The deal from hell

You can blame Wall Street for the decline of journalism, too!

In the news business, there has always been that natural tension between the editorial side and the business side.

There is the news, and what impact the news might have on an existing client.

Like when we talk about, say, a lift ticket tax in Mammoth Lakes. (Ha ha. Settle down, 4th floor).

In this internet age, with competitive pressures coming from all angles, this tension in the news business has been heightened considerably. And much to the dismay of journalists everywhere, the business side is the gold mine, and the editorial side has gotten the shaft (apologies to Jerry Reed).

In his new book “The Deal From Hell: How Moguls and Wall Street Plundered Great American Newspapers,” former Los Angeles Times editor James O’Shea writes about the corporatization of the news business which has decimated both the L.A. Times and Chicago Tribune in the past decade.

As O’Shea describes it, many of the most influential American newspapers were, until recently, owned and controlled by individual families and managed by family members (Otis Chandler in L.A., Katharine Graham in Washington, D.C., the Bancroft family at the Wall Street Journal, the Sulzbergers still at the New York Times).

But families have a tendency to spawn descendants, and descendants of the wealthy have a tendency to spawn ever-increasing appetites for money they’ve never had to work for.

In the case of the L.A. Times, the Chandlers sold its Times-Mirror chain, of which the Los Angeles Times was the crown jewel, to the Tribune Company in 2000.

The Tribune Company was eventually acquired by mogul Sam Zell in a highly leveraged deal in 2007.

Toppling under the weight of the debt used to finance the purchase, the company declared bankruptcy a year later.

But not before a number of lawyers and investment bankers had made off with hundreds of millions of dollars in commissions.

As part of the initial deal in 2000, Chandlers took seats on the Tribune Board. And then pressured the Tribune to deliver the profit margins required to maintain the lifestyles of farflung family members.

With big metro newspapers facing increasing competition from the internet in terms of content (particularly in areas like national news coverage, where news aggregators like Yahoo! can deliver up to the minute meat-and potatoes coverage), and websites like craigslist utterly destroying newspapers’ stranglehold on classified advertising, newspaper weren’t seeing a lot of revenue growth.

So the way they met their margins was through cost-cutting.

And what better place to start than in the newsroom. People are expensive.

So they cut. And they cut. And as O’Shea describes, when an editor finally had enough and took a stand for newsroom integrity … they’d find someone to replace him or her who would follow orders.

And as the integrity of the newsroom diminished, people from outside the news pipeline were promoted.

At the Chicago Tribune for example, a Clear Channel television executive, Randy Michaels, was promoted to the editorship of the newspaper by Sam Zell.

In turn, Michaels promoted Jane Hirt to be his Managing Editor (top lieutenant).

According to O’Shea, Hirt had been the editor of the Tribune’s youth paper. Before her promotion, one of her editorial suggestions was to create a “Second Life for Cats feature wherein the feline pets of readers could ‘live out lives online, have alter egos, get married, run businesses, etc.’”

One of the biggest consequences of the corporate push for “synergy” is that it reduces the number of independent perspectives.

Whereas in the past, papers like the L.A. Times and Chicago Tribune might each send a reporter to cover an important national story, “synergy” dictates that the combined company share a reporter to cover it.

Editor’s wiseass note: Locally, “synergy” tends to mean The Sheet sends a reporter to write the story and the Fifty synthesizes the copy for its readers.

Now consider that even the gutted journalism ranks still produce virtually all news content.

O’Shea quotes a Pew Research Center study performed in 2009 in Baltimore which analyzed news generated by 53 outlets, from newspapers to blogs to talk radio.

“The investigation winnowed the reports studied down to six major narrative threads that dominated the news, and tracked down the actual source for the six narratives. Even though the city had more news outlets thajn in previous years, eight of ten stories produced relied on information picked up from other sources. Indeed, 95% of the stories came from traditional media, mainly newspapers.”

The Baltimore Sun, while accounting for nearly half the stories, had cut its newsroom 60% during the previous six years and in 2009, produced 32% less stories than it produced in 1999.

Why is journalism important? As O’Shea concludes, “The internet is flooding the world with raw information … but raw information also incubates rumor, disinformation and propaganda.”

In short, good journalism helps us sift through the noise.

As the News of the World scandal aptly demonstrates, when the integrity of an institution is compromised, some terribly poor decisions can result.