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Aug. 22, 2017, 6:30 p.m.

Newsonomics: After a purge, the Los Angeles Times (still) searches for a future

On Monday, the long-time irresistible force that is Davan Maharaj finally found an immovable object. Maharaj, until Monday editor and publisher of the fourth largest newspaper newsroom in the country, got his walking papers from Tronc. Was that a surprise? No. The surprise came in the sweeping changes that accompanied the departure of the Los Angeles Times’ editor for the last five-plus years.

In fact, Maharaj had a remarkable run as a tightrope walker on one of the highest wires of American journalism. A 28-year Times veteran, he managed under old Tribune management, Sam Zell, Jack Griffin, Austin Beutner, and Michael Ferro — a feat that may be worth one of those little Oscar statuettes that Tronc’s current chairman, Ferro, seems to be so enamored with. What finally did him in?

It’s a Rashomon-like tale, with unending angles of view. “Metro led the charge” against the editor/publisher, says one insider. While Maharaj had managed to walk that tightrope to keep the level of Times journalism at high levels, parts of his Metro news staff — in many ways the heart of an operation like the Times — considered him a man apart. Even as the Times published national-ranking exclusives, most recently on the lurid double life of a USC medical dean, and last year on Oxycontin addiction, the distrust remained, and then grew.

Earlier in the year, staffers filed complaints about Maharaj, ironically in part about the handling of those high-profile stories. (Variety has good details here.) Meanwhile, Maharaj’s often-rocky relationship with his two bosses, chairman Ferro and CEO Justin Dearborn, didn’t get any better. One continuing issue: how much the newsroom would continue to be cut — it’s down to about 400 staffers from about 550 five years ago — as Tronc continues to make big expense cuts to maintain profit. Even as parts of his newsroom expressed concerns about his leadership, Maharaj continued to push back against those cuts, preserving as much of the staffing as he could. He also pushed back on efforts to use Times’ journalism to satisfy Ferro’s own business interests. But any complaint could serve as convenient pretext for Ferro.

Simultaneously, the Newspaper Guild has been quietly mounting a unionization effort at the Times, and less-than-popular newsroom leadership would only increase the chances of its success there. Word on the L.A. streets is that Maharaj’s departure may tamp down that union drive.

Add it all up, and that’s a lot of wind on the high wire.

By the weekend, Ferro and Dearborn made their decision, and Dearborn told Maharaj about it over breakfast, the first step in a quick series of unexpected phone calls.

Letting go a top editor isn’t unusual. What shocked even those who had wanted Maharaj out was the the firing of three other members of Maharaj’s management team. His managing editor and sidekick Marc Duvoisin, digital editor Megan Garvey, and investigations editor Matt Doig all got their walking papers, as did award-winning reporter Jill Leovy. As LA Observed put it, “the reason seems to be that Leovy is married to one of the axed editors,” Duvoisin. Further, in this very selective layoff, Tronc fired Maharaj’s administrative assistant Ana Mata. The word “purge” came quickly to mind.

While there’s much to plumb in the who, what, when, and where of those firings, even this unprecedented canning is but a sideshow to the larger drama here: What is the future of the once nationally powerful Los Angeles Times?

In the short term, Tronc has brought in digital executive Ross Levinsohn. Though his digital business cred is real — mainly proven out at Fox a digital generation ago — we know little about his current knowledge on the business models that indeed are working at the highest levels of American daily journalism. And make no mistake, that’s what the L.A. Times should be again — especially in the Trump era — and even what its current owners say they want it to be.

As Maharaj, who added the publisher title to his editor duties only a year ago, was dispatched overnight, Levinsohn became, astonishingly, the fifth Times publisher in the past 10 years. That’s perhaps the only data point you need in the lesson of how not to build (or rebuild) a great national newspaper brand. Great journalism brands demand steadiness — and investment. Tronc, as a single-class public company careening from one announced transformation strategy after another has shown little ability for either. (In fact, further word is that Malcolm CasSelle, Tronc’s digital guru and cohost of its infamous Tronc video, left Tronc’s employ last week. His cohost, digital manager Anne Vasquez, is no longer a prominent presence in the company.)

Once again Monday, Tronc cloaked its big news, with a big fuzzy vision. To be sure, with any kind of change, companies like to paint a growth story — and new publisher and CEO Ross Levinsohn did that.

“We have global ambitions for this brand, and I believe the Los Angeles Times has the potential to further expand and deepen its societal and cultural impact regionally, nationally and around the world,” said Levinsohn.

Just a year ago, Tronc had made a similar declaration, announcing what I called the Lagos Gambit. No strategy nor funding has enabled that strategy. In fact, as a single-class public company, it has little cash to spare. For the second quarter, Tronc reported $6.8 million in net income. That’s behind the further whacking of three corporate executives, also buried in yesterday’s news. Instead of finding limited capital to build a “world-class” Times, Ferro’s Tronc has tried and failed to buy the Orange County Register, US Weekly, and the Chicago Sun-Times — each a possibly minimally accretive investment, but none that would help achieve that grand new L.A. Times dream.

That dream of matching the reborn success of The New York Times and The Washington Post actually diminishes each year — even though the state and country would well benefit from such a revival.

Consider that as L.A. Times newsroom staffing has shriveled, the Post now houses almost twice as many journalists, along with many more technologists to support their audience growth. The New York Times boasts a newsroom budget more than three times that of the L.A. Times and is relatively stable.

Both companies have heavily invested in content and technology — the two fulcra of the digital content business — and are now, after years of investment, seeing the results. If Michael Ferro truly wants to rebuild the L.A. Times, he need not reinvent the business, as he promised to do after renaming Tribune Tronc last year. He simply needs to find the money and follow the playbook of the two major success stories in American newspapering.

He has taken at least one smart step, licensing the Post’s Arc technology platform, with its first installation moving forward in Los Angeles. But the most important ingredients in the Times’ and Post’s rebuilding are a belief, and a funding, for their journalism.

Alternatively, Ferro could sell the paper — or see it bought out from under him if his once-partner, now-foe Patrick Soon-Shiong attempts a buyout of the Times early next year. Or another Jeff Bezos could come out of the woodwork, and make Ferro an offer he couldn’t refuse, as others have suggested as recently as today.

So how much is the Times worth?

Tronc counted $181 million in EBITDA in 2016. Figure the Times contributes no more than a third of that. At a standard multiple of 4-4.5× in today’s market, that would put the price in the $300 million range, $50 million more than Bezos paid for the Post. But what about it trophy value? It’s diminished, but even a tarnished Times might pick a small premium.

In the shorter term, Jim Kirk, another Chicago guy — the perennial plague of the Los Angeles newsroom ever since Tribune bought Times Mirror way back in 2000 for $6.5 billion — becomes interim executive editor of the Times. In L.A., Ferro and Dearborn have reversed their executive strategy — which combined editor/publisher into a single position at each newspaper property last year. Levinsohn takes over the business side, while Kirk oversees the newsroom.

In fact, Kirk’s number one task will probably be an assessment. That could means other heads could roll. It’s no secret: Tronc needs more cost savings, after that dismal Q2 financial report. The sad truth about Tronc — one that its executives have confided privately — is that it’s really been ongoing management by triage. News executives wanting to preserve as much of their newsroom capacity as possible have been forced to make journalistic Sophie’s choice after Sophie’s choice.

If Tronc executives really want to embrace a more global news strategy — “be more like The New York Times,” in the parlance of some execs — will Los Angeles-oriented and California-oriented resources be moved? If so, how might that impact the Times’ one positive movement, its increase in the number of digital subscribers?

Even those who complained about the Maharaj reign may reconsider what they wished for as that assessment moves forward.

Kirk just departed the just-sold Chicago Sun-Times, assuming a strategic role for Tronc. Within days, he was approached with a new opportunity: taking over — in the interim, at least — the L.A. Times. Will he stay? Is he really interim? Levinsohn says that he and Kirk are already in search of a permanent replacement.

The big question there: What kind of money and a contract would it take to attract a national caliber editor with digital savvy? What will it take for someone of stature to step into the chaotic Tronc? If Tronc believes it’s serious about its new national pursuit, it may have compiled a shortlist of New York Times and Washington Post talent.

Clearly, parts of the Times newsroom helped engineer this massive change at the top. Now, how much of an opportunity will they have to shape the next future? (The same could be asked about Kirk.) And how will a newsroom that has gotten more digital — but far less digital than the Post and the New York Times — get itself to that future? Beyond personalities, these are the real questions that loom this week.

Photo of clock at the Los Angeles Times building by David Wilson used under a Creative Commons license.

POSTED     Aug. 22, 2017, 6:30 p.m.
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