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Crossing the Line

SPECIAL REPORT / 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

Is Willes trying to distance himself from the whole affair? After all, he, not Downing, was the publisher when the contract was negotiated and signed--and when the decision was made to do the Staples issue of the magazine. But he says that he wasn't "directly involved" in any of those decisions. Downing, then president and chief executive of The Times, was taking over some of Willes' duties at the time in preparation for becoming publisher, and in keeping with his philosophy of "giving people more authority and accountability and responsibility than it looked to many like they could handle."

"If they have the right abilities and instincts," he says, "they rise to the occasion."

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.

The profit-sharing arrangement on the magazine wasn't a secret on the business side of the paper, though. No one there, from Downing on down, seemed to think there was anything wrong with it, and it was discussed quite openly for most of 1999. Downing says that while she deliberately withheld the information from Parks, she did not direct her subordinates on the business side not to talk about it to him or to anyone else in editorial. How could she have expected them not to mention it, at least in passing, if not in the course of discussing its implementation? Her answer to that question is "It worked"--i.e., no one did tell Parks.

But few at the paper seem to accept her explanation, and alternative scenarios have sprouted like sunflowers in Provence. Although some think that she did tell Parks and he either objected and was overruled or he didn't realize how grievous a mistake it would be, he and Downing deny that, and those who know him best scoff at those theories.

Foreseeing Problems

Parks was a Pulitzer Prize-winning foreign correspondent who spent 25 years covering such places as China, South Africa and the Soviet Union. "He's too smart to not have recognized it [as a problem], and I think his sense of integrity is too high not to have tried to do something about it," says Karen Wada, the paper's managing editor in charge of national and foreign coverage and special projects.

Others at The Times and elsewhere suggest that Downing--an attorney and an experienced businesswoman--had to recognize the conflict of interest inherent in the profit-sharing agreement. If she didn't tell Parks, they say, it was because she was determined to plunge ahead with the project anyway and feared he might object and obstruct. Although Downing has many critics inside and outside the paper, most people who know her well dismiss that theory. "I've never known her to lie or even to shade things to her benefit," Willes says.

But there is at least one other explanation for her not having told Parks: Given her lack of journalistic experience, it never occurred to her that she should say anything to him about the profit-sharing agreement, any more than it would have occurred to her to tell him that the paper had signed an advertising contract with, say, some minor local retailer. Although stories in Editor & Publisher magazine and in newspapers ranging from the San Francisco Examiner and the Daily News of Los Angeles to the Denver Post and Fort Worth Star-Telegram have erroneously said The Times had agreed to split $2 million with Staples Center, the profit-sharing agreement obligated The Times to pay Staples Center about $300,000; as Downing said in interviews after the arrangement became widely known, that's a relatively small amount of money for The Times, which will take in almost $1 billion in advertising revenue this year.

Of all the theories advanced so far, this is the one that would best explain why Downing didn't alert any of her subordinates to keep the profit-sharing arrangement secret from Parks; it didn't occur to her that there was any reason for secrecy. Even some of Downing's staunchest supporters don't automatically reject this theory. Dick Stanton, senior vice president and chief operating officer of the paper, says that while he's "not here to challenge the veracity of the publisher," he agrees that she may not have told Parks simply because "she didn't think it was a big deal. . . . That's much closer to the truth."

So why did she say she had deliberately withheld the information to preserve editorial independence? Was it an ex post facto rationalization designed to make her intentions, if not their outcome, appear honorable?

Downing denies this and insists that her original explanation for not telling Parks is the truth.

The Final Responsibility

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