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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

Throughout the newspaper industry in recent years, The Wall between the news and advertising departments has been crumbling as papers search for ways to reverse declining readership and locate new sources of revenue. Editors and executives in the advertising and other business departments meet regularly and often at much lower levels than ever before. Papers negotiate business deals with sports teams to have their names prominently displayed--and their papers sold--in arenas old and new. They publish themed travel sections--on cruises, the Caribbean, skiing--because such sections are easy to sell to advertisers. They establish Web sites where the line between news and commerce is especially fuzzy and the opportunities for profits--and conflicts of interest--are plentiful.

Some papers also publish a large number of advertorials. The Times will take in about $40 million this year from advertorials--about 4% of its total advertising revenue. Some advertisers prefer advertorials to traditional advertisements because they hope the advertorials will be mistaken for genuine editorial material and thus seem more credible. That is why they use stories and photos and newspaper-style layouts--and why newspapers try to make sure the distinction between editorial and advertorial is clear. At the Washington Post, all advertorials are supposed to be approved by Executive Editor Leonard Downie to be sure they "conform to the rules--clearly marked . . . not in any way meant to look like a newspaper story, consistent with the credibility of the paper."

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.

Howard Tyner, editor of the Chicago Tribune, says his paper has few advertorials because "even with some sort of editorial oversight, there is always the attempt by the advertiser to make the content not look like an advertisement." For that reason, the editorial department has "absolute veto power" over advertorials, says Dennis Grant, the Tribune's vice president for advertising. "That's one reason we have so few advertorials . . . maybe a tenth or two-tenths of a percentage point of our total revenue, meaningless dollars."

Enforcing Standards

Perhaps the most obvious blurring of news and advertising priorities is in the proliferation of special sections on subjects such as cars, mutual funds, e-commerce and personal technology that are now published by many papers, including the New York Times and Wall Street Journal.

These are editorial sections, not advertorials, but in an Editor & Publisher poll of newspaper editors and publishers last month, 41% said their papers had published special sections specifically to get advertising revenue even though they knew the sections had "little reader interest."

Joseph Lelyveld, executive editor of the New York Times, acknowledges that the special sections in his paper are also "advertising driven" and wouldn't be done if they were not profitable. Like Paul Steiger, managing editor of the Wall Street Journal, Lelyveld says the subjects for the sections are determined jointly by the editorial and advertising departments. Both editors insist, however, that the sections must meet the editorial standards of the rest of the paper, and most editors elsewhere praise their quality.

"Far from being embarrassed by the content of those sections," Lelyveld says, "we're proud of them."

Lelyveld and Steiger, like many other editors, say their papers are equally circumspect about another emerging and particularly troublesome area of revenue generation that many newspapers are now pursuing--the sponsorship of various conferences, fairs, festivals and other events designed not only to make money but to promote the paper and help it connect on a more personal level with its readers.

The Los Angeles Times is an industry leader in this field, with an annual Festival of Books, Investment Strategies Conference, Small Business Strategies Conference, Festival of Health and Travel Show. (The Festival of Books was not created as a revenue-producer but as a means of celebrating the written word--and, not incidentally, promoting The Times. But the festival has been so successful that it too is now profitable.)

For most of these Times events, the special events staff and others on the business side of the paper handle financial, travel and various other arrangements, while the editorial department handles the program. On the Investment Strategies Conference, for example, Tom Petruno, senior markets editor in the Business section, has selected and invited all the speakers and panelists for the first three conferences.

Similar events have been discussed at the New York Times "from time to time," Lelyveld says, but the discussions "never got very far. I don't see how it can be done without compromising the news report."

As the Post's Downie puts it: "You certainly wouldn't want to be in a position of inviting someone from Merrill Lynch, whom you cover, and they think they're doing you a favor . . . or vice versa."

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