Otis Chandler: 'You Can't Run A Company Based on Wall Street'

By Greg Mitchell
Published: February 27, 2006 11:15 AM ET

NEW YORK Otis Chandler, the legendary publisher of the Los Angeles Times who passed away today at the age of 78, had been out of the limelight for many years—first by choice, then due to illness. His last major fight was in raising hell about what happened at his family’s old newspaper in 1999, when news about the ethically challenged “Staples Center” deal surfaced, leading to a full shakeup on the business side of the Times.

Chandler talked to E&P’s Lucia Moses exclusively several times during that crisis. One of her stories, from Dec. 11, 1999, reprinted below, captures him, and the role he played, well. “You can’t run a company based on Wall Street,” he said.

Otis Chandler, the longtime publisher of the Los Angeles Times, spoke with E&P this week in his first interview since he wrote a five-page letter Nov. 3 calling the Staples Center deal "unbelievably stupid" and attacking the current management of the paper his family ran for most of the past century.

Chandler said he didn't expect his protest to have any impact beyond lifting morale in the newsroom, where he is lionized as the publisher who brought respectability to the paper during his stewardship from 1960 to 1980.

"I was just addressing it to the editorial staff to let them know at least this former publisher is aware of what's going on there," he said. " … I don't think they'll do anything about anything I would say or any former publisher would say."

He also bristled at Publisher Kathryn M. Downing's response to his memo, in which she called Chandler an "angry and bitter old man," according to New Times. (New Times reported the L.A. Times removed the word "old" from her quote before publishing it.) 
"I'm old, but I'm not bitter," sniffed the 71-year-old Chandler. "I'm very optimistic the Times can regain its position."

The deal called for the paper to share 2 million dollars in revenues with the Staples Center from the Oct. 10 Sunday magazine issue whose sole subject was the arena. Editors said they didn't know of the deal until after the issue was printed. It crystallized journalistic fears over the growing coziness between the traditionally separate news and business sides at newspapers around the country, but perhaps most notably at the L.A. Times.

Downing admitted a misstep, chalking it up to her lack of prior newspaper experience. Mark H. Willes, CEO of the L.A. Times' parent Times Mirror Co., expressed his confidence in her and restated his support for closer cooperation between news and business. Both have declined to be interviewed, citing David Shaw's in-house investigation.

When Willes was hired four years ago, Chandler, then a Times Mirror board member, said he found the former General Mills executive bright, and had high hopes for the company's future under Willes. Since then, Chandler has watched disapprovingly as Willes has cut staff and broken down the editorial-business wall to boost company profits and its stock price.
"It had been coming for some time, and I've been sitting on the sidelines and just hoping things would work themselves out," Chandler said of his decision to write the Nov. 3 letter.

Chandler said a plan such as the Staples Center deal would have been unthinkable when he was publisher. "We never split profits, kept things secret. This is unheard of, a secret deal." His concern mounted earlier this year when Times Mirror announced plans to sell some of its professional information units, citing poor performance.

"I think the company is at risk if there were a downturn," he said. "I think it's putting a lot of your eggs in one basket. Newspapers … are not a growth industry anymore."
Chandler may be unhappy, but Times Mirror's shareholders aren't. The stock price has nearly doubled under Willes' direction, and the L.A. Times is expected to have its highest ad revenues ever this year.

Chandler allowed that the share price has been good, but said half the credit goes to the improved economy. He also conceded the board of directors, including three of his cousins, may not share his concerns. 
"They look to the price of the stock, and that's their sole criterion," he said. "Wall Street always wants to know: What are you going to do for me tomorrow? They really don't have much of an interest in long-term planning.

“You can't run a company based on Wall Street."

Since his letter became public, Chandler said people have come up to him on the street to thank him for taking his stand, and numerous media outlets, including "60 Minutes," have requested interviews. He turned them down.


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