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Crossing the Line

A Los Angeles Times Profit-Sharing Arrangement With Staples Center Fuels a Firestorm of Protest in the Newsroom--and a Debate About Journalistic Ethics

December 20, 1999|DAVID SHAW | Times Staff Writer


PREFACE: A Business Deal Done--A Controversy Born

CHAPTER 1: The Deal

CHAPTER 2: The Debate

CHAPTER 3: The Meeting

CHAPTER 4: The Decision

CHAPTER 5: The Hard Sell

CHAPTER 6: The Prelude

CHAPTER 7: The Visitor

CHAPTER 8: The Press

For the Record
Los Angeles Times Monday December 27, 1999 Home Edition Part A Page 3 Metro Desk 2 inches; 39 words Type of Material: Correction
Investment conference--Participants in the Philadelphia Inquirer investment conference are selected by members of the paper's newsroom staff but, contrary to what was reported in The Times last Monday, they are invited by Morningstar, the co-sponsor of the conference.

CHAPTER 9: The Wall

CHAPTER 10: Otis

CHAPTER 11: The Aftermath

Journalism Is A Very Different Business--Here's Why [see sidebar]

Another Staples-Like Proposal Was Made to Times [see sidebar]


PREFACE / A Business Deal Done -- A Controversy Born

The newsroom at the Los Angeles Times was in turmoil--in open revolt. For several years, pressures for higher profits had reduced the size of the news staff and the space available for news in the paper. Increasingly, business concerns seemed to be influencing editorial decisions in ways long forbidden at The Times and at all respectable big-city newspapers.

Then, on Oct. 10, The Times had published a 168-page special issue of its Sunday magazine, devoted entirely to the new Staples Center downtown; only after it was published did most of the paper's journalists learn that The Times had split the advertising profits from the magazine with Staples Center. That arrangement constituted a conflict of interest and violation of the journalistic principle of editorial independence so flagrant that more than 300 Times reporters and editors had signed a petition demanding that their publisher, Kathryn Downing, apologize and undertake "a thorough review of all other financial relationships that may compromise The Times' editorial heritage."

Downing did apologize, and she and her boss, Mark Willes, chairman and CEO of The Times' parent company, Times Mirror, acknowledged that the profit-sharing agreement had been a mistake. Passions have cooled somewhat during the past two or three weeks, at least on the surface, and Willes insists that recriminations over the Staples blunder should not be allowed to stifle creative thinking and risk-taking at The Times. Newspapers that don't take appropriate risks to meet the challenge of a rapidly changing media environment are doomed to die, he says. But many in The Times newsroom see the Staples affair as the very visible and ugly tip of an ethical iceberg of ominous proportions--a boost-the- profits, drive-the-stock-price imperative that threatens to undermine the paper's journalistic quality, integrity and reputation.

Some people in the newsroom have openly called for the resignation or ouster of Downing and Willes. Some even question the tenure of Michael Parks, the paper's top editor, who is widely regarded as having done too little, too late on the Staples scandal--and as having been either insufficiently vigilant in struggling against incursions by the business side or worn down after almost two years of fighting the incursions.

An Explosive Meeting

In a heated confrontation with a standing-room-only crowd of Times newsroom staff members in the paper's ground-floor cafeteria 18 days after the Staples issue of the magazine was published, Downing said she took full responsibility for the profit-sharing agreement and for the controversy that ensued. She, like Willes, had no newspaper experience before coming to The Times. He had been a cereal company executive for 15 years before taking charge of Times Mirror in 1995, and she had been in charge of legal publications before taking over as president of The Times in March 1998. She became publisher 15 months later and had been in that job for less than five months when the Staples scandal broke.

Downing said a "fundamental misunderstanding" of basic journalistic principles had led her to not tell Parks about the profit-sharing agreement. She said she had thought that if no one in the news department of the paper--including those who worked on the Staples issue--knew of the agreement, there could be no doubts about the editorial independence of the effort.

Even if she was right about no one in the editorial department having known about the profit-sharing agreement--and there remains widespread and understandable skepticism about that assertion--she was wrong about the preservation of the paper's journalistic standing.

The Times' credibility and integrity--ultimately the only commodities a newspaper has to offer--have been severely compromised at a time when public confidence in the press is already in deep decline. Other prominent news organizations have raised troubling questions about The Times' profit-sharing agreement, and many readers have called, written and e-mailed the paper with comments like the one from Jean Shin of Los Angeles: "The Staples Center controversy shook my faith in not only the judgment but the ethics of your paper. I have since canceled my subscription."

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