June 21, 2006
By Steve Lopez
Los Angeles Times
The possibility of my newspaper being purchased by someone with no experience and no earthly idea what he's doing is quickly becoming rather appealing.
Not that I want that to be construed as a negative assessment of the current owners, who may well be the smartest executives working in corporate journalism today. I know that, because I've worked for all the major chains, one of which, Knight Ridder, will cease to exist later this month because it's run by morons.
I'm no MBA, but after 30 years in the business, I think the problem isn't necessarily the managers but the model. Newspapers and Wall Street make for a bad marriage, and I'm tired of the bickering.
For whatever reason, the standard corporate practice of slashing staff and turning first-rate products into mediocrities doesn't seem to be working. Tribune's latest plan to turn things around is to buy back a big chunk of its stock and cut $200 million out of the budget.
If it works, long live Tribune, and even the Cubs. If not, then I have a question: Who's going to be signing my checks?
Richard Riordan, the former mayor of Los Angeles, used to say he'd like to have a newspaper, so I called him up. Turns out he's over that idea.
"Because you're going down the tubes," he said, insisting the whole industry is cooked. He said he'd keep me in mind for a waiter's job at his Original Pantry cafe, but he didn't make any promises.
If we're going down the tubes, I asked Riordan, how does he explain a 20% profit margin for The Times? What other businesses rake in that kind of dough?
Wall Street, Riordan reminded me, doesn't care what you made yesterday. It cares what you made today and what you'll make tomorrow. With readers switching over to the Internet, where it's harder to sell subscriptions and ads, the future is gloomy.
I say he's wrong. I say a smart owner can put out a good newspaper and make a handsome profit, but not if he has to answer to Wall Street's insatiable appetite for more, more, more, as the Tribune directors do. It would have to be a private operation, perhaps even a nonprofit. And Riordan's pal Eli Broad, L.A.'s go-to philanthropist, was rumored to be thinking along those same lines.
Look, maybe I'm overstepping here, but rather than dangle slowly in the wind that blows out of Chicago, I thought I'd try to broker a deal. I know Broad, after all. Love the guy, and he runs everything else in town, so why not the paper?
My pal Eli was in a meeting when I called, so I rang up an old chum in Florida, Jim Naughton, a former editor at the New York Times and Philadelphia Inquirer. He also used to run the Poynter Institute, a nonprofit journalism foundation that owns the St. Petersburg Times.
Naughton said the St. Pete paper's late owner, Nelson Poynter, saw the future of corporate ownership and predicted that quality would eventually lose out to greed. So he signed over his stock to the school and established a partnership to keep the bean-counters at bay. To this day, St. Pete has one of the better newspapers in the country, and pretty good profits, to boot, all of which are kicked back into the school.
Could the same thing work in L.A.?
Most definitely, said George Rahdert, the Poynter attorney who told me similar arrangements exist in a few other cities.
"One thing it does is allow a newspaper to take the long view."
"One thing we often say here is that a journalism school that owns a newspaper is sort of like a medical school that owns a hospital. It makes a lot of sense."
So, what if the L.A. Times hooked up with the Annenberg School for Communication at USC?"
USC or Annenberg could come in," Rahdert agreed, "or the Poynter Institute, or the Peter Ueberroth/David Geffen School of Communications could come in. You'd need to set up a legitimate educational organization."
He said he'd be happy to tell Broad all about it. Now all I had to do was close the deal at this end. Champing at the bit, I left another message at the Broad Foundation, and my phone rang minutes later.
"I'd be interested," Broad said, telling me he'd given it some thought but hadn't thoroughly investigated the possibility of buying The Times. "Look, our foundation would be interested. I can't speak for Annenberg, Keck, Ahmanson. But a number of us foundations and possibly wealthy individuals who love this city would love to acquire the L.A. Times.
"So what's stopping them?"
In the past, the message we get back is that it's not for sale, thank you.
"Yes, but with the Chandler family poking sticks in the eyes of other Tribune directors, the whole thing could come apart."
If it became available, I'd be very interested in exploring it," Broad said, adding that profits wouldn't be his main priority — public service and education would be. "If you bought it and were profit-oriented, you wouldn't have the same quality newspaper that the city deserves. You'd be pushing for bigger margins and cash flow, and how far would you cut before you hit the bone?"
It was almost sounding too good to be true, so there had to be a catch.
Was Broad intending to not just buy the paper but actually run it? That could be a problem, because journalists are cranky characters who know everything and don't take direction very well, especially from outsiders.
No, Broad assured me. The owners would be shadow publishers.
The best kind.
"I don't think I'd change a whole lot," he said, although he might beef up coverage of the fine arts.
Now that's amazing.
How did Broad know I was planning a 10-part series on his art collection and massive contributions to local cultural institutions?