The Deal From Hell
by James O’Shea
(Public Affairs, $28.99)
James O’Shea’s book, subtitled “How Moguls and Wall Street Plundered Great American Newspapers,” sounds like it reads as one man’s version of how and why the U.S. newspaper industry imploded.
Actually, the book actually tells a narrower story, the 2008 bankruptcy of Tribune Company, parent of the Chicago Tribune, Los Angeles Times, Orlando Sentinel and numerous other newspapers and television stations. Figuring prominently toward the end of O’Shea’s story is Chicago-based financier Sam Zell, who risks more than $300 million of his own money — and billions in loans from U.S. banks and brokerages — to convert Tribune from a shareholder-owned to an employee-owned company.
As readers of the business press know, Zell’s recapitalization of Tribune as an employee-owned company tanked in less than two years. A collapsing economy and severe falloff of advertising revenue were too much to support the debt load. Along the way Zell and compatriots, including former radio executive Randy Michaels, disgraced themselves in the eyes of O’Shea and Tribune Company’s journalists. The newsroom crowd was relying on Zell’s promise to inject new vitality — and capital — into newspapers caught in cost-cutting spirals.
Instead, according to O’Shea’s telling, the Zell team spent its time cutting millions more from costs, firing hundreds of journalists and conducting a road-show to Tribune newspapers where he challenged time-honored (and costly) newsgathering practices, often engaging in profanity-laced confrontations with reporters and editors.
O’Shea, a distinguished former foreign correspondent and prize-winning reporter and editor, lost his job as editor of The Los Angeles Times in the process. Looking back on the saga, he defends what he sees as the duty of newspapers to pursue public service journalism. In his view, newspapers must uncover corruption, expose crooked politicians, shine a spotlight on lying public servants and generally raise hell to keep democracy healthy.
But here are a few conundrums: How can newspapers afford high-brow journalism when advertisers shift more and more spending to digital media? How do newspapers replace classified advertising that’s been rendered uneconomic by free sites like Craigslist?
The short answer is that newspapers no longer can afford to cover the news as they once did. More and more they must ask themselves if they can afford to send their own reporters to cover Hurricane Katrina or the war in Afghanistan in light of others who are already doing it.
Zell could have been more diplomatic in his critiques of the overlap and duplication at Tribune newspapers; but he had a point.
O’Shea acknowledges that newspapers can’t exist without robust profits needed to buy printing presses, pay Teamster contracts and cover the cost of reporters traveling to hurricanes and revolutions. But he also doesn’t come to terms with the imperative to survive, the iron-clad reality that spending must fall — and quickly — when revenue shrivels.
The author also despises the surveys from the publishing side of the house showing that many readers are seeking gossip about the Kardashian sisters and couldn’t care less about the latest scandal at the Food and Drug Administration.
Few Americans over the age of 40 can imagine a world without newspapers, in which bloggers and self-appointed reporters are the sole source of news, presented without editing or approval from the solons at The New York Times or The Washington Post. On the other hand, few Americans under the age of 30 subscribe to newspapers.
O’Shea, after leaving Tribune, has helped found Chicago News Cooperative, a non-profit dedicated to producing public service journalism, the kind meant to win Pulitzer Prizes. Similar ventures are popping up here and there; eventually a new business model will be found that will support the important stories that are crucial to helping an informed public make good decisions. That model almost certainly won’t involve a printing press.