December 8, 2008 | 6:09 pm
Posted by Marty Kaplan
This blog post originally appeared July 9, 2008 and returns to the front page due to popular demand.
HR>What’s the difference between Sam Zell’s Los Angeles Times and Sam’s Bagels on Larchmont?
None, if you take Mr. Zell’s words to heart. He told his Tribune Co. employees in June that “we’re in the business of satisfying customers, and we will respond to what they say they want.” More poppy seeds and fewer cheese bialys? You got it, dollink. More King Kong and less King-Drew? What you say goes, bub. The customer’s always right.
But Sam’s Bagels, unlike Sam’s Times, is not safeguarded by the First Amendment. In fact, the press is the only business singled out in the Constitution for protection. The reason, of course, is that the founders intended the press to serve as a fourth estate—a formidable check against the government’s abuse of power, an essential outlet for dissent; not a mere privilege of democracy, in Walter Lippman’s words, but “an organic necessity in a great society.”
From John Peter Zenger until Sam Zell—have those names ever appeared in the same sentence before?—press owners have maintained that their mission is to do well while doing good, to turn a profit while also living up to their democratic responsibilities. Many of them have figured out how to do both: partly by subsidizing the stuff we need to be good citizens by selling us the fun and fluff we want; partly by deploying journalists’ storytelling skills in order to turn essential information into compelling must-reads.
To Sam Zell, however, running the Times, as well the other papers he bought when he acquired the Tribune Co., isn’t a public trust, and its stewardship doesn’t include serving the public interest, no more than would running a bagel joint. Like the asset-stripping private equity buccaneers of the Blackstone Group, Zell’s business is capitalism, plain and simple. Having saddled Tribune with more than $8 billion in highly leveraged debt (he invested only $315 million of his own money in order to take Tribune private), now he has to sell assets and cut costs at a furious pace in order to keep his debt service from eating up his profit.
In Los Angeles, that means not only putting Times Mirror Square up for sale (condos, anyone?), but also means slashing 250 jobs, including 150 news jobs; cutting 15 percent of the paper’s pages per week, and, according to publisher David Hiller, “a redesigned flagship Los Angeles Times newspaper to debut in the fall, reflecting the work of the reinvent team.” If Zell’s editorially pared down, graphically tarted up and otherwise reinvented Orlando Sentinel is a sign of what’s to come, our local paper will soon be a cross between My Weekly Reader and a ransom note.
I’m not saying that every one of the 150 Times journalists who’ll be fired deserves a Pulitzer, but I am saying that a whopping proportion of them are assets that any community in its right mind would do all it could to keep on the job. I’m not claiming that print journalism is a swell business to be in right now, but I am contending that Zell’s ocean of red ink is more a consequence of his own debt-ridden acquisition strategy than of declining advertising sales and circulation, and that he’s punishing the city’s civic IQ to make up for his piratical swagger. I’m not blind to the advent of free Web-based news and analysis, but I’m also gimlet-eyed about the nature of much of online content: a farrago of opinion, rumor and propaganda, and most of it (like most of local television news) parasitically dependent on the dwindling band of reporters and editors for national papers and wire services who actually get out of their pajamas, wear out their shoe leather and attempt to honor journalistic standards. I’m not pretending that the judgment of Times correspondents and editors is beyond reproach—everyone has a tale of bias or neglect to tell—but I do maintain that the Los Angeles Times is nevertheless among the top four papers in the country and that it would be a crime against democracy to dumb it down in order to cover Zell’s monthly nut.
The problem with the idea of a newspaper being “in the business of satisfying customers” is that customers don’t always know what they want, and they certainly don’t always know what they need. What readers of the Times knew that they needed investigative reporters to spend months to expose lethal problems in Kaiser Permanente’s kidney transplant program? Or to reveal the resignation-worthy doings of state insurance commissioner Chuck Quackenbush? Or to show how California’s conservatorship system has been hijacked into a guardians-for-profit scheme that rips off the elderly and infirm? Enterprise journalism takes time, it’s labor-intensive, it tells us things we didn’t have the wit to know we need to know, it makes us a better society, and its future is endangered by return-on-investment Zellonomics.
While Sam Zell was eyeing Tribune, Beverly Hills businessman Albert Mizrahi paid $23 million for four buildings on Larchmont Boulevard. He immediately doubled and tripled rents, which forced longtime tenants like Larchmont Hardware and Van Dry Cleaning and Shoe Repair—Sam’s Bagels’ neighbors—to close up shop. Sam’s is hanging on, reportedly via a “historical status” deal, but I wouldn’t count on its lasting, and half a dozen other businesses on the boulevard are on their way out. Area residents were frustrated when they tried to stop what they saw as the destruction of Larchmont Village’s character, but City Councilman Tom LaBonge correctly told them “that’s a free-market issue.”
The future of the Los Angeles Times is also a free-market issue. As long as a real estate speculator obeys the zoning laws, he’s free to replace a local bagel joint with a high-end cupcake franchise. The same is true for the somewhat larger bagel business now owned by Zell, who is also a real estate speculator. In the deregulated era we’re in, it’s no doubt a retrograde sentiment to hold, but I’ll say it anyway: Too bad there’s no public interest obligation that a newspaper owner (or for that matter, a broadcast license holder) is legally required to fulfill.
To deal with his debt, Zell is in the midst of unloading Newsday to Cablevision for $650 million. If we’re really lucky, maybe he’ll have buyer’s remorse about the Times. Various options are kicking around town, like taking the Times nonprofit and running it out of a journalism school or community foundation, or like finding some white knight who doesn’t turn out to be another Wendy McCaw. Or maybe Tribune’s KTLA might become the premier pay-per-view destination for user-generated porn and could plow the profits back into exposing itself. Or maybe Tribune’s jalapeno-pumpernickel-with-a-shmear will turn out to be the next Pinkberry.
At this low point in print journalism’s morale, just about anything seems preferable to watching powerlessly as this slow-motion train wreck plays out.
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