Otis Chandler reloads in trying Times

By: Lucia Moses 'You can't run a company Based on Wall Street,' Legendary L.A. newsman tells E(and)P

Former Los Angeles Times Publisher Otis Chandler told Editor (and) Publisher that he believes the Staples Center sports arena deal wasn't the first secret business arrangement struck by the L.A. Times.
Chandler said he learned this in talking with L.A. Times Media Writer David Shaw, who is writing an assigned investigative piece about the controversial ad revenue-sharing arrangement.
Chandler didn't elaborate on his claim about previous deals, and Shaw denied telling Chandler anything about deals. Shaw also denied that he told Los Angeles New Times that he's found "no other examples of profit-sharing," as the alternative reported.
Chandler's conversation with E(and)P was his first public interview since he wrote a five-page letter Nov. 3 calling the deal "unbelievably stupid" and at tacking 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 de-
clined to be interviewed, citing Shaw's 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. He and others are anxiously waiting to see what Shaw reveals. They won't have long to wait: Shaw has set a goal of finishing by Christmas. n
For related coverage, see "Cover Story," Page 20.
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(copyright: Editor & Publisher December 11, 1999) [Caption]