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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

Several people in the editorial department also had an opportunity to do something that might have ameliorated the damage from the Staples issue, if not before the magazine was written and edited, then certainly before it was distributed.

Two of the paper's four managing editors--John Lindsay, whose duties include oversight of the Sunday magazine, and John Arthur, whose duties include oversight of the Sports department--attended at least one meeting in early March at which other participants say information on the profit-sharing arrangement was almost certainly available in one form or another, although it may not have been discussed in a way that would have been clear to the editors. Lindsay and Arthur, both of whom vigorously opposed using the magazine for Staples Center coverage for other reasons, insist they neither heard nor saw anything about profit-sharing at that meeting or at any subsequent meeting. But Lindsay, probably Arthur, Alice Short (the editor of the magazine), Bill Dwyre (the sports editor, whose staff contributed most of the articles to the magazine) and several other low- and mid-level editors and even some reporters all learned of the profit-sharing before publication--some more than three weeks before publication--and yet no one thought to suggest to Parks or to their immediate superiors that the magazines be destroyed or that a disclaimer / disclosure be published.

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.

"A great many of the problems in journalism can be, if not eliminated, greatly ameliorated by disclosure," says Joel Kramer, former editor and publisher of the Minneapolis Star Tribune and now a senior fellow in the journalism school at the University of Minnesota.

Dismay but Not Anger

Later, around the time the magazine was published or shortly thereafter, some people in the newsroom began talking about the profit-sharing arrangement, says Tom Furlong, the deputy national editor. "There was buzz in the newsroom. . . . It was out there." But while those who knew were clearly dismayed, no one seemed angry enough to organize a protest or demand remedial action.

"Why did it take so long to register?" Furlong asks. Why weren't people outraged? "I don't know," he says. "The fuse was lit for several weeks before the bomb went off. I don't really have an explanation for that. I can't explain it. It's kind of a mystery to me."

But the vast majority of the paper's reporters and editors--including the half-dozen or so leaders of the protest movement that ultimately did materialize--didn't learn about the profit-sharing arrangement until it was reported in the New York Times, more than two weeks after the Staples issue of the magazine was published. When they read that story, they got very angry indeed. They not only felt betrayed, they realized they faced an even bigger mystery: How could this have happened? How could one of the three or four most respected newspapers in the country--a newspaper with 23 Pulitzer Prizes to its credit--have entered into such an egregiously improper financial relationship?

The solutions to both mysteries make for a tangled tale of ignorance and arrogance, of blind loyalty and bad judgment, of deadened sensibilities and diminished standards.

CHAPTER ONE / The Deal

Tim Leiweke is the president of Staples Center. Given the political realities in Los Angeles, he knew from the beginning that he would need what he called "private dollars" to help build the new arena; unlike some cities, Los Angeles wasn't going to use a large amount of taxpayer dollars to pay for it. Staples agreed to pay $116 million for naming rights at the arena, but the arena would ultimately cost $400 million, and Leiweke needed a lot more. So, starting about four years ago, he started talking to big-name companies--Bank of America, McDonald's, Pacific Bell, Anheuser-Busch and United Airlines, among others; he wanted them to become what he called "founding partners" of the arena, and he got 10 of them to agree.

The deals made with the founding partners varied in some of their particulars but, in essence, each partner was asked to put up a substantial sum of money and, in exchange, each would receive various exclusive rights. McDonald's would be the only hamburger franchise in the arena, for example, and Anheuser-Busch would provide the only beer to be sold. In addition, each founding partner would be the only one in its particular field to have its name on signs inside and outside the arena and--among other benefits--each would have a suite of seats inside the arena.

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