Zell to L.A. Times: Drop Dead

TAGGED AUTHORS

James O'Shea

TAGGED BOOKS

The Deal From Hell




Zell to L.A. Times: Drop Dead by Laurie Winer

The book is a reminder that whenever you think things can’t get worse, they can. They can get much, much worse.

November 9th, 2011 reset - +

SINCE IT SEEMED IT COULDN'T get much worse, Los Angeles Times editor-in-chief James O'Shea decided to look on the bright side. It was 2007, and the newspaper had a new owner. He was Sam Zell, an iconoclast, as they call rich older men who ride motorcycles and wear leather jackets, whether they look good in them or not. Maybe Zell would be iconoclastic in the right way, you know, odd but decent and smart, useful, so O'Shea phoned the Chicago businessman about giving the Times an in-person interview. Zell agreed. O'Shea then offered to pick up his new boss at the airport. Zell declined, informing O'Shea that his personal jet could easily deposit him near his beach house in Malibu.

When Zell called back an hour later, the polite part of their relationship was already done. Zell informed O'Shea that he would, in fact, fly into LAX and make himself available to reporters at an office there. "I was going to invite all of you to come to my house in Malibu," said Zell — for the second time indicating his address — "until you sent a fucking reporter up there and scared the shit out of my housekeeper." Zell wanted it conveyed that he traveled in an entirely different social sphere than O'Shea. "Let me tell you something," he continued in his distinctive rasp. "You want to talk to me, call me and I'll talk. But you don't fuck with my employees. Got that?" O'Shea immediately apologized, even though he wasn't sure what for.

And so began the improbable last chapter in the fall of a major newspaper, as chronicled by O'Shea in The Deal from Hell: How Moguls and Wall Street Plundered Great American Newspapers. Among other things, the book is a reminder that whenever you think things can't get worse, they can. They can get much, much worse.

I was there, at the paper, working at the magazine, with a good critic's seat, up close and on the aisle. As we were living it, we knew this tawdry drama signaled yet another sea change for newspapers, with potentially devastating consequences for our democracy. It was also, thanks to Zell and his cronies, more entertaining than it had any right to be.

The end of the story is in the beginning. But where is the beginning? Orwell aside, let's say it was 1984.


1984-1992


That year was a numerical high point for newspapers. Americans purchased 63.3 million of them a day. James O'Shea was happily employed at the Chicago Tribune's Washington bureau. Sam Zell, having made hundreds of millions of dollars in real estate, was busy finding ingenious new ways to avoid taxes. He was at the right place at the right time: regulations were falling away like leaves in autumn. He began acquiring companies that had recently emerged from bankruptcy. Using an accounting loophole called "tax-loss carry-forward," he could dodge taxes for years on these companies. (This was preferable to rigging real estate transactions through a bank in the Bahamas, a move that almost landed Zell in jail in 1977. He avoided prison by testifying against one of his lawyers, who also happened to be his brother-in-law, and who subsequently served two years for tax evasion.)

By 1984, the economy had recovered from Paul Volcker's stop-go recession, and President Reagan was busy cutting taxes and deregulating the savings and loans and other industries. The mood of the time was pleasure grabbing and hedonistic, not unusual for easy-money eras. On the coasts, people of means kept bowls filled with cocaine they would bring out for company. Finance was thriving. The Wall Street guys smelled of lime cologne, their suits crisper, their hair shinier, and their restaurants more theatrical than anything we had seen in a long time. They said we would all benefit from their windfall, and it seemed like maybe we all would, even if those of us working at our first, low-paying jobs had no idea how.

There was some trickle-down. Expense accounts were plush, and parties given by institutions like the New York Public Library, or the Public Theater, were pretty spectacular: huge affairs in glittering high-ceiling rooms with armies of waitstaff, flowing champagne, and shellfish piled on tiered trays. A girl could party like a 19th century duchess and then take the F train home to Brooklyn to find a man leaning against her front door sucking on a crack pipe.

We were experiencing a suspicious boom. Curiously the rising tide did not lift all boats but diverted a few to the yacht club while tossing most out to sea. The numbers tell the tale: From 1979 to 2007, the richest one percent of Americans saw their income grow by an average 275 percent. The poorest saw an increase of 18 percent. In those heady days of the eighties, when the party was just getting started, even newspaper owners were not immune to "that most natural instinct of capitalism," writes O'Shea. "They succumbed to the desire to make cash machines out of cash registers." 

Thanks in part to new printing technologies first introduced in the 1950s, technologies that kept getting cheaper and easier to operate, newspapers saw profits increase for several decades. By 1984 the IRS was bringing bigger estate taxes to bear, and it was a good time to cash out. Family-owned daily newspapers by the hundreds converted to public stock corporations and sold to chains like Gannett, Thompson, or Knight-Ridder. The Chandlers of Los Angeles held out longer than most, selling Times Mirror to Tribune in 2000.

Meanwhile, broadcasting, too, was booming, thanks to a lobby that had worked hard and spent much to loosen restrictions on a formerly tightly controlled industry. In 1993, Zell, always looking for the next big loophole, scooped up a struggling Cincinnati company called Jacor that owned 17 radio stations. He hit it off with Jacor's broadcasting head, a former shock jock named Randy Michaels who had switched over to management, and who shared Zell's love of the blue joke. When President Clinton passed the 1996 Telecommunications Act, which lifted many caps on ownership, Zell was ready. He and Michaels went on a spending spree, increasing their flock to 134 stations and eventually to 230, making it one of the largest broadcasters in the country. When Zell sold Jacor to Clear Channel in 1998, he reportedly made $1 billion on his initial investment of $70 million.

Zell was not alone. Other entrepreneurs raced to gobble up radio and TV stations as well as newspapers, turning them into media companies. Most of these men had no romantic feelings about the profession of journalism, and they certainly had no use for journalism's highest purpose — that is, in the pithy words of Chicago newspaperman Finley Peter Dunne, to comfort the afflicted and afflict the comfortable.


1992-1999


In 1992, just as Zell was entering the radio world, newspapers were showing signs of strain. Times Mirror reported its first net loss ever. The paper had held steady and even grown after the retirement of its great publisher, Otis Chandler, in 1980. Even with Otis and seven other Chandlers on its board, the Times didn't have a powerful person at the helm looking out for its interests; instead it had many people jockeying and looking out for their own interests. In a way, the Chandler family and its lawyers became the paper's worst enemy. They tried, and succeeded in, turning cash registers into cash machines. When Times Mirror sold its cable television division, which had generated 36 percent of its operating income, for $2.3 billion in cash and stock in 1994, the profit did not go back into the paper. The deal was structured to pay out the profits as dividends to the Chandler descendants, of which there were now 170, many of whom did not live in Los Angeles, and none of whom were interested in running the paper. All other shareholders faced a dividend cut, which caused them to feel defrauded and to sue.

In order to generate more profit, in May 1995 the Chandlers, who had managed the paper practically since its inception in 1882, brought in a new CEO. (Though the family owned 28 percent of the company's shares, their stock was worth 10 votes per share, allowing them to dictate policy.) They picked Mark Willes, who had been COO of General Mills where he had a reputation as a strict financial disciplinarian. His only experience with newspapers was as a reader of The Wall Street Journal. He immediately pulled the plug on New York Newsday and slashed jobs in Los Angeles. He did what was asked of him; as reported by O'Shea, within months he raised the stock price from $18 to $30 and eventually to $70.

Willes liked his new job. Almost immediately he threw a lavish party in Sacramento where he met senators, legislators, and even the future Governator. He rented Gulfstream jets and enjoyed a private car and driver. Very soon publisher Richard Schlosberg stepped down to, get this, "spend more time with his family." In September of 1997, during a secret board meeting held while Otis Chandler was hunting in Alaska, Willes named himself publisher of the paper, an act that infuriated the Chandlers still on the board.

Willes's salary of $13 million a year validated his belief that he was bringing business acumen to a troubled industry. A lifelong Mormon, he had a demeanor so gentle and bland that, if you met him twice, you still might not be able to describe his hair color. After endowing himself with the title of publisher, Willes met with the staff in a series of lunches. I was at one of them, being the theater critic at the time (like Swee' Pea from the Popeye cartoon, I seemed always to be blithely wandering through the newspaper during moments of crisis). We sat at a long table, about 20 of us, while Willes held forth. He told us a story about how an idea of his had helped make the Red Lobster restaurant chain what it is today. I don't remember what the idea was, but I do remember a blissful look in his eyes. He seemed so happy about his Red Lobster victory, and he wanted us to be too.

Willes had a master plan to save the L.A. Times. Despite his benign carriage, the publisher was quite firm: He was "going to take a bazooka to the wall between advertising and editorial." I would describe our reaction as silent amazement: once that wall is breached, you no longer publish news and features and criticism, you publish infomercials. The wall he wanted to demolish was the wall that defined journalism. We realized that he must have spoken to the Times Mirror board before us, and the board hadn't corrected him. At our luncheon no one raised his or her hand to say: "That's insane. Once you tear down that wall, readers will rightly doubt the provenance of every story in the newspaper. They'll stop reading and then the advertisers will stop advertising. How can you save a newspaper by misunderstanding its essence?" No one said that to him. I didn't either. Shelby Coffey, the Times's editor of nine years, one assumes, did. He resigned soon after.

Having spent a good portion of his adult life accumulating wealth, Mark Willes found himself in a position that asked what he was made of, what his thoughts were on issues other than interest rates. To be a businessman and suddenly become the publisher of a major metropolitan newspaper in a huge city like L.A. — even in today's degraded market — should be a come-to-Jesus moment. If he had any thoughts whatsoever on how human beings should live together and form a civil, safe society, those would come into play. 

And Willes did, in fact, sense that his tenure at the L.A. Times might be an opportunity to enlarge himself and the city. According to O'Shea, Willes increased weekend cultural coverage, published an eight-page bilingual section, purchased some smaller neighborhood papers, created a reading program for kids. And though he was ruthless about cutting other people's jobs, O'Shea quotes him, albeit years later, as saying that well-informed citizens are "critical in having a civilized society." But he couldn't see his own shortcomings. He alienated the Chandlers. He appointed incompetent people. He hired a consultant who performed experiments to prove that the newsprint used by the L.A. Times didn't smell as nice as the one used by The Wall Street Journal. And like everyone else in his position, he had no answer to the better delivery system that was helping to destroy newspapers: the internet. In July 1999, 20 months after he came in, Willes was out.

According to the American Journalism Review, Willes exited the paper with a year's salary and bonus package equal to $2.2 million, plus $9.2 million in severance, $970,000 a year for life (half of which is payable to his wife for the rest of her life if he dies first), and his 401K plan. Also: stock worth upwards of $50 million, a fully furnished office in Glendale, California for seven years, a secretary, and financial counseling — all at the Tribune Company's expense.

Four months after he left, the news broke that the paper had entered into a questionable business deal. In October it published an issue of its magazine devoted to just one subject: downtown's huge new Staples Center sports complex. Turns out the L.A. Times business staff had partnered with Staples Center to sell ads for the magazine and split the profits. In other words, the L.A. Times had published a magazine without letting readers know it had a secret financial arrangement with the subject of its coverage. Here was the work of Willes's bazooka. While its heinousness may seem obscure to the general reader, the Staples Center scandal was an enormous embarrassment for the newspaper.

In retrospect, I don't know which seems more incomprehensible: that we would have had to explain journalism to the publisher of a newspaper or that it didn't matter whether we did or not. As if to right this wrong, O'Shea misses no opportunity in The Deal from Hell to describe the purpose of journalism: "Readers respect newspapers that take on powerful interests, expose abuses of power, and illuminate the dark corners of privilege where secrecy thrives," he writes. 

This is true and bears repeating, but it is less inspiring than watching All the President's Men, the 1976 film that moved a generation of aspiring writers to become journalists, including myself. We saw journalism as the best job possible: We would be detectives and artists of a kind and save the republic from nefarious shadowy forces just by telling the truth. Thirty-five years later, mainstream journalists are now more often assumed to be cogs in the corporate wheel that exists only to protect profits. Fox News alone has made the idea of journalism's relative objectivity a daily joke. Fox may be more brazen than most outlets, but it is far from alone in substituting showboating for reporting. If journalists have not made a spirited, convincing defense of what they do, it may be because in many ways their hands are tied.

When O'Shea puts on the cape of Defender of the Cause in The Deal from Hell, he too often expresses himself in Dudley Do-Right-isms. "Good, solid, spirited journalism provides an invaluable, credible public marketplace of ideas and debate for readers and advertisers alike," he writes, though how much advertisers want ideas and debate is up for debate. Such hand-wringing is no match for the witty, irreverent, insidery writing that adorns the popular news websites that were just beginning to attract the few young readers still buying newspapers. 

After the Staples Center scandal broke, Otis Chandler released a statement that called the episode "unbelievably stupid and unprofessional." Otis died in 2007, apparently believing he had seen "the single most devastating period in the history of this great newspaper."


2000-2006


The Chandlers sold Times Mirror to the Tribune Company in 2000, once again structuring the deal to benefit the family at the expense of minority shareholders and the paper itself. (Note to self: Have lawyers triple-check any deal with the Chandler clan.) The family exchanged its Times Mirror stock for shares in Tribune, leaving non-Chandler stockholders to pay taxes on their profits. The Tribune Company acquired Times Mirror for $95 a share in cash and stock, a price that would prove far too high, and Tribune stock plunged. Meanwhile, Forbes reported that the Chandler family's collective net worth jumped 35 percent to $3.8 billion.

The good news was that the L.A. Times had a new editor, John Carroll from The Baltimore Sun, who in turn hired The New York Times's Dean Baquet as his managing editor. Peace, sanity, and Pulitzer Prizes returned to the land, but the profits were not enough to satisfy the beast for long.

The next maw took the shape of Dennis FitzSimons, a man promoted to Tribune CEO in 2003 after having done a fine job running the company's television stations, which showed a profit of 30 percent or more, a percentage that caused Wall Street to say "me like." FitzSimons responded to his appointment by immediately cutting 900 jobs.

O'Shea describes FitzSimons as a political conservative and staunch Catholic who opposed gay rights and labor unions and was threatened by people who support those things. All of FitzSimons's ideas came from his knowledge of broadcast; he thought newspapers should focus on local news and that editors should rely on readership surveys to figure out what consumers want covered, and then cover those things. This is the antithesis of a good newsroom, where editors rely on reporters who are on the ground asking questions to help determine the importance and urgency of stories. Then, editors, most of whom are former reporters and have overarching expertise in their fields, confer over which stories should take precedence. The front-page editorial mix is based on their collective view of what a well-informed person needs to know about his neighborhood or country: not a distinction that the average citizen has the perspective to be able to make. When real journalism is being practiced, these decisions are not ever based on which stories will increase the stock portfolios of the editors or the newspaper.

O'Shea was by now the Chicago Tribune's managing editor, a position that brought him into close contact with FitzSimons. O'Shea's first instinct was to try and educate his CEO. Hoping to interest FitzSimons in world affairs, he suggested a meeting of foreign correspondents in Istanbul. While there, the Tribune executives would also meet with the newly elected Turkish Prime Minister. Straitlaced newsman that he is, O'Shea cannot help but relish the story of FitzSimons showing up at LAX sans passport; the CEO didn't know he would need one to fly to Turkey. Once in Istanbul, FitzSimons enjoyed holding forth at the conference, but he left the next day, telling O'Shea he had to bail on the Turkish Prime Minister, who responded to the insult by canceling on O'Shea and the other Tribune people. Later, O'Shea discovered that FitzSimons returned early in order to attend a baseball game; it was Cincinnati Reds versus the Chicago Cubs. Cincinnati won, nine to seven, O'Shea notes wryly. 

When it inevitably came, FitzSimons's golden parachute amounted to $41 million, a middling figure as executive packages go; before he was out the door, a simmering battle ensued with the Tribune editors over cutting foreign and national news staffs, a fight that culminated in the resignation of editor John Carroll in 2005 and the firing of publisher Jeffrey M. Johnson in 2006. Carroll was replaced by Dean Baquet, who was fired soon after Johnson for refusing to implement further staff cuts. The Times had lost four top editors and four publishers in ten years. If the editorial staff felt rudderless and ignored, it's because they were. Reluctantly, but with hope, O'Shea moved from the Chicago Tribune to the L.A Times, where he was anointed top editor in November, 2006.

2007-present


Around the time of O'Shea's appointment, a Merrill Lynch banker placed a phone call to Sam Zell to discuss the distressed media property. The Tribune Company's revenues were declining. Investment bankers circled the company like sharks, smelling fee-laden packages of loans that could be converted into securities and peddled to big institutional investors or hedge funds. Like everyone else in finance in 2007, they kept their sights on their fees and thought little about any ramifications that might follow.

Zell was known for constructing complicated deals, especially ones in which he personally had very little at stake. For the Tribune deal, Zell put a paltry $315 million of his own money into a purchase offer of $8.2 billion. To raise the other $7.9 billion, he proposed making Tribune an S corporation owned by a nonprofit ESOP (Employee Share Ownership Plan), which would be exempt from federal income taxes. The ESOP could then borrow the rest of the money needed to buy the stock owned by the Chandlers, the McCormick Trust, employees, and other shareholders in order to complete the sale and take the company private. If the deal went through, Tribune managers would be rewarded with large "success bonuses." The investment bankers and advisors, for six months of work, would take in about $160 million. 

The deal would saddle the company with $12-13 billion in debt. In other words, everyone stood to gain except the newspaper, the company, and their employees, all of whom were risking a great deal and, in the case of the employees, without their consent. The deal from hell went through. Exactly 12 months later the company would file for the largest bankruptcy in the history of the American media industry. Over 4,200 people lost their jobs in the three years that followed.

Even in the negotiation stage, the Tribune deal enabled Zell to measure himself by a flattering new yardstick: He was no longer simply the "grave dancer," an investor who took risks on troubled companies; he was now in competition with Rupert Murdoch who was in the process of buying the Wall Street Journal from the Bancroft family (which had controlled that paper since 1902.) In November 2007, Zell told Connie Bruck of The New Yorker: "Rupert is paying a huge price [$5 billion]. In our case, we're paying what we think is a very attractive price — so our point of entry in this transaction is such that we have a lot of optionality." 

If "optionality" means having options, the opposite was true. Zell's deal was freighted with debt; Murdoch's was not. More crucially, Murdoch had a vision for his media empire. Fox News and the Wall Street Journal would be the heavy water carriers for his business philosophy and his portfolio. David Frum, former George W. Bush speechwriter and once-prominent neoconservative, summed up how heavy in a 2010 Nightline interview about Republican opposition to healthcare reform: "Republicans originally thought that Fox worked for us," he said. "Now we're discovering that we work for Fox."

Murdoch was engaged in transforming both media and the financial landscape of the world. Just what was Zell's vision? We were eager to find out. When we got to work on January 4, 2008, we were greeted by large banners hanging in the lobby of the paper reading, "You own this place now!" The banner — with its vaguely condescending exclamation point — immediately told us that we were being sold something. We didn't fully realize at the time that Zell's deal had placed our retirement plans at tremendous risk. This banner was, apparently, a bizarre attempt to head off any potential objections at the pass. At the same time it triggered more insecurity in the staff, helping us to become gawking, silent bystanders at our own funerals. 

Zell addressed the staff of the Orlando Sentinel, one of the Tribune newspapers, on January 31, 2008, which was the first time most of the journalists in the Tribune family got to see the man himself. As part of a whistle-stop tour of his new properties, Zell took visible delight in showing off his iconoclastic style to a new industry that, before now, had not had the pleasure. He was primed and ready for his close-up. He took the stage and stood at a lectern, a leprechaun-sized, wizened, bald man with a white goatee and gravelly voice. 

According to Zell, "the eleventh commandment is Thou shalt not take oneself seriously." His public posture was combative but laced with impish mischief; the gleam in his eye suggested he enjoyed being challenged. This may have misled Orlando Sentinel photographer Sara Fajardo, or perhaps she had seen the new employee handbook rewritten on orders of Zell. One of its entries read: "Question authority and push back if you do not like the answer. You will earn respect, and not get into trouble for asking tough questions." 

In any event, there Zell is in Orlando, telling his staff about the necessity of making money, how that would be our top priority going forward. Fajardo did what none of us attempted with Mark Willes; she stood up and asked her new boss about his view on "the role journalism plays in the community, because we're not the Pennysaver, we're a newspaper." Zell placed both hands on the podium and bent his elbows, as if he wanted to push it forward. "I want to make enough money so that I can afford you," he said, his irritation mounting. "It's really that simple. You need to in effect help me by being a journalist that focuses on what our readers want and that therefore generates more revenue." Fajardo immediately broke in, "But what readers want are puppy dogs," she said, as the courage drains from her voice. "We also need to inform the community." Zell cut her off, his right hand gesticulating forcefully. "I'm sorry but you're giving me the classic, what I would call, journalistic arrogance, by deciding that puppies don't count. ... What I'm interested in is how can we generate additional interest in our products and additional revenue so we can make our product better and better and hopefully we get to the point where our revenue is so significant that we can do puppies and Iraq. Okay?"

The audience, some of whom applauded, might have been momentarily perplexed by Zell's concept: That, like a kid who must endure being grounded before he can go to parties again, a newspaper would have to sell its very soul so that, at some undetermined point in the future, it might be allowed to go back to being a newspaper again. If anyone was busy contemplating the conundrum of Zell's argument, he might have missed the day's dramatic high point, which occurred when Fajardo turned around to sit back down. Zell had two more words for her. They were: "Fuck you." 

Fortunately, it lives on YouTube.

I watched the video of this event over and over. What mesmerized me was the sight of a man so unprepared for his come-to-Jesus moment that he had no idea it had arrived. Where Murdoch had his ducks lined up in a formation any dictator might envy, Zell had only his anger at everyone who had ever criticized him, at anyone who had ever doubted that accumulating wealth, by itself, was proof of ethics, intelligence, or general marvelousness. 

A week later, on February 7th, Zell came to visit the L.A. Times. Like any experienced public speaker, he knew to open with a joke. "The challenge is," he said, referring to the newspaper, "how do we get somebody 126 years old to get it up?" This prompted nervous laughter from the crowd. Then, he delivered his zinger: "I'm your Viagra, okay?" Aware that the Sentinel incident was on our minds at his flagship paper, Zell addressed that issue right away. He did not name the photographer he had insulted, but he told us, "She showed me her ass before I finished answering her question. And if any of you show me your ass while I'm talking, I'll say the same thing to you." There was a moment while we in the Chandler Auditorium took in our new chief. That he thought this was an explanation for what had happened in Orlando was more telling than the incident itself.

Soon, though, Zell was finished talking. He introduced Randy Michaels, the man who would later become CEO, though none of us knew who he was or why he was there that day. He was simply a man we should listen to, we were told, because Zell respected him. Taking the mic, Michaels, also a gnome-sized person, strode the stage. He was as smooth and polished as a motivational speaker; in fact, he was a motivational speaker. He talked in business-ese, about thinking outside the box and accepting change. He told us, in what I thought was chilling language, that those of us who were not stuck in the "old way of doing things" had nothing to worry about. He told us that the way to get the wind at your back is to go the way it's blowing.

Those of us who write for newspapers tend to go our whole lives missing out on this kind of talk. At our editorial meetings we discuss specifics: what information we have on the record, who the players in our stories are, at what length we should write. On the other hand, the people in marketing and advertising seemed to warm to Michaels. What sounded to us like utter nonsense seemed to assuage them. They were the people nodding and applauding at these meetings.

Soon after, Michaels set to work drafting a 100-day plan for the Tribune Company. O'Shea points out that the nine-page, single-spaced document never once mentions the word journalism. Some of Michaels's bullet points sounded proudly Third Reich-ish, such as "Empower opinion leaders who buy into the new vision" and "Eliminate negative resistance and counterproductive team members immediately. Hang the turf Gods Publicly." 

Zell went on to meet the Washington bureau of the Tribune newspapers. He had a message to deliver there, too. He introduced himself by telling his new staff: "This is the first unit of the Tribune that I've talked to that doesn't generate any revenue. So all of you are overhead." He went on to say, like an angry dad, that he would find out if it really required "six people or nine people to cover the same Iraq story" and that "the days of the newspaper being some kind of holy monopoly are over." (Interestingly, Zell's biographer quotes him as saying, "The best thing to have in the world is a monopoly, and if you can't have a monopoly, you want an oligarchy.") This was not the passive-aggressive speech of his previous appearances. These were the words of a warrior whose moment had at long last arrived: that day he stood in front of his vanquished enemy, the editorial staff.

And we were, in fact, the enemey. Zell was one of those tycoons who had no love for journalism. O'Shea relates that Zell was incensed by a 2004 profile published by the Chicago Tribune Sunday Magazine. The story included scenes from the 1977 trial in which he turned states' evidence against his brother-in-law. When Zell became owner of the Tribune in 2007 and met with editor Ann Marie Lipinski, he was still livid about the piece. "He remembered everything about it," she recalls in Deal From Hell. O'Shea reports that Zell's complaints about the story escalated into a "screed against journalists."


¤


Marx said that history repeats itself, first as tragedy, then as farce.

Our farce starred Lee Abrams.

Like Randy Michaels, Lee Abrams came from radio: He had been Chief Programming Officer at XM Satellite Radio. Zell thought so much of Abrams's intellect that he gave him the title Chief Innovation Officer. Abrams's job, in its entirety, was to teach the people who worked for the Tribune Company to approach their problems with new kinds of thinking. He put it this way: "I'm here to help everybody get into the innovation frame of mind and challenge the way things have been done." Roly-poly and with shaggy gray hair and a dark mustache, he looked like a long-lost follower of Crosby, Stills & Nash. He wrote like your unemployed Uncle Bob, with unworkable solutions to all of the world's ills and unlimited time to email you about them.

Abrams started his email avalanche by telling us how to come up with stories for the paper that people would want to read. In a mass email to the staff, he suggested we try "Nerve Touching." (All punctuation and spelling of Lee Abrams's emails are quoted here verbatim.) He defined "Nerve Touching" thusly:


This is where you get people to stand up on their chair because you touch a nerve. One way to do that would be for the Chicago Tribune to run a story about Easter. "There are a LOT of Catholics in Chicago. Easter Bunny stuff is fine... but there's a more serious side to it that isn't being captured. A devout Catholic, I would imagine, would feel very good about this.


He also advised the sports editor in Chicago to consider covering the Sox and the Cubs:


I'll bet there are a lot of huge fans in Chicagoland. It's only spring training, but I think we should fan the flames. Get in the spirit. Touch some nerves.


The emails started arriving more and more frequently. One day he told us that what we need more of is:


CONSISTANCY ... REAL consistency.


I personally sent that one viral. Apparently oblivious to the parodies that began circulating on the internet, Abrams remained unperturbed. He plunged ahead like an eager puppy. One of his next missives warned us of a new evil in our thinking:


ASSUMPTIONS: Possibly the biggest problem. Assuming. I met a reporter who spent 4 years in Baghdad. Dodging bullets ... staying in Hotels protected by the Marines. Yet, I'll bet NO-one outside of the building knew this person was risking their life in Iraq to get YOU the news. If it were CNN, you'd see rockets and RPG's in the background as the reporter ducks shrapnel. In the paper, it's usually a small byline. Hell, papers should have photos of the reporter with Iraqi kids ... be writing diaries. Before I joined Tribune, I had NO idea that reporters were around the globe reporting the news ... Because the paper "assumed" I knew.


His theory rambled on for a bit and then concluded:


These are assumptions that are shooting ourselves in the foot. People DON'T know that you have REAL people exclusively reporting, because we ASSUME they do.


In June, The Atlantic's Jeffrey Goldberg sat down for an interview with Abrams and asked him if Dunne had been right, if the mission of the newspaper was still to afflict the comfortable and comfort the afflicted. Abrams gave it some thought. His answer: "Probably not as much as it did."

There were no more mysteries. We knew who was running the show. These were not Larry Gelbart's barbarians at the gate. These were the guys who made Gelbart's barbarians look like George Bernard Shaw. In September 2008 a band of current and former L.A. Times employees filed a class-action lawsuit against Sam Zell, calling his acquisition of Tribune "a scam." Three months later came the bankruptcy filing, listing $7.6 billion in assets against a debt of $13 billion. The remaining employees struggled along as the company tried to emerge from bankruptcy, and an uneasy status quo was maintained.


¤


On October 6, 2010, The New York Times published a front-page story by David Carr. The piece opened by recounting a scene at Chicago's InterContinental Hotel, where Randy Michaels ran into a few senior Tribune executives at the bar. "Watch this," he told them, and offered their waitress $100 to show him her breasts.

Among other revelations in the story: 



(1) Even as the company foundered in bankruptcy, the tight circle of executives, many with longtime ties to Mr. Michaels, received tens of millions of dollars in bonuses. 

(2) During and immediately after Mr. Michaels's tenure at Clear Channel, three lawsuits were filed contending sexual harassment at the company. One plaintiff, Karen Childress, a senior executive, said she was fired after complaining about receiving lewd email from senior company executives. In her complaint, Ms. Childress also stated that women who slept with male executives at the firm were promoted. The cases were settled out of court. Clear Channel declined to comment on the lawsuits.

(3) Ann Marie Lipinski, who resigned as editor of the Chicago Tribune in July 2008, said that the month before her resignation, Zell told her to be harder on Gov. Rod Blagojevich. She reminded him that the newspaper had aggressively investigated the governor and that its editorial page had already called for his resignation. "Don't be a pussy," Zell told her. "You can always be harder on him." In a news meeting later the same day, she found out that Zell was in negotiations to sell Wrigley Field to the state sports authority. "It was hard to avoid the conclusion that he was trying to use the newspaper to put pressure on Blagojevich," she told Carr.

(4) Advertising disguised as editorial was being inserted into the paper in new and unsettling ways. In April 2009, an advertisement posing as a news article about NBC's new show Southlandappeared on the front page. In July 2009, the Los Angeles County Board of Supervisors sent a letter of protest, saying that the use of advertising disguised as news "makes a mockery of the newspaper's mission." Despite this "innovative" advertising, the Tribune's newspaper circulation had continued to slide faster than the dismal industry average.


We were not privy to the conversations sparked at Tribune by The New York Times story, but one thing is clear: Randy Michaels instantly pushed Lee Abrams under the bus. Days after the story, Michaels asked for his resignation and Abrams responded with an open letter, showcasing both his innovative syntax as well as his usual perceptiveness on the issue at hand: "I think that a major component of this debacle is being motivated by a power play to seize creative, cultural and business control of the company as it emerges from Chapter 11. Or maybe the idea of a 'rock and roll' type from broadcasting invading tradition is so offensive to the fourth estate that my mere presence posed a threat to their grip on the past." 

Michaels claimed he fired Abrams over the distribution of an actually funny video: a fake news story from The Onion about a VH1 bus carrying reality-show contestants that overturned on the freeway, spilling 2,000 pounds of "highly concentrated slut." We were to believe this had offended Michaels's sensibilities. That same week, also in response to the New York Times story, a radio host named Mancow Muller told his listeners on WABC-AM in New York about a job interview he had had with Randy Michaels. "I'm sitting there in his Tribune Tower office and the first thing he asks me was how I felt about women's shaved genitals," Muller recalled. "I enjoy a good joke as much as anyone, but even I was shocked that a man in his position would be so base." Before the month was out, the board asked for Michaels's resignation.


¤


In November of last year, a month after the New York Times story, Zell told CNBC that the Tribune Company is "in dramatically better shape today" than when he gained control three years earlier. He also said he didn't "envision having any role going forward," that he would leave when bankruptcy proceedings were closed. He said he thought the company "produces a better product" than it did before his tenure. I have yet to meet a reader of his newspapers who thinks so.

O'Shea proves himself an able observer of the debacle, while at the same time excusing himself from much culpability, representing himself as naïve and as just wanting to make the best of a bad situation, and not always convincingly. He offers himself praise, claiming that after the ouster of Dean Baquet, "the newsroom had changed for the better under me. There was more hope in the air." I must have been absent that day. He is sometimes shocked, shocked like Claude Rains, at what his bosses ask him to do. He tries so hard to be evenhanded that he somehow finds some nice things to say about Randy Michaels ("to be fair, he was not without talent") and Lee Abrams ("to his credit, some of his observations ... were on the mark"). These come off as ineffectual homage to old-fashioned objectivity. 

O'Shea is more likeable, though, when he lets his venal side show, such as in the book's epilogue when he, for no discernable reason, relates an anecdote that apparently occurred in Chicago's Tribune Tower, on a 22nd-floor outdoor terrace, near Michaels's office. A door was left ajar on a warm spring day in 2008, setting off an alarm, and a security guard went up to investigate. Seeing the open door, the guard stepped out on the terrace, with its fine view of Lake Michigan, and saw Michaels, standing with his arms extended as if on a cross, being fellated by a young female Tribune employee. 

In toto, O'Shea provides the most complete picture we yet have of what happened at the L.A. Times in the age of Zell; it's an old tale, as he says, of "the greed, incompetence, corruption, hypocrisy, and downright arrogance of people who put their interests ahead of the public's." It is undoubtedly true that reporters and editors, as Geneva Overholser suggested in her review of O'Shea's book in the Los Angeles Times, did not do enough to get the story told; most days they are too busy putting out the news. Too often, Overholser wrote, we have "probed only weakly our own role in the departure of our readers and the decline in our credibility." Some did tell the story: while it was happening, and with what one imagines was a comical abundance of sources given the constant rounds of firings, Kevin Roderick of L.A. Observed reported almost every day on the circus that Spring Street had become. But the national media seemed numb to the Zell story. It was as if we were all frozen in place, unable or unwilling to put Zell into a coherent narrative, perhaps because something similar, if less theatrical, was happening everywhere. As with the News of the World implosion, nothing broke until a scandal hit — in Tribune's case a scandal as petty as "show us your tits" — to get the larger story out.

Despite all of the antics of their bosses, the reporters and editors presently at the paper do what they do and try to ignore the rest. They still manage to put out a good product most days and, on some days, a great one. This year the paper took two Pulitzers; one for photographer Barbara Davidson for her images of people recovering from gang violence and another for public service for revealing official corruption in the town of Bell. It so happened that the police chief and city council members cleaned out the working-class town's coffers to a tune of $5.5 million. Without the Times, who knows how long that story would have gone unreported? 

At the Los Angeles Times building downtown, hardly anyone uses the ornate Globe lobby on First Street anymore. Erected in 1935, it is a much handsomer foyer than the plain Spring Street entrance through which employees enter and exit in reduced numbers. It seems somehow right that management has all but boarded up this stately room. No one passes through to gaze up at the room's elegant arch, which is engraved with the words of Henry Ward Beecher: "The newspaper is a greater treasure to the people than uncounted millions of gold." 

 

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