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SPECIAL REPORT / CROSSING THE LINE

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

Mark Sande was probably the key player for The Times in those early discussions. Many critics accused Willes of wanting the general managers to function as business executives in the newsroom, telling editors what stories to run and which ones to kill and how to cut costs and curry favor with advertisers. But that wasn't what Willes intended nor what Sande did. Every day, Willes had said, the editor of each section of the paper comes to work determined to make that section the best he can journalistically; why not have one person on the business side equally determined to maximize the commercial potential of each section. That was Sande's job, and Dwyre quickly came to like and respect him.

"He was protective of editorial integrity," Dwyre says. "He blocked any intruders [from the business departments of the paper]. He felt like part of the team."

'A Great Deal'

Apparently, some people in the advertising department weren't very happy about that. They didn't consider him a team player, and on Feb. 16, Sande says, he was told he was "difficult to get along with" and therefore would no longer be general manager of the section. He was offered another job but chose to leave instead.

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.

Now, some people at the paper seem to want to make Sande the scapegoat for the debacle that ensued. They say that he made a bad deal with Staples to begin with and then compounded that by suggesting that the Los Angeles Times Magazine be used for the profit-sharing venture.

Downing is not among those who blames him. On Oct. 14, 1998, two months before the founding partner contract was signed, Downing sent a fax to Willes, who was out of town, telling him that the paper had "agreed in principle to be a founding partner" and praising Sande for having negotiated "a great deal." She repeated that praise in a recent interview. Leiweke goes even further. "Mark Sande made the best sponsorship deal anybody made," he says.

Moreover, Sande denies having wanted to use the Sunday magazine for the Staples profit-sharing. "I wanted either a commemorative book or a glossy, stand-alone magazine, produced by sports, separate from the regular Sunday magazine," he says. Dwyre and Jaffe back him up. "His job was to get revenue for the section," Dwyre says. "He wouldn't get credit for revenue in the magazine."

Opposition to Magazine

But it almost doesn't matter what Sande did or didn't want or did or didn't do. He and others involved in the discussions say that he was out of the loop on Staples decision-making as of Feb. 16, and it's clear from memos written after that and from interviews conducted recently that the decision to use the magazine to satisfy the Staples commitment wasn't made until more than a month later. Until then, two other options were still on the table:

* Sande's "glossy, stand-alone" magazine, to be produced largely by the sports department.

* An advertorial section.

At first, all the key business executives were opposed to using the Sunday magazine. Sunday magazines in newspapers are a troubled, often money-losing lot. The Miami Herald and Denver Post pulled the plug on their magazines last year, and at least 10 others have folded since 1990. The Los Angeles Times magazine loses $4 million to $5 million a year, an average of about $100,000 an issue, and Holly Bowyer, then the magazine's general manager, was one of many who initially didn't think the sales force could sell enough advertising to make it worthwhile (though she later became a strong proponent of doing a Staples issue of the magazine).

James Helin, senior vice president and chief marketing officer of The Times, says John McKeon, the advertising boss, pointed out that to give Staples $300,000, "we'd have to make $600,000. That's a lot. He said, 'Let's just cut them a check and ship them the money.' " McKeon says that he doesn't specifically recall making that statement, "but it sounds like me." The whole point of the profit-sharing agreement, though, was to reduce the amount of out-of-pocket cash The Times had to pay. The paper was contractually committed to pursue " joint revenue opportunities." Cutting a check for Staples wasn't an option.

McKeon says he now wishes he could say he objected to the profit-sharing concept on ethical grounds, but he acknowledges that his only objections at the time were economic. He didn't think the magazine would be profitable enough to fulfill the $300,000 commitment, and even if it were, he didn't want to give away half the profits.

CHAPTER THREE / The Meeting

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