its San Diego edition. It continues to wage a major battle in affluent Orange County against the Orange County Register, the dominant paper.

Management says all of the sections eliminated in the recent bloodletting had proven unprofitable. Some, such as City Times, were never expected to make money, but to provide a public service. The twice weekly Westside section was in the black, Schlosberg says, but not enough to withstand additional anticipated increases in newsprint prices.

While staffers are shaken by the recent turmoil, many felt the latest incarnation of zoned sections were hobbled hybrids; they weren't sorry to see them go. (In addition to the main paper, the Times still publishes three regional editions.) Some stories will be lost, as will "the more intimate connection with these communities," says Metro Editor Wolinsky. "The truth is, I don't think those sections were – because of the size of L.A. – ever able to get close enough to the communities anyway."

City Times, a weekly attempt to cover African American, Korean, Japanese and Chinese residents, had been budgeted for close to a decade. Not until the riots, though, did the Times finally create it. Back then, Linda Williams, a black Times editor, told AJR, "One of the things that will tell how serious [Coffey] is, is what happens to the central city section." (See "Racial Resentment Hits Home," July/August 1992.)

"This is the child that never got to live very long," Wolinsky says. "It was excellent for the community. They could say this was the normal news of South Central or of East L.A. or Koreatown. Things go on here just like every other community..and we'll have to pick that up somehow."

Other staffers felt City Times was an insult to the ethnic communities it was intended to serve. It gave those minorities a newspaper that "had training wheels," says one, while the rest of the paper was cruising in a Lexus.

Even the paper's much praised Nuestro Tiempo, a weekly attempt to reach L.A.'s huge Spanish-speaking population, was considered half-hearted by some bilingual journalists. Despite the bustling Latino economy, the weekly never found the ad dollars to sustain itself, although, Wolinsky says, "editorially, it accomplished its goals."

Unless the paper can come up with a viable alternative, the demise of the Washington Edition, a 20-some page, five-day-a-week, collection of the best of the Times, will be felt. Formatted in L.A., transmitted by satellite and printed outside Washington, D.C., the Washington Edition proved to be expensive. Although no figures have been released, the edition is believed to have cost $1 million a year.

While it lasted, the Washington Edition gave the L.A. Times a voice outside Southern California. Some 2,800 copies were delivered each weekday, early enough to make the news summaries at the White House, State Department and Department of Defense. Times stories regularly were picked up by the electronic media.

"We found the Washington Edition to be essential morning reading," says CNN's Johnson, who adds that it gave the paper "tremendous visibility." Frequently CNN would use exclusive L.A. Times stories, attributing them to the paper. "But," Johnson says, "I'm not in a position to second guess the decision making. I realize economic conditions have changed."

Ken Bode of PBS' "Washington Week in Review" says the Washington Edition brought the work of Times reporters to his attention; he had more of them on his show this past year than from any other paper.

To make amends, the paper is flying in some 350 copies daily. They don't arrive until noon, and sometimes aren't distributed until late in the afternoon or the next day. "I would be less than frank if I said it wasn't a loss to us," Nelson says.

Troubling to some is the fact that the demise of the Westside section means the affluent area that includes Beverly Hills, Santa Monica and Malibu will be covered by less experienced reporters from California Community News, a group of small newspapers owned by Times Mirror but not under the Times' editorial department. The news staff has announced it will cover people, not city council or school board meetings.

To compensate for the cutbacks, Metro now has a larger news hole (two additional pages four days a week).

Wolinsky says some of Metro's strongest reporters are being sent "voluntarily" to cover suburban areas once the domain of zoned section staffers. Many on the staff had felt the zoned editions further balkanized an already fragmented region and that consolidating the news into the main paper could be helpful to the whole community. But some news will no longer be covered.

The paper has been hard hit by the still suffering Southern California economy, reeling from the post-Cold War decline in defense contracts; the demise of major advertisers; the rise of discounters who don't buy much newspaper advertising; the continuing consolidation of other retailers; and the dramatic rise in newsprint prices. Schlosberg says the Times' newsprint costs this year may be $50 million over the previous year.

Despite the litany of woe, Schlosberg says the paper is "very profitable...just not appropriately profitable." The profit margin of Times Mirror's newspapers over the last four years sits at 8 percent – along with New York Times Co. papers at the bottom of the charts. Gannett's is 22 percent.

Times Mirror doesn't break out individual newspaper profits, and newsroom speculation holds that the paper's recent purge had less to do with its financial health than with debacles elsewhere in the $3.3 billion company.

"The Southern California economy and newsprint prices aren't the only reason this company is in trouble," says one in-house critic. "No one could say that the reporters and editors who lost their jobs, with few exceptions, had significantly screwed up. They're having to pay for other people's screwups. They weren't responsible for the bad decisions in Denver, Dallas and New York." Many Times editorial people long resented the money losing New York Newsday which, they felt, drained the corporate purse.

The L.A. Times remains the engine that fuels Times Mirror. The company's newspaper division brings in two-thirds of its total revenue, and the Times is by far its largest newspaper. The paper's profit margin, although not public information, is believed to have slipped from more than 20 percent in the late l980s to less than half that. Some analysts privately estimate today's margin is closer to 5 percent. Staffers have been told the Times ought to reach the industry average of 15 percent.

"There isn't any reason," Schlosberg says, "a quality newspaper of this magnitude should perform financially at levels below industry averages."

While declaring that Willes is a "superb cost cutter," Porter Bibb, managing director and media specialist at the investment banking firm of Ladenburg Thalmann, says the problems Times Mirror faces are the same ones other urban papers face. Newspapers' share of the advertising pie has dropped sharply in the past decade. Bibb questions the wisdom of giving up on Nuestro Tiempo, given the heavy Hispanic presence in the Times' core market.

Some editors fret over what the new mission of the Times should be or what Willes' standard of quality is. Associate Editor Narda Zacchino, who has been at the paper 25 years, says she isn't worried. Willes, she says, "is very strong on newspapers and the role of journalism in society. In any case we must realize Mark Willes isn't the L.A. Times. The publisher isn't the L.A. Times. The L.A. Times is the entire staff and we're not slacking off. Just because there's a change in CEO doesn't mean you lower your standards. All of this anxiety was terribly misplaced."

Some additional high-level personnel changes are expected at the paper. But Schlosberg squelches speculation, recently printed in Buzz magazine, that Coffey might be the next to go. "He's the finest editor I've ever worked with," Schlosberg says.

Having circled the wagons around Times Mirror Square, the landmark building the executives considered selling a year ago but decided to keep, how then does the L.A. Times expect to grow? Or does it?

"We'll grow in our core market," Schlosberg says. "I have every reason to be optimistic." In that core market, "don't forget, there are probably 38 other daily newspapers tucked underneath our newspaper with circulation equivalent to ours," he adds. "There are a lot of newspaper readers in this market."

Staffers still talk about the benevolent Chandler, whose force of personality and willingness to spend his and his family's money created one of the great papers in the U.S. Along with the New York Times and the Washington Post, it covers the world and the nation. But the families that own the Times and the Post remain in charge of the daily operations.

Rumors recently have spread that the Chandler family was cutting costs in preparation for the sale of Times Mirror. Otis Chandler had heard the rumors too. He understands how people can believe them, given the climate of media takeovers, and has had to "reassure friends in the company." But Chandler is emphatic: "The family is not going to sell the L.A. Times or Times Mirror," he says. "Absolutely not."

These days, his presence is confined to an imposing oil painting that hangs in the anteroom of the Norman Chandler Pavilion on the sixth floor at Times Mirror Square. But Otis Chandler says he has hardly "faded into the woodwork." At 67, he's retired but "not out riding motorcycles and chasing big game," as some had speculated. He does, however, still surf.

"I'm in contact on almost a daily basis. I have faxes and daily mail drops, I read our newspapers and magazines. I'm very, very interested in the future of the company and I read everything sent me as a director and other material sent because of my unique position in the family."

Reminded of his words at that awards ceremony 30 years ago, promising to make the Times the nation's finest newspaper, Chandler now says the vow was "to rally the troops. Being a competitive person, maybe I got a little too arrogant, not only that we would be the best but that we would challenge the best." Time magazine had just named the Times one of the ten worst papers in the country, he recalls. And Chandler was thinking that "if we all worked hard and smartly, we could move up the ladder.

"I think maturity and wisdom have prevailed," he says. "The Times has moved up and is considered one of the top three newspapers in the country." Is it the best? "I don't think you can compare."

As for the impressionable young journalist who remembered Chandler's declaration so long ago, Jack Nelson is expected to step aside soon as Times Washington bureau chief (he turns 66 this year), making way for heir apparent Doyle McManus. Nelson will remain in the bureau in an executive position. The move is unrelated to the arrival of Willes or the recent cutbacks.

In a July teleconference with securities analysts, Mark Willes said he expected all Times Mirror businesses to reach the industry norm for profits (15 percent for newspapers) in two or three years. "We'll then raise the bar again aiming for the top 25 percent" of performers in their industries, he added. That's better news for Wall Street than for readers.

In a recent employee bulletin, Schlosberg told his staff, "The Times is and will remain a world class newspaper. Those things won't change just because we've had to make some tough choices. On the contrary, our status as one of the world's great newspapers would be in jeopardy if we were not making these tough decisions."

A few years from now, those choices may well be a lot tougher.