Big cuts coming to L.A. Times, likely other Tribune papers amid tumult

September 15, 2015 in News by RBN

Poynter | James Warren

The Los Angeles Times newspaper buildings, where cuts are expected. (AP Photo/Reed Saxon)

Significant newsroom cuts are being planned at the Los Angeles Times one week after the ouster of its publisher.The company is looking to reduce editorial expenses by about $10 million and the cuts could amount to 80 positions, according to an executive from Tribune Publishing, which owns the L.A. Times and 10 other dailies.

The Tribune Publishing source said the Los Angeles paper likely would not be alone in making reductions. Other Tribune papers are expected to face cuts, too.  It was unclear how the cuts would impact other Tribune properties.

“It’s the only way Jack will make his number,” the source said, alluding to financial goals Tribune CEO Jack Griffin has struggled to attain during an industry-wide downturn.

Davan Maharaj, the paper’s editor, had no comment.

The Tribune executive, who asked not to be identified, said the reductions would come initially via proposed buyouts.

Severance offered for the buyouts would be capped at one year. The proposal would be based on a formula that would offer one week for an employee’s first ten years of service, two weeks for the next ten years, and three weeks for having between 20 and 30 years, according to the executive.

If buyouts don’t generate the cost savings desired, the company would turn to layoffs.

The Los Angeles newsroom comprises about 500 people. It’s been as large as about 1,000 during the past decade.

Griffin recently dismissed, with board approval, Austin Beutner, a successful private equity investor and former Los Angeles deputy mayor who was the newspaper’s publisher. Internal discussion of cuts began prior to the rancorous split.

Griffin and Beutner clashed over a variety of issues, some involving core strategic notions and Griffin’s preference for marked centralization of some tasks. There were also frictions over Beutner’s preference to reinvest in a variety of editorial experiments and use potential personnel savings for those projects. There were marked stylistic and personality differences, too.

Beutner’s being replaced by Tim Ryan, a more traditional newspaper executive who initially rose through the operations side of the Chicago Tribune. More recently, Ryan has been the publisher of the Baltimore Sun, where he oversaw huge cost reductions.

Ryan’s arrival could not be more fraught with potential landmines not of his own making.

In particular, one of the reasons Beutner was let go: his overtures about purchasing the paper with a group that included Los Angeles philanthropist Eli Broad.

Beutner believed the best path for the paper was going private. But, from the larger company’s perspective, that would mean sharply diminishing the size of Tribune Publishing. It would thus mean that a lot of current corporate executive positions — some quite cushy — would disappear as Griffin’s domain would shrink considerably.

Tribune’s board apparently cited potentially adverse tax consequences as a prime rationale for rejecting a sale. But it did so without apparently asking the Beutner-Broad group what it might be willing to pay, and getting it to sign a so-called non-disclosure agreement so that the group could study the company’s books. It also apparently did not ask that group if it had alternatives to remedy what the company then concluded were the adverse tax consequences of a potential sale.

Two company sources confirmed the basics of that supposed back-and-forth.

The company handling of the possible sale overture was cited over the weekend by industry analyst Ken Doctor, who assessed the possibly tricky strategic and potential legal consequences of the rejection of the purchase overture.

He also cited the potential economic relevance of a letter of protest over Beutner’s firing sent last week by a group of prominent local businessmen, including Broad and two former mayors. More criticisms from public officials and community groups are expected.

Doctor noted how the desire for local ownership melds with a business argument of seeming relevance: “Implicit in the civic leaders’ letter is the question of their future support of the Times.”

“Beutner had appealed to local leadership for advertising support; presumably, under Ryan, company leaders may be less inclined to give the Times the benefit of ad doubt, in spending marketing money.”

“The flip side of support is opposition, and the Tribune is being told that it shouldn’t expect much community and ad support if it stays its new course. How powerful an instrument that really will be remains to be seen, but it returns the question to one of dollars and cents: What is the price, Tribune must ask, for not selling.”

In the short run, that complicates the arrival in Los Angeles of Ryan, who will be encircled by suspicion as substantial personnel reductions appear imminent.