*Sorting out O'Shea firing

LAT Editor James O'Shea apparently refused to trim $4 million from the newsroom budget, leading to some sort of confrontation with Publisher David Hiller (check out news accounts on LA Observed). As they say, details are sketchy - the paper hasn't even confirmed the unattributed stories about the firing. At some point we'll hear more about relations between Hiller and O'Shea, which might help explain why this came down. There’s no indication that Tribune CEO Sam Zell was in on the firing, though he almost certainly signed off on it. Zell intends to decentralize what had been a very centralized company, which means lots more authority to Hiller. This is from an interview last month:

"Right now," Zell said, "somebody decided that we should put advertising on the front page. What I'd like to do is say to David Hiller, 'You've got bottom line responsibility.' If advertising on the front page gets you there, that's fine. If you think advertising on the front page is wrong for LA and you're gonna get revenue some other way, that's fine. But as long as it's top down, you can't hold anybody accountable. And if you hold people accountable, you produce results -- for the people and the company."

Also keep in mind that Tribune took on huge amounts of debt in the Zell-led deal to go private, and now the interest on that debt must be paid off. Guess which banks are lending the money? Merrill Lynch, Citigroup, JPMorgan and Bank of America. Ring a bell? Both Merrill and Citi just wrote down billion of dollars as a result of the subprime mess (JP Morgan had a much smaller writedown). And Bank of America winds up with Countrywide. There must be enormous pressure to keep down expenses, especially since the economy is likely to be in the tank for much of the year (advertising forecasts are looking terrible). By the way, the newsroom budget is on the high side this year because of the presidential campaign - lots of candidates and coverage requirements - not to mention the Olympics this summer.

*Update: Hiller told ther LAT that O'Shea was not fired. Rather, his departure was part of a transition plan of organizational changes to be enacted after Zell took control of the company. "Think of it as the changes made at the start of a new presidential term," Hiller told the Times. "In the context of these changes, Jim and I decided we no longer saw things the same way about how to take the company forward." Actually, this rings true; O'Shea is no youngster and is closely tied to the told ways of newspapering at Tribune. O'Shea said, "It is true that we did not share a common vision for the future of the LA Times. From my perspective he made the decision to terminate me. I cannot comment further without talking to my attorney."

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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