New Owners, Lowered Vision, Dropping Circulation

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LOS ANGELES (AdAge.com) -- The wide-screen scope of Los Angeles' sprawl is best appreciated from a poolside bar in the Hollywood Hills. Or atop a building
.. Photo: Cat Gwynn
Otis Chandler, 73, amidst his collection of cars and hunting trophies.
overlooking the seedy low-slung structures clustered in the shadow of its downtown. Or in the small cafes and taco stands catering to groups within a multidimensional mosaic -- its Little Armenias and Little Tokyos, its South-Centrals and its Silver Lakes.

Or at nighttime from the serpentine canyon creep of Mulholland Drive, city lights fading into haze, coyotes of yore howling and Santa Anas blowing. There, as Hollywood might put it, one can stare deep into Los Angeles' distances, deep into all that the city has fed upon: reinventions and miscegenations, dreams and shady deals.

"You can be what you want out here," says Otis Chandler. "You can be as public or as private as you want." A prototypically inner-driven native Angeleno, he achieved mythical status in part by being a newspaper executive who surfed, raced cars, shot big game. At 73, he terrifies younger riders when he plops them on the back of his motorcycle.

Savior of the L.A. Times
But perhaps the boldest challenge Mr. Chandler conquered was simultaneously being family scion and savior of the Los Angeles Times.

For a good chunk of the 20th century, the dark deals that built Los Angeles were unabashedly

Photo: AP..
Smudged by smog, Los Angeles sprawls outward in this 1962 view.
abetted by the Times and his ancestors who ran it. The water scam that Roman Polanski built the film Chinatown around? The Chandlers were in on it and made a tidy bundle once the water flowed.

These days the window on the region for Otis Chandler is his vintage car museum in Oxnard. From there it's 50 miles to the conjoined Times buildings downtown.

There, busts of Mr. Chandler, his father, grandfather and great-grandfather still preside over the lobby, but their empire is gone. Times Mirror Co.'s $8 billion sale to Tribune Co. closed last June. The sunlit top-floor offices that formerly housed company headquarters resemble a well-appointed ghost town.

Today, the famously prickly Mr. Chandler is calm as he sits in his Oxnard office, gazing out the window to the mountains in the distance. The Staples Center fiasco of 1999, in which ad revenue from a Los Angeles Times Magazine special devoted to the downtown arena was shared with it, and the controversial stewardship of Mark Willes,

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The Los Angeles Times building, an icon of power and history.
Times Mirror's last CEO, are behind him. Mr. Chandler's beloved paper has found a safe home.

"A wonderful publisher and editor," he says of John Puerner and John Carroll. "I've seen nothing but positive moves by the Tribune."

But every deal has its price. Tribune hasn't made wholesale cuts in the Times' 1,200-plus news staff and hasn't cut the news hole -- it's expanding, says Carroll, the paper's highly regarded.

No, the trade-off is subtler. All the Times gives up are the loftier ambitions it dared dream in headier days.

The problem the Times faced, and still faces: After having all but built Southern California as we know it, how does the paper cover it?

'Most complex newspaper in America'
"My guess is the L.A. Times is the most complex newspaper in America," says Shelby Coffey, who edited it from 1989-97, citing the "extremely heterogeneous nature of the market." The 2000 census revealed Latinos now are the plurality group in Los Angeles County, and greater Los Angeles' 16.4 million residents lack a majority ethnicity. "An increasingly diverse place overall, but one separated

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Former Times editor Shelby Coffey: 'The most complex newspaper in America.'

into racial and ethnic enclaves," wrote Times reporter Matea Gold.

That partly explains the Times' peripatetic recent history.

The only rivals to its formidable million-plus daily circulation -- The New York Times, The Wall Street Journal and USA Today -- have all long settled into comfortable roles within the national media landscape: respectively, the paper of record for the national elite, the paper of record for business and America's hometown daily.

Not so for the Los Angeles Times, which spent years discussing where to go. Beginning in the early 1990s, it started, killed and revived a small-scale Eastern edition -- now its national edition. (The Times does not divulge the national edition's circulation, but an analysis of a detailed Audit Bureau of Circulations report for March 2000 reveals circulation of about 6,600 in key out-of-state markets.)

In 1998, the Times began its most recent unsuccessful bid for the hyper-local space, with 14 editions of Our Times.

Even after a San Diego edition was folded in 1992, sundry Western editions were explored. Past Times executives downplay the seriousness of such discussions, but Leo Wolinsky, a 24-year veteran of the paper and currently deputy managing editor, says, "At one point, I know we leased space much bigger than our needs" in San Francisco, expecting staffing increases. "We had to walk away from it."

Similarly, Ron Brownstein, a star Times political writer, was asked in the late '90s to speak at an advertisers meeting in Seattle. The paper anticipated extended national distribution there -- which, like the meeting, never happened.

Kept 50 rifles at the office
Some of the ambitions are embedded in the daily's psyche. In the memorable phrasing of author David Halberstam, at the Times of old the publisher still had mud on his boots; Mr. Chandler's great-grandfather Harrison Gray Otis kept 50 rifles at Times headquarters while some of the dailies it now measures itself against had already begun plumbing Eastern cosmopolitanism.

Even today, there's an odd inferiority complex at the Times -- especially odd considering the paper boasts 25 Pulitzer Prizes, 21 of them since Mr. Chandler's tenure began in 1960. Accounts within the paper itself and conversations with current and former staffers frequently reveal the curious characterization of the Times as "one of the three or four best newspapers in the country."

As L.A. newcomers, key top executives at the Times -- Mr. Puerner, Mr. Carroll and General Manager Jeff Johnson -- lack such baggage.

Mr. Puerner insists the Times will still compete with its East Coast doppelganger -- journalistically. For now the L.A. Times' focus is on the city's five counties, Orange, Ventura, Riverside, Los Angeles and San Bernardino. That's 34,000 square miles -- bigger than the state of Maine, but still less than the Santa Barbara-to-Mexico swath that was once the shorthand for the paper's base, one that's still suggested by Mr. Chandler.

Intriguingly, though, Mr. Puerner hints there could be new markets worth expanding into. (Observers say the smart money's on distributing the national edition in Seattle, and possibly broadening distribution in San Francisco.)

Ad volume down
But the economy won't help. Like many major dailies, the Times' ad volume is down. Through March, its total ad revenue fell 8% from the previous year, and Mr. Puerner says the local economy was "feeling for the bottom."

Still, Tribune is banking on increasing Times profit margins by about a point a year, which should lift them to the mid-20s by 2005. Given the economy and such goals, Wall Street, which Tribune has cultivated assiduously and which regards the company as an industry darling, likely won't thrill to expansive thinking. "This would be a really tough time" to enter new markets, says Lauren Rich Fine, an analyst with Merrill Lynch & Co. Nor are advertisers convinced. "I am just not sure how many people in Seattle or Cincinnati are going to be picking up the L.A. Times for the L.A. point of view on the world and nation," says Monica Caro, chief media officer at Omnicom Group's TBWA/Chiat/Day.

The go-go years for the Times that spurred its wilder ambitions came in the 1970s and '80s, before the early '90s recession drove margins down to low single digits. Mark Willes' years as Times Mirror's last chairman-CEO, from 1995-2000, also did not lack for grand visions. Among other things, Mr. Willes wanted to increase Times circulation by 500,000 and said -- in a phrase that rapidly cliched -- he wanted to blow up the wall between business and editorial with a bazooka, if that's what it took.

Then came Staples
But then came Staples. Now a professor at Brigham Young University, Mr. Willes declined to comment for this story. Last November, at a regional newspaper conference, he waxed defiant in Staples' wake, demanding, "If we were not tampering with journalistic independence, what was all the fuss about?"

At his understated office, Mr. Puerner, in shirtsleeves and a simple striped tie, characterizes his approach as "back to basics."

It's underscored by his everyman appearance. Broad-shouldered and plainspoken with a slight Midwestern twang, the former publisher of the Orlando Sentinel is straight from Tribune central casting for low-key, ultra-reliable executives. Mr. Puerner comes off as the anti-Willes, steady where Mr. Willes was a dervish; an experienced presence, not a package-goods guy.

"As a career newspaper guy, there's only so many ways I know how to do something," Mr. Puerner says. He's careful to call his yearlong tenure a work in progress. Still, he's revamped top management -- moving from a structure organized around regions to one around departments-brought in Mr. Carroll and scrapped Our Times.

'Global and national vision'
"We have backed away from block-by-block coverage," Mr. Puerner says. In its conceptual place is, to borrow Mr. Carroll's coinage, "a major metro paper with a global and national vision, but a strong regional touch."

"Our strength," Mr. Puerner continues, "is covering the big, what I call slow-moving, stories that no one else can."

Outsiders support Mr. Puerner's reasoning. "That's not what people buy the L.A. Times for," Jack Klunder, a top circulation executive at the Times until 1996 who's now a VP for the rival Los Angeles Newspaper Group, says about Our Times. Mr. Klunder says when earlier Times attempts at heavily zoned local editions ended, there was no impact on circulation.

125 layoffs
Mr. Carroll is reworking metro coverage, with revamped sections due May 6. The shuttering of Our Times resulted in 125 layoffs, and staffers fear the ax will swing again. A Tribune executive during an April 18 conference call with analysts said that "we see further [job] reductions" throughout the company "through a number of different actions."

Thus far, Messrs. Puerner and Carroll's stewardship has won plaudits throughout the industry, and calmed some vocal critics of Mr. Willes. The two understand newspapers, says Henry Weinstein, a veteran reporter at the Times, "which is something their predecessors could not be accused of."

"The former management did some pretty inefficient things to boost circulation," says Kevin Gruneich, an analyst with Bear Stearns, New York, "from dropping the newsstand price to 25¢ to some very costly marketing efforts like door-to-door [subscription sales]. Unbelievable."

The single-copy price is now 50¢ again, and an unproductive promotion with Spanish-language paper La Opinion has ended. Tribune inherited a 50% stake in La Opinion when it bought Times Mirror.

Mr. Willes' obsession with growing circulation -- unusual today -- was in keeping with boom-time Times thinking. Up until the recession of '91, Mr. Klunder says, "the strategy was to grow" circulation, period.

Psychologically, the 1 million figure has been important to the Times. Even today, the Times emblazons its circulation above the fold on its front page. Tribune won't share that circulation obsession, says Steve Barlow, an independent newspaper consultant.

Mr. Klunder estimates that, in response to heightened profit demands, the Times' circulation number will ultimately drop to around 850,000 or 900,000. "I would be very surprised," he says, if Times circulation later this year "will be much above 950,000." (Just-released Audit Bureau of Circulations figures for the six months ending March 31, however, show the daily Times circulation at 1,058,494 -- down some 53,000, but a spokeswoman said were it not for ending the La Opinion promotion and changing how the Times reports circulation, the daily would have posted a gain of several thousand.)

"We don't have [Mr. Klunder's circulation range] as a target," says Mr. Johnson, though he adds, "You've got to be willing to go through those kinds of changes."

Less lofty dreams after sale
Simply put, the Times' earlier dreams -- unrealistic as some were -- are chastened in the wake of the Tribune deal. Expansion is a tough sell. Not only does management no longer wish to double circulation, it's now likely the Times' numbers will trail top-tier Eastern rivals.

Up in Oxnard, Mr. Chandler is steely as ever in endorsing Tribune leadership. Only occasionally does his facade crack. Circulation? "I'd hate to see it go under a million," he says. "I don't know what the Tribune will do."

Despite geographical disadvantages, despite the vast distances of its home terrain, despite its years being a shrill sheet touting the Chandler agenda, Otis Chandler made the Times one of the nation's great dailies.

But times -- capital and small "t" -- have changed. There were profit demands when Times Mirror became the first publicly traded newspaper company in 1964, Mr. Chandler insists. He's right. But those demands are sterner today. What does that mean for the conflict between newspapers' traditional mission and the race for profits?

Mr. Chandler momentarily pauses. "I don't think I have an answer," he says. "I am worried about it, and I am sad about it.

"It is a different world today."

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