Chalk up one for corporate cost-cutting

Newspaper rack outside the Los Angeles Times building

BOB MOON: Chalk one up for the forces of corporate cost-cutting. Los Angeles Times Publisher Jeff Johnson was fired this afternoon. Well, technically, he was asked to resign but the end result is the same. About a month ago Johnson stood up to the bosses in Chicago. The Tribune Company owns The Times. Johnson had refused to cut staff at the paper. David Hiller, the publisher of the Chicago Tribune will be moving out to L.A. to take over the country's fourth-largest newspaper by circulation.

Kevin Roderick writes the media blog, L.A. Observed, he also used to work for The Times. Kevin, surprised by today's events?

KEVIN RODERICK: Well, a little bit surprised in that, you know, just last week The Times' Publisher Jeff Johnson was called back to Chicago and read the riot act and came back to L.A. sounding quite conciliatory. So, I thought the crisis had passed. But I guess not.

MOON: Well, is this a simple case of the boss just digging in his heels and telling the home office we can't do the job if we have to cut any more staff?

RODERICK: Well, you know, I think it runs a little bit deeper than that. Because this publisher who just got fired, Jeff Johnson, had replaced a publisher last year who had been seen by Chicago as going native in Los Angeles. He had become a backer of everything that the editorial department asked for. So, Jeff Johnson was installed just last year to try to bring some order and enforce the Tribune's wishes in Los Angeles. And here it is a year later, he's siding with the editor against what the Tribune wants to do. So I think this runs a little bit more than a simple case of insubordination for the Tribune Company. They saw their corporate imperatives being defied.

MOON: Well, you use that phrase "going native." Any sense of the reaction from community leaders, business leaders here in Los Angeles? I know community leaders have been voicing some concerns about the future of the paper here.

RODERICK: Yes, and some of the leaders who sent a letter to Tribune Company last month, asking for a deferral of any further cuts at the Los Angeles Times and a greater commitment to local coverage are already reacting poorly to this news. They thought Johnson had the paper going in the right direction. And they were standing up publicly to defend him. And this morning some of them have made some comments saying that they're quite chagrined at this.

MOON: How much is this a unique situation that affects just newspaper readers here in Southern California, and how much of this is perhaps a common issue elsewhere in the country?

RODERICK: Well, you know, these are bad times for the newspaper industry. Money is tighter and they're fighting for advertisers, and circulation is dropping. So, I don't know that this particular case of circumstances has been duplicated anywhere else but, boy, it could be a sign of things to come lots of places. The corporate offices that run newspapers are quite concerned about the future of the bottom line, because the bottom lines are pretty healthy right now. The Tribune makes a 25 percent return on the Los Angeles Times. But their stock price continues to sag, and they're used to seeing their newspapers run an even leaner operation and return close to 30 percent. So, it wouldn't surprise me if this is the kind of thing you start to see happening in newspapers across the country.

MOON: Yeah, things are getting more and more competitive. Kevin Roderick is a former L.A. Times reporter and editor, now writes the media blog L.A. Observed. Thanks for joining us.

RODERICK: Thank you, Bob.

About the author

Bob Moon is Marketplace’s senior business correspondent, based in Los Angeles.

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