A New Regime

Tony O. Champagne Illustration

Last year, all eyes in the newspaper industry were focused on Southern California.The Los Angeles Times had named Austin Beutner, a former Wall Street investment banker and first deputy mayor of Los Angeles, as publisher and chief executive. Freedom Communications with Aaron Kushner and Eric Spitz at the helm were pivoting their game strategies with the Orange County Register in Santa Ana as they dealt with lawsuits, layoffs, and the shuttering of the Long Beach and Los Angeles Register. In San Diego, speculations grew if U-T San Diego owner Doug Manchester would sell the paper to local philanthropist Malin Burnham.

A year has passed, and all eyes are once again trained on these three papers, but you wouldn’t recognize the landscape. Kushner and Spitz resigned in March, handing over their duties to the new Orange County Register publisher Richard Mirman. Tribune Publishing, parent of the Los Angeles Times, purchased U-T San Diego from Manchester (which returned to its former name San Diego Union-Tribune after the sale). Then, in September, Beutner was abruptly fired from his position and replaced by Baltimore Sun (another Tribune paper) publisher and CEO Tim Ryan. Ryan was also tapped to serve as CEO of Tribune’s newly-formed California News Group.

Based in Chicago, Tribune Publishing is laying some heavy stakes in the land of sunshine and palm trees. And much like the pioneers who headed out West in search of gold and new opportunities, Tribune executives are hitching their wagons on a plan that is poised to once again change the media landscape in Southern California.

When Two Become One

When Tribune Media Co. spun off its publishing business in August 2014, it was seen as a cost-saving measure. Other media companies, such as Gannett and Scripps, had also made the same maneuver. In our March 2014 cover story (“Checkmate! The high-stakes chess game for control of the Southern California newspaper landscape”), E&P reported that both Kushner and Manchester had expressed interest in buying the Los Angeles Times.

Baltimore Sun publisher Tim Ryan was named the new Los Angeles Times publisher in September.

“Our interest is in all the Tribune papers. That has not particularly changed,” Kushner told E&P at the time.

Well, things did change—a lot.

Not so long ago, Kushner and Manchester seemed poised to take over the Times, but with both men out of the picture and the Union-Tribune now in the hands of Tribune Publishing, it will only be a matter of time before the Orange County Register and Freedom’s other SoCal newspaper, The Riverside Press-Enterprise, gets swallowed up by Tribune.

Beutner’s dismissal was just another indicator that Tribune executives had other ideas in mind for their newly-formed California News Group.

Although both Beutner and Tribune haven’t explained why he was let go, Rem Reider of USA Today speculated, “It’s widely believed that a major factor was an offer by Los Angeles philanthropist Eli Broad to buy the Times and the San Diego Union-Tribune, whose recent acquisition by Tribune Beutner had orchestrated. Beutner was a proponent of the transaction and presumably would have stayed on with the Times and Union-Tribune under Broad. Tribune wanted no part of the deal.”

Since Beutner’s ideas didn’t seem to align with Tribune’s CEO Jack Griffin, Baltimore Sun’s Ryan was brought in to run the Los Angeles paper. But Los Angelenos weren’t keen to the idea of having an “outsider” steering their daily newspaper. Beutner was embraced by readers and the community because he was a local. After his firing, Los Angeles County supervisors unanimously passed a resolution calling for Tribune Publishing to restore local leadership at the Times.

As reported in the Times, the resolution read, “The appointment of a publisher transferred from outside of the Los Angeles area, and the continued practice of having key decisions made by a body located approximately 1,750 miles and two time zones away is clearly not in the best interest of operating, growing and nurturing a local newspaper.”

Consolidation is once again the name of the newspaper game, and this time it’s the model practiced by the publishers of almost a century ago: buy the paper in the next town over. Then, buy the one in the next town from that.

This shift stems from the fact that newspaper publishing is essentially a manufacturing business. Printing and delivering thousands of copies of the paper every morning is expensive, and it’s one of the easier functions to outsource or consolidate.

As soon as Tribune bought the San Diego Union-Tribune, it began printing the paper at the Times plant in Los Angeles and delivering it through the Times’ network of drivers. More than 100 Union-Tribune pressroom workers and truck drivers were laid off as a result.

Johanna Maska, former Times vice president of marketing and communication, said the total number of departures overstates the cutbacks at the Union-Tribune. Manchester kept the paper’s real estate holdings—he leases the headquarters back to Tribune Publishing—and some of the people who left stayed with Manchester to manage the real estate or work in other arms of his business.

But what will get lost in this transition? Perhaps it will be the newspaper’s brand and identity. Expect more content to be shared between San Diego and Los Angeles as well.

“The Times has some great journalists and significant resources. They cover stories across the nation and the world — places where we have no reporters,” Union-Tribune editor Jeff Light said in an August column, announcing that Times content would be appearing in their paper. “When our editors are reviewing our options for coverage outside of San Diego, we now have one more choice. That’s a good thing…The larger benefit will come when we begin to apply more might to the most significant topics in Southern California.”

Watching this saga closely is Voice of San Diego, the all-digital nonprofit news organization. “It’s fascinating,” editor-in -chief Scott Lewis said. “As print revenue heads to the cliff, it seems like Tribune is pursuing this effort in order to build a bridge toward a digital future.”

That was the message Lewis said he felt Beutner was trying to bring to the newspapers before the publisher was fired. “What was most troubling about his dismissal was there was no patience (from Tribune),” Lewis said. “(Tribune) wanted to see more immediate profits, and now they have to start over with a new leader and a new strategy.”

Has Lewis seen a change in the San Diego paper since the sale? Although the same editorial team remained in place after the Tribune purchase, he predicts there will be a blurring of uniqueness as more content written by Los Angeles writers appears in the paper.

With so much transition in his local media market, Lewis doesn’t see Voice of San Diego replacing Union-Tribune as a primary news source nor does he want to see that happen. “It’s a better ecosystem,” he said. “We’re complimentary to each other. It’s not a death match; we’re all concerned with what’s happening in the industry.”

A New Frontier

It’s not a matter of if but when Tribune will take over the Orange County Register. The Register is a natural target for the company—in fact, the Times delivered the Register for five years until the partnership dissolved in lawsuits. Whether the Register is for sale is another question. Mirman declined a request for an interview, but there are reasons to believe the ownership group might be ready to sell.

Former Los Angeles Times publisher Austin Beutner was fired in September after one year on the job.

Under Kushner, Freedom sold six newspapers, leaving the Register and the Press-Enterprise as the company’s only dailies. Whether or not the remaining papers are sold, Kushner’s days as a potential savior of print journalism are long gone. His story—along with Manchester’s tenure in San Diego and the failure of the nonprofit consortium to buy the Union-Tribune from him—is another in a long line of publishing novices who couldn’t deliver on their promises to revitalize local newspapers.

The occasional Jeff Bezos aside, there are no saviors. The experiments with local ownership in San Diego and Orange County are just that: experiments. The overwhelming trend in the industry is toward more acquisitions by the biggest firms and more true consolidation as chains cluster their properties in regional groups.

Gordon Borrell, media analyst and CEO of Borrell Associates, said for anyone to buy a daily newspaper today is “befuddling.”

“It doesn’t make a lot of sense in the long run,” he said. “Unless you’re making a play for the customer base, if you’re going to push more digital products and offerings…It would be smart to sell those digital products in the new markets.”

With this big push toward digital predicted in the industry, Borrell said more daily newspapers will reduce their print schedule to perhaps only three times a week (and maybe even become weeklies). He sees this change happening sooner rather than later in Southern California.

Borrell said the Los Angeles Times has an advantage because it’s located in the center of the entertainment industry, but as reading habits continue to move from print to digital, he sees a daily newspaper like the Times morphing into a large, Sunday-only, glossy-style magazine. On the other hand, smaller, boutique community newspapers will thrive, Borrell said.

When this happens, Borrell doesn’t see the Register in Tribune’s media portfolio. “It will either fade away or become like the New Yorker for Los Angeles,” he said.

The Union-Tribune won’t disappear, but will also transition into a magazine-style publication, Borrell said.

Lewis couldn’t imagine a future without a local newspaper in San Diego, but he did see an end of the daily print schedule. There will be more consolidation, he said, and the days of printing a daily newspaper will be gone.

If Borrell’s predictions are true, Southern California will eventually become Tribune territory. Under its umbrella, the Los Angeles Times and the San Diego Union-Tribune will scale back to become glossy magazines, and the Orange County Register will be no more. If consolidation continues, Southern California readers may only be left with one news product: will it be named Los Diego Times or the San Angeles Union-Tribune?

This new game plan in Southern California might not be the final solution for Tribune though. The Union-Tribune reported that its new parent company borrowed $70 million to buy the paper, bringing their total long-term debt to $386 million in the quarter.

So, was purchasing the Union-Tribune a smart move for Tribune Publishing? Borrell’s answer wasn’t a flat out no, but he said it could be seen as smart especially if their big play is growing their digital audience and online revenue.

“Tribune has always been a smart company when it comes to digital,” he said, citing their investments in AOL and the creation of Tribune Interactive.  “I wouldn’t count them out yet.”

Editor's Note: The owner of the Orange County Register, Freedom Communications, recently filed for bankruptcy and Mirman has announced an effort to make a bid for the newspaper company.