Table of Contents Title Page Dedication Preface Introduction Chapter - Beginnings: Des Moines Chapter - Across the Street Chapter - Otis Chandler’s Legacy Chapter - Twilight Chapter - The New Order Chapter - The Cereal Killer Chapter - His Seat on the Dais Chapter - Inside the Merger Chapter - Making News Chapter 10 - A Changing Landscape Chapter 11 - Market-Driven Journalism Chapter 12 - Buy the Numbers Chapter 13 - Count Kern Chapter 14 - Civil War Chapter 15 - Up Against a Saint and a Dead Man Chapter 16 - Before the Fall Chapter 17 - The Penguin Parable Chapter 18 - Closing the Deal Chapter 19 - Zell Hell Epilogue Acknowledgements NOTES INDEX Copyright Page To the journalists who made the Chicago Tribune and the Los Angeles Times great newspapers PREFACE THIS IS NOT a book I wanted to write Soon after being fired as editor of the Los Angeles Times in early 2008, numerous friends called and told me I should write a book about my experiences over the years I must confess that I had often thought about writing a book about the business I loved I even kept a diary recording my experiences in Los Angeles in case I wanted to reconstruct some of the events for a book But I always thought my newspaper book would be a novel In 2008, after several bruising years on the front lines of the newspaper wars, I had decided to put the whole thing behind me and try something else—maybe help with a political campaign or take various menial jobs to write a book about work in America Or maybe resume my interest in photography or ride my bike from Belfast to Beirut Then I began thinking that no one had reported and written about the troubles confronting my craft from the perspective of a working journalist And that’s what this book is—a view of the media maelstrom from a journalist who worked in the trenches for more than three decades and loved every minute of it I make no apologies for my biases, and I make no excuses for the fact that I am first and foremost a reporter As I began thinking about the disaster that has struck newspapers, I realized I really didn’t know what had happened, even though I had a front-row seat running the newsrooms of two major American newspapers, the Chicago Tribune and the Los Angeles Times If we really don’t know how we got into this mess, I wondered if anyone could ever figure a way out So I set out to report and write exactly what happened, without fear or favor It would be easy to condemn the people who caused this modern tragedy as venal and evil Thousands of friends and colleagues the world over have lost jobs because of the way the industry has been managed Some were venal, all right But most of the people who led newspapers to this point in history were smart and thoughtful They thought they were doing the right thing, and that’s what makes the story of what happened so terrifying It shows this disaster could happen to anyone in any industry Please visit thedealfromhell.com for pictures, videos, author interview, and more information about The Deal From Hell INTRODUCTION The Merger In April 1999, John Madigan walked decisively into the lobby of the Hotel del Coronado Tall, imposing, and impeccably dressed, the Tribune Company CEO arrived at the red-turreted hotel as a star-studded guest list of some 1,200 publishers, consultants, and experts gathered for the national Newspaper Association of America (NAA) annual meeting Seasonably cool temperatures chilled San Diego, as Madigan, head of the company that published the Chicago Tribune, bypassed the parlors and lobbies where publishers traded industry scuttlebutt about the story of the day, the evolving coverage of two Littleton, Colorado, students who had opened fire on classmates at Columbine High School But the Tribune chief hadn’t flown to San Diego merely to gossip or to hear luminaries like former President Gerald Ford, talk-radio host Dr Laura Schlessinger, or Sergio Zyman, Coca-Cola’s marketing guru, speak to newspaper publishers Madigan had set up a private meeting with Mark Hinckley Willes, the CEO of the Times Mirror Company At six-foot-five, well groomed, and trim, Madigan has a chiseled face that could be on Mount Rushmore A Tribune “Show doctors” (media consultants) Shriver, Maria Sidley Austin law firm Simon, David Simpson, O.J Sinclair, Upton Sito, Louis Six Flags Entertainment Skadden & Arps Sloan, Allan Smith, Ed Smith, Richard Norton Smith, Scott Solomon, Digby Solvency opinion Soriano, Alfonso South Florida Sun-Sentinel Spears, Britney Springer, Jerry Spring Street Project Squires, Jim St.John’s Law School St Louis Post Dispatch St Louis Star Stanford University Stanton, Russ Staples scandal Stephens, Mitchell Stern, David Stewart, Potter Stinehart, William Stock buyback, Times Mirror Stone, W Clement Strikes, newspaper Stumbo, Bella Subprime mortgage meltdown Sulzberger, Arthur Sulzberger family See also New York Times Sunday opinion section, Los Angeles Times Super-voting status, of Chandler stock Syndication Synergy T Taft, Robert Tax avoidance schemes Tax cuts, in Reagan presidency Teamsters Union Technology, newsroom Television newscasts newspapers affected by “vast wasteland” comment on “watchdog” reports on “Ten for Ten” programs Thomas, Bill Thorpe, Caroline Time Inc Times Mirror Company See also Chandler family; Merger, of Chicago Tribune and Los Angeles Times Times-Picayune (New Orleans) Time Warner Corporation Toolen, Sean Transformative change Traugott, Michael “Trial and Error” series on death penalty cases, in Chicago Tribune Tribune Broadcasting See FitzSimons, Dennis J Tribune Company See also Merger, of Chicago Tribune and Los Angeles Times Tribune Interactive Twarowski, Chris Two percent list, of ABC Tyner, Howard U Unions United Media Distributions, Inc United Nations University of Chicago University of Illinois University of Iowa University of Michigan University of Missouri School of Journalism University of Southern California (USC) Unterman, Tom U.S Postal Service USA Today V Valuation Research Corp (VRC) Van, Jon “Vast wasteland,” television as Viacom International Volcker, Paul Vonnegut, Kurt Vreeburg, Elisabeth W Wagner, Robert F Wall Street impact on newspaper industry Wall Street Journal on Chicago Tribune children’s charities investigation Gartner hired from Murdoch’s acquisition of O’Shea’s firing in page one ads in Pearlstine at as publicly held corporation Wall $treet Week (Rukeyser) Walsh, John Walt Disney Company Walt Disney Concert Hall Walter, John Ward, Arch Warner, Jack Warner Bros TV Warner-Lambert, Inc Warren, Earl Warren, Jim Washington, Harold Washington Post Bennett at Graham family’s purchase of layoffs at as publicly held corporation Pulitzer Prize for Watergate story Schwartz at stature of Washington Times Herald “Watchdog” reports, television Watchell & Lipton law firm Watergate scandal Weinstein, Henry Weinstein, Jack Weinstein, Moses “Mo,” Welch, Robert WGN Whayne, Thomas Whistle blowers Willes, Mark Hinckley assets sold by as BusinessWeek “Manager to Watch in 1996,” Chandler family recruitment of Chandler family tension with circulation increases by consolidation pressure and consultant use by job reductions by on journalistic and business separation Madigan’s meeting with political activities of price reductions by Wolinsky’s meeting with See also Merger, of Chicago Tribune and Los Angeles Times Williams, Griff Williamson, Fred Willman, David Winchell, Walter Wire, The (Simon) Witt, Howard Wolinsky, Leo background of on Baquet budget cuts after Zell deal by City County desk and as city editor firing of Geffen’s meeting with Hiller’s discussion with Hiller’s query about journalistic standards of Los Angeles knowledge of Los Angeles Times career of merger view of production knowledge of on synergy issues on Willes workplace changes and Women’s Wear Daily Wood, Frank Wood, Henry Woodward, Bob World Vision U.S Wright, Jim WTTW public television Y Yahoo.com “Yellow journalism,” Z Zamora, José Zeleny, Jeff Zell, Sam acquisition debt sale issues background of Chandler stock sale and Chicago Tribune bid of as Chicago Tribune investor cost cuts required by cutbacks of ESOP use by FCC approval and FitzSimons’ relationship with Hiller’s relationship with investment banker interest in Lipinski’s meeting with Orlando Sentinel visit of plans of profane language of solvency opinion and staff decisions of “Talk to Sam” initiatives as Tribune Company chairman Tribune Company consideration by Tribune Company revenues and Zimbalist, Efrem (Skip) Zocalo cultural forum (Los Angeles) Zoned local sections Zoning strategy for local news Zuckerman, Mort Zyman, Sergio Award-winning journalist James O’Shea is former managing editor of the Chicago Tribune and past editor-inchief of the Los Angeles Times , the nation’s largest metropolitan daily He is the founder and editor of the Chicago Newspaper Cooperative O’Shea has twice won both the Sigma Delta Chi Distinguished Service Award for Washington Correspondence and the Peter Lisagor Award from the organization’s Chicago chapter His honors also include the Associated Press Managing Editors’ Public Service Award and the National Education Writers Award Under his leadership, the Tribune’s news staff received six Pulitzer Prizes (Photo: José Moré) PUBLICAFFAIRs is a publishing house founded in 1997 It is a tribute to the standards, values, and flair of three persons who have served as mentors to countless reporters, writers, editors, and book people of all kinds, including me I F STONE, proprietor of I F Stone’s Weekly, combined a commitment to the First Amendment with entrepreneurial zeal and reporting skill and became one of the great independent journalists in American history At the age of eighty, Izzy published The Trial of Socrates, which was a national bestseller He wrote the book after he taught himself ancient Greek BENJAMIN C BRADLEE was for nearly thirty years the charismatic editorial leader of The Washington Post It was Ben who gave the Post the range and courage to pursue such historic issues as Watergate He supported his reporters with a tenacity that made them fearless, and it is no accident that so many became authors of influential, best-selling books ROBERT L BERNSTEIN, the chief executive of Random House for more than a quarter century, guided one of the nation’s premier publishing houses Bob was personally responsible for many books of political dissent and argument that challenged tyranny around the globe He is also the founder and was the longtime chair of Human Rights Watch, one of the most respected human rights organizations in the world For fifty years, the banner of Public Affairs Press was carried by its owner Morris B Schnapper, who published Gandhi, Nasser, Toynbee, Truman, and about 1,500 other authors In 1983 Schnapper was described by The Washington Post as “a redoubtable gadfly.” His legacy will endure in the books to come Peter Osnos, Founder and Editor-at-Large Copyright © 2011 by James O’Shea Published in the United States by PublicAffairs™, a Member of the Perseus Books Group All rights reserved No part of this book may be reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews For information, address PublicAffairs, 250 West 57th Street, Suite 1321, New York, NY 10107 PublicAffairs books are available at special discounts for bulk purchases in the U.S by corporations, institutions, and other organizations For more information, please contact the Special Markets Department at the Perseus Books Group, 2300 Chestnut Street, Suite 200, Philadelphia, PA 19103, call (800) 810-4145, ext 5000, or e-mail special.markets@perseusbooks.com Book design and production by Eclipse Publishing Services Library of Congress Cataloging-in-Publication Data O’Shea, James ( James E.) p cm Includes bibliographical references and index eISBN : 978-1-586-48865-9 O’Shea, James ( James E.) Journalists—United States—Biography Newspaper editors—United States—Biography Los Angeles times— History—21st century Newspaper publishing—California—Los Angeles —History—21st century American newspapers—Ownership Press monopolies—United States I Title PN4874.O785A3 2011 071’.3090511—dc22 2011009204 ... Tower’s walls Among them were pieces from the Alamo, the Berlin Wall, the Taj Mahal, and even Abraham Lincoln’s tomb The Colonel and his successors had the building’s facade engraved with the wit and. .. into the Tower walls At the top of page one of the paper, the Colonel immodestly anointed the Tribune The World’s Greatest Newspaper.” The paper played a seminal role in the founding of the Republican... into the company’s balance sheet To a large degree, the Tribune set the financial standard by which newspapers would be judged, both by other publishers and by Wall Street analysts By the time the