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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

And what of Parks? At the Oct. 28 meeting in which the staff challenged Downing, he said he had learned about the profit-sharing arrangement "after [the magazine] had been printed and so there wasn't an opportunity to put something in the paper." Parks says he still isn't certain of the exact date when he first heard about it, but he now thinks it may have been at a meeting in mid-September, perhaps Sept. 14, whereupon he says he told Downing that profit-sharing was an "unacceptable" practice. As of that date, though, the only portion of the magazine that had been printed was the cover, and fewer than one-third of them were done by then, according to Gary Killam, customer service representative for the Reno division of R.R. Donnelley and Sons, which was in charge of the printing. Killam says that the covers were finished Sept. 16 and the eight-page centerfold was completed the next day. The rest--the vast bulk of the 168-page magazine--was printed between Sept. 21 and 26, Killam says. Thus, Downing and Parks could have canceled the press run. They didn't do that.

If Parks' admittedly imprecise recollection of when he learned of the profit-sharing agreement is incorrect and the magazine was already largely printed, he could still have had the magazines destroyed. That's what William F. Thomas, editor of The Times from 1972 to 1989, says he would have done in that situation. "I would have burned them," he says. "You couldn't afford not to. If you take a big [financial] hit, that's too bad. You pay for your stupidity." But Downing and Parks didn't order the destruction of the magazines.

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.

When the magazine was distributed, as scheduled, with the Oct. 10 newspaper, The Times could have published a brief notice disclosing to readers the profit-sharing arrangement and Parks' belated discovery of it. They didn't do that either. Indeed, Downing and Parks say that they never considered any of those alternatives. Both say that they thought the editorial integrity of the magazine was intact and its quality high, and once Parks learned of the profit-sharing agreement and complained to Downing about it, they focused only on developing policies to prevent anything like it from happening again.

As the editor of The Times, Parks bears the final responsibility for all editorial decisions, just as Downing bears final responsibility for all business decisions. Both now admit that they should have published a disclosure of the profit-sharing arrangement on the day the magazine appeared. But an independent, six-week investigation of the controversy and of the conditions at The Times (and in the newspaper industry in general) that made such an event possible makes it clear that the scandal could have been avoided, or at least greatly minimized, had several other people also acted differently at various points in the publishing process and its immediate aftermath.

Ill-Served by Advisors

Indeed, a number of people at the paper think that whatever Downing's own mistakes, she was also ill-served by her senior team.

"If you're new and don't have much newspaper experience, you lean heavily on your advisors who have more experience," says Beth Sestanovich, advertising director of the Los Angeles region for The Times. "Where were those folks in this process? Where were her trusted advisors? Why didn't anyone with more experience step in and say, 'Whoa, this could be a problem'? We know there are meetings that went on about the whole magazine issue itself. Who was sitting in what room when? Was there any editorial participation in some of these meetings where it may have come up, even if it was in passing, as a subject? Maybe people weren't paying attention."

Good points. Good questions.

Sestanovich is very admiring of Downing and John McKeon, The Times senior vice president for advertising. But McKeon is one of those advisors who sat in meetings, knew about the profit-sharing deal and did nothing to warn Downing that it was improper. McKeon is the most experienced high-level newspaperhand who clearly knew about the profit-sharing arrangement early on. A veteran of more than 20 years in the business, most of them at a Times' sister newspaper, Newsday, in suburban New York, McKeon says that he learned of the profit-sharing arrangement on the magazine in March, before work even began on that issue. Downing, new to the business, may not have recognized the threat that the agreement posed to the newspaper's credibility, but why didn't McKeon instantly recognize--and tell his boss--that a newspaper just can't share a magazine's advertising profits with the subject of that magazine's editorial coverage?

"Nothing will excuse my not seeing the two together and saying, 'Shit, this is wrong,' " McKeon now concedes. But he has no explanation for why he didn't say--or even think--it was wrong at the time.

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