Jacques Steinberg in Monday's New York Times advances the backstory behind the pending budget cuts and possible layoffs in the L.A. Times newsroom. He reports on a hasty June 4 meeting at Burbank Airport where editor John Carroll and managing editor Dean Baquet argued (unsuccessfully) with Tribune Co. chairman Dennis J. FitzSimons that the demanded cuts were excessive, so soon after the paper won five Pulitzer prizes.
The Times has been steadily winnowing its ranks, mainly on its business side, since Tribune acquired it in a buyout of Times Mirror in 2000. But the prospect of making cuts in the newsroom, so soon after scaling such journalistic heights, has been a stark reminder to The Times of a fact that is central to Tribune's philosophy: Wall Street rarely averts its gaze from the profit margins and other financial bellwethers of media companies...
"Although journalism is important," said John Janedis, a research analyst who covers the newspaper industry for Banc of America Securities, "at the end of the day, investors care more about the number of newspapers you sell and the ad rate increases you get, rather than the number of Pulitzer Prizes.
"Look at USA Today; how many Pulitzers have they won?" Mr. Janedis added, singling out the flagship of the Gannett chain, which has yet to win one. "But they sell a lot of advertising and get good rate increases."
The trouble at the Times is soft ad revenue from department stores and movies. As reported here last week, the Times is offering buyouts to newsroom staff and may resort to layoffs, has closed its book publishing arm, and has other cuts planned. The NYT story says that Carroll has postponed plans for a weekly fashion section and a redesign of the newspaper's Sunday magazine. L.A. Observed has learned, meanwhile, that the LAT magazine may not be as vulnerable as many believe. Former Calendar editor Kelly Scott is joining the magazine as a new senior editor, a regular columnist is being sought and ad sales are ahead of projections.