Editor & Publisher is quoting a source "close to Los Angeles executives" (whatever that means) as saying that Russ Stanton, the LAT's innovation editor and former biz editor, is the frontrunner to replace Jim O'Shea as editor. (Managing Editor John Arthur's name has also come up as a candidate.) The E&P story also noted from the same source that the paper faces a $35 million budget gap this year and that the paper's cash flow in 2007 fell to $195 million, down from $240 million the previous year. Cash flow is critical now that Tribune has to start paying interest on billions of dollars in debt as part of its deal to go private. Bottom line: This might not have been the best time for O'Shea to take a stand on newsroom budgeting. Speaking of which, there have been differing reports on just how the squabble came down. The NYT reports that Hiller had ordered a $4 million cut in the $120 million budget. But the E&P story says that Hiller proposed to keep the newsroom budget flat. O'Shea apparently argued that with costly coverage this year of presidential campaigns and the Olympics, that's tantamount to a $4 million cut. What it really sounds like is zero-sum budgeting, which long has been a fact of life at smaller newspapers.