Converge Me Up, Scottie-- May/June 2000

May/June 2000 | Contents

CONVERGE ME UP, SCOTTIE
Tribune Beams Toward A Multimedia Future

BY NEIL HICKEY

Two days after the Tribune Company of Chicago announced plans to absorb Times Mirror, the Los Angeles Times's Pulitzer Prize-winning TV critic Howard Rosenberg abruptly decided that station KTLA -- owned by Tribune -- was "the best station on the planet." ("Love you, man!"), the perfect model of "intelligence, integrity, honesty, humility, kindness, goodness, public service . . . ." In that March 15 column, Rosenberg declared he'd taken a fresh look at KTLA's programming and found hitherto unsuspected glories: the KTLA Morning News, for example, and its madcap onscreen staff ("a newscast can't have too many stand-up comics"); also, "that sweet old dearie" Sally Jessy Raphael; and reruns of The Nanny ("Funneeeeee!") He could scarcely convey "the thrill" of becoming part of KTLA's family. "And did I mention," he wondered, "how much I love Dawson's Creek?"

Then the comic mask fell: "You can see the problem: These TV entities are part of my beat. Read that to mean potential conflict of interest." Noting that Tribune's surprise takeover extended the trend of concentrating media power in fewer hands, he asked: "Is bigger necessarily better?"

For stockholders like me, possibly. But it's hard to see how the wider public stands to benefit . . . . Streamlining ownership this way hardly promotes diversity. Just as worrisome are the potential conflicts down here on the lowly pavement created by the incestuous couplings taking place in the towers of corporatedom. [R]eaders [will] have a right to be ever more skeptical about what is written about TV in this column. If I praise Tribune properties, will it be because I think they're worthy or because we're family, and I have my own financial stake at heart? If I fault competitors of Tribune properties, will it be legit or chauvinism? And conversely, if I'm critical of Tribune properties, will it be deserved or will I be overcompensating to show my independence?

Rosenberg's fears are old stuff these days, and have been, ever since Time magazine critics agonized over how to review Warner Brothers movies when the two companies hooked up way back in 1990. And besides, the proposed Tribune/Times Mirror marriage is small potatoes ($8 billion) compared with that earlier one ($14 billion); and it's off the radar screen when contrasted with AOL's swallowing of Time Warner ($135 billion) in January. Some issues -- self censorship, for example -- will always be with us in this new age of mega-media. They're as crucial as ever, but get lost amid rampant theorizing over the larger implications of media conglomerating. [See special report on self-censorship, page 41]

Tribune and Times Mirror had kept their stunning merger a tight secret from the press and public right up until the announcement -- as had AOL and Time Warner -- even though Tribune executives conducted a self-promotional confab with analysts, bankers, and institutional investors on Friday, March 9, during which nobody breathed a word about the negotiations with Times Mirror that were just concluding. "Looking ahead, we're aggressively moving to exploit multimedia opportunities in broadcasting and publishing to their fullest extent," said Tribune chairman, president, and c.e.o. John W. Madigan. The conferees didn't have long to wait to figure out what he meant.

Days later Madigan announced "the nation's premier local market multimedia company" -- if not a Goliath, then a muscular David, commanding eleven newspapers -- most importantly in New York, Chicago, and Los Angeles -- twenty-two television stations, four radio stations, a magazine publishing arm, the Chicago Land TV (CLTV) all-news cable channel, part ownership of the WB and the Food networks, and a treasure chest of dot com goodies including stakes in AOL, iVillage, iBlast Networks and others. And, yes, the Chicago Cubs.

Tribune is hardly the only multimedia practitioner but it is surely one of the most devoted. Multimedia means not only getting your news out around the clock through a variety of avenues, but offering advertisers a richer menu of choices for how to spend their money with a single company. Audiences and advertisers, goes the argument, will gradually drift away from newspapers that can't deliver customized, interactive real-time media. According to Forrester Research, "the era of local media consolidation is upon us" because the loss of national news and classified advertising to the Internet has made more newspaper mergers inevitable.

Asked to crystallize in one formula the main reason for Tribune's decision to buy Times Mirror, Jack Fuller, president of Tribune Publishing, puts it succinctly: "Having television and newspapers in three major markets in the country is a powerful position to be in in a changing environment. So whether it's getting national advertising into our newspapers, or staking out a position on the Internet, or moving toward a broadband environment in which print, video, and audio all will be elements -- having that position in the strong spine of a network in the major cities of the country looked to us to be strategically an important move."

Multimedia came to the Trib early when publisher Col. Robert R. McCormick in the 1920s perceived synergies in broadcasting. Hence, WGN-AM, then WGN-TV in the forties, and later WPIX in New York, KTLA in Los Angeles, WDBC in Washington, and eventually 21 other broadcast properties.

In most Tribune newsrooms and in its Washington bureau, reporters and editors from print, television, and the Internet sit at special multimedia desks to share their stories. In Orlando, for example, the Sentinel newsroom has a kind of space-ship command post run by a "deputy managing editor for multimedia" who coordinates the work of an online editor, photo editor, graphics editor, and local news editor. A print reporter may write a story for the Web site in the morning, appear on television to update it at noon, and then bang out the piece in long-form for the next day's edition of the paper. That rolling deadline means that news emits from the Sentinel around the clock instead of once a day. Print reporters get professional coaching about how to look good on television. Staff photographers carry a digital TV camera along with their still cameras so they can cover for print, TV, and the Web site (which displays full-motion video). In the near future, the Sentinel expects to create a so-called "content management system" that will let them ship stories at the touch of a button to all the other Tribune newsrooms around the country.

In Chicago, an eye-catching feature of the newsroom is a 24 x 26-foot platform where print reporters come to deliver reports to remote-controlled television cameras. An "intergroup operations coordinator" works out which of the Trib's stories will get the multimedia treatment. The twenty-person staff of Chicagotribune.com, the paper's Web site, stands ready to "repurpose" Tribune material or contribute news to the paper. WGN-TV and radio pass along video and audio to the Web. And so forth, in ever-evolving permutations. Nobody gets paid extra for spreading one's talents across diverse media, and that's an issue that may bubble to the surface in the future. Recognition is given, however, at times of performance review.

Beyond such techno-savvy efforts, Tribune's portfolio of Internet investments is worth about $2 billion. It bought into AOL in the early 1990s when hardly a soul knew what an ISP was. Sites like CareerPath.com, BlackVoices.com, Apartments.com, Go2Orlando. com, and others are all pieces of the grand strategy of keeping Tribune's inky thumbs in many New Media pies.

That strategy derives in large part from one man, Charles T. Brumback, who -- along with McCormick, the paper's haughty suzerain for over forty years -- was a key sculptor of Tribune's contour. Tough, abrasive, opinionated, Brumback -- a Princeton grad who won the Bronze Star in Korea -- retired as board chairman at the end of 1995; Madigan is his chosen successor. "I think newspapers are in an ideal position to be around for a long time," he told CJR recently, "but they've got to change the way they do business." Decades ago, he worried that newspapers would be made obsolete by emerging technologies and he started looking at complementary ways to deliver news. Papers that put all the new journalistic tools to good use would prosper, he decided, "but those that keep looking in the rear view mirror are going to go down with the Titanic."

Newspapers are no longer the exclusive "funnel" they used to be, Brumback says, and readers don't scrutinize them systematically front to back anymore because much of that news is available elsewhere. "That's a hard thing for many professional journalists to cope with." So too is being bought out and run by a distant landlord, but Brumback is impatient with that complaint. "I don't know where they get this stuff -- run from Chicago! Ask the people in Orlando or Fort Lauderdale if they're being run from Chicago." He's peevish too about journalists who "are scared to death that a new owner will know as much about what they do as they know themselves."

Many Los Angeles Times readers were, in fact, nervous after the sale. "Bummer!" one wrote the paper. "Somehow I feel like someone just cut down the family oak tree that was planted by great-great-great grandad and then sold it for firewood." Another: "I am in mourning . . . and feel a sense of loss and betrayal . . . . The Chandlers gave their loyalty to money rather than to the community."

In the endgame, that was true, but for more than 100 years the family and its paper had been part of Los Angeles's DNA, a crucial ingredient in the city's growth and cultural life. But Tribune made them an offer they couldn't refuse (almost double Times Mirror's stock valuation), which killed two birds with one stone: it makes the family richer than ever; and at the same time ends the tumultuous reign of Mark Willes.

Most Times staffers judged the Chandlers' sell-out as the final indignity after five years of Willes, a businessman with no journalistic background who took over as chief executive and attempted to revolutionize the newspaper business. The catalogue of his misfortunes is well-known, climaxed by the decision to split the advertising profits from a special section with the Staples Center arena, which happened to be the subject of that section. In spite of all that, the Times's economic fortunes were on the rise. Ad volume was up 13.4 percent in 1999 over the previous year; the company's stock was at an all-time high.

Enter Tribune and its boss, John Madigan, another non-journalist, who came up through the ranks of brokerage houses like Duff & Phelps, Paine-Webber, and Salomon Brothers. After the acquisition, he shot off an internal memo to Times Mirror employees, offering soothing words ("It is an honor to welcome you to the Tribune family; my commitment is to show you the respect you deserve for your many accomplishments."), and also a rationale for the buyout ("The newspaper industry is consolidating, and the only way to survive and prosper in the face of this trend is to have greater size and scale."). In a second internal note, Jack Fuller stroked his new employees: as a member of the Pulitzer Prize board, he'd been reading their work "with pleasure, and at times envy. Your newspaper is one of the beacons of the profession."

To Fuller, in fact, as overseer of all Tribune newspapers, would fall the task of melding the Times to the Tribune culture. He's well suited for the job: a graduate of Yale Law School; a Pulitzer Prize winner himself for Trib editorials; editor of the paper from 1989 to 1993; book writer, including News Values: Ideas for an Information Age, a treatise on the journalist's craft. Fuller hurried to Los Angeles days after the takeover to face the Times staff.

"I went out there because I wanted to put a human face on the Tribune Company," he says. "A buyout like this is an anxiety-creating event. It's going to take a good long time for all of us to get to know each other, but I wanted to start that process." Some staffers asked to know more about the Trib's editorial philosophy. "I think I was able to reassure them that we're pretty much journalism fundamentalists about values, and that they have nothing to worry about on that score."

Will Tribune be a hands-on owner, shaping Times editorial policies and practices? "I told them I believe that newspapers have to be edited where they live; that they have an intimate connection with their own community, and that running them remotely, from an editorial standpoint, is a fool's game." How about staff reductions? "You have two corporate staffs now; in the end, you'll have one."

Tribune is, indeed, notoriously "efficient" -- allergic to waste. The company's profit margin last year was 29.2 percent, the highest of any newspaper company, leaving the behemoths Gannett and Knight Ridder in the dust. (Times Mirror's was 18.2 percent.) Its Marine Corps discipline in controlling costs has made it a lean, mean machine. For three straight years, Tribune has been number one in the industry on Fortune's list of the most-admired companies in America.

Unarguably, the great Los Angeles Times will henceforth take its orders from the Tribune Tower, 1700 miles away. It's suddenly "a vassal state," says Michael Miner, senior editor and media columnist of the Chicago Reader, an alternative weekly; and no matter how much autonomy it gets -- or appears to get -- Tribune will shape its destiny. Many of Times Mirror's 15,000 employees are finding that depressing. But it could have been worse, Miner muses: e.g., Murdoch or Hollinger (who owns the Chicago Sun-Times). "The Tribune, which has a reputation for taking good journalism seriously, is more likely than almost anybody who might have bought the paper to keep it respectable and important."

Two schools of thought -- at least -- confront the question: is the merger good for journalism or bad? Robert Giles, executive director of the Freedom Forum Media Studies Center, argues for the affirmative. His reaction: "very positive" because Tribune is a leader in media technology that permits news distribution across a variety of channels. "This truly has got to be the future of the American newspaper business."

Well, not exactly, says Consumers Union's Gene Kimmelman, who calls the merger part of "a very, very dangerous trend." If the deal goes through unchallenged Tribune will own newspapers in major markets -- New York, Chicago, Los Angeles -- where it also owns television stations, in direct violation of long-standing government rules prohibiting such cross-ownership. That constitutes "excessive concentration of power in the local media market that we think ought to be addressed. We're going to oppose it." So will many other consumer activist groups. They'll all be swimming upstream, Kimmelman admits, because there are now more news outlets than ever -- cable, satellites, Internet, and countless others on the way via digital broadcasting -- so the rule is seen by some as outmoded, unfair, and counterproductive. But, says Kimmelman, "beneath the surface, what's hidden from most citizens, is that a very few large entities have substantial ownership stakes in many of these outlets," and thus exercise undue control over the flow of information.

Tribune's Fuller hotly dissents. The rule is just plain unconstitutional, he says, and the company is ready to fight that premise through the courts, even though the issue may not be crucial until its broadcast licenses come up for renewal around 2006. Tribune has laid this siege before: when it acquired Miami's WBZL-TV in 1999, it was in technical violation because it also owns the Fort Lauderdale Sun-Sentinel in the same market area. Tribune was ready to prosecute the case all the way to the Supreme Court but the FCC came through with a waiver. The company is threatening legal action again if the Times Mirror deal is imperiled.

In digesting Times Mirror, Tribune, has, in effect, steamrolled over all concerns about government restrictions on who can own what. (Broadcast/print combinations are legal, by the way, if they pre-existed the 1975 rule.) "We have made no secret for some time," Fuller says, "that we think the cross-ownership rule is anachronistic and that we're going to challenge it wherever we can. Our position is that we're not just going to sit there and wait until the government decides to act. The world is moving at Internet speed, and we have to move with it." He can derive confidence from knowing that the massed armies -- powerful in their collective influence -- of both broadcast and newspaper industries are behind them, and so are influential Republican chairmen of relevant committees of Congress: Senator John McCain of Arizona, Senate Commerce Committee; and Representative Billy Tauzin of Louisiana, House Telecommunications Subcommittee. ("The days when network news and big-city editors were the dominant opinion-makers are long over," McCain said last fall when introducing legislation to kill the rule.)

On the Democratic side, President Clinton and Vice-president Gore oppose cross-ownerships, and so do such veteran and passionate Democrat students of telecommunications law as Senator Ernest Hollings of South Carolina and Representative John Dingell of Michigan. Those officials agree with consumer activists that if the government relaxes the ban to suit Tribune, mergers could ensue that would further concentrate power in fewer hands. Thus, this November's election may have an effect on Tribune's grand strategy -- and on that of every other news company that's poised to invade the wilder shores of multimedia.

Journalists differ about the efficacy of spreading their talents thin across three or four media -- print, television, online, radio -- in the course of a day's work. Is it counterproductive, distracting, inimical to deep, thoughtful reporting and analysis? Former New York Times executive editor A.M. Rosenthal at a recent panel sponsored by the Columbia Graduate School of Journalism declared himself "bothered" by newspersons having to deal with multimedia chores in the crowded hours available to them each day; and he sternly resists the notion of reporters "working for two or three different bosses."

Multimedia, in truth, is not necessarily the wave of the future for most of the nation's 1500 dailies: it's expensive and complex; the electronic components must be firmly in place; the multimedia command post needs a trained team of specialists; and the several staffs must cooperate seamlessly, noncompetitively, and enthusiastically. The experiments so far at Tribune and elsewhere have been promising on the editorial side, but the jury is still out on whether they're good business. At Tribune Interactive alone, which runs Chicagotribune.com, the development losses last year were $30 to $35 million, and are estimated by the company as $40 to $45 million for 2000.

Another issue: in a transcontinental chain of newspapers feeding each other parts of their daily news and feature output, will local news eventually become a neglected child as editors give shorter shrift to important parochial stories in favor of ones that might interest readers elsewhere in the country, and fill column inches for sibling papers?

One of those newspapers doesn't exactly fit the vision: Newsday is dominant on Long Island and has a strong presence in Queens but very limited circulation in Manhattan and Brooklyn, and doesn't distribute in the rest of the region -- raising the issue: does the paper need to expand in order to fulfill Tribune's grand design? Ironies abound here. Back in 1919, Joseph M. Patterson, grandson of Tribune founder Joseph Medill, created the New York Daily News (eventually dubbed "New York's hometown newspaper") which, by the late 1940s was the top-selling paper in America with 2.5 million copies a day. Forty years later, bad management and bitter union battles had the paper hemorrhaging money by the hundreds of millions of dollars; Tribune peddled it to the eccentric British press lord Robert Maxwell in 1991.

Just four years later, Times Mirror lost its own Manhattan presence when Willes, in a fit of cost-cutting, closed down New York Newsday, a metro version of the paper. Thus, both Tribune and Times Mirror have given up on efforts to run a newspaper in "the city that never sleeps." Will the company try again? That speculation is "premature," says Jack Fuller. But he didn't say no.

Los Angeles is now the largest U.S. city with no locally owned paper. The Tribune deal is the largest newspaper merger in history, bigger than McClatchey's buyout of the Minneapolis Star Tribune (1998) and the New York Times Company's purchase of the Boston Globe (1993). The compact is either a marriage made in heaven -- as some analysts have described it -- or one more skid down the slippery slope of ominous media agglomerations.

Or both. *

Neil Hickey is editor-at-large of cjr.