The Family Feud Behind a Media Fight

In 1995, Jeffrey Chandler decided to break with tradition and expose a family schism. A member of the large, extended and very private family that owned the Los Angeles Times, he had come to believe that the newspaper had become far too liberal under the control of his cousin, Otis Chandler.

It was time for The Times to return to its conservative roots, Chandler and his sister, Corinne Werdel, told Forbes magazine. “We have the inmates running the asylum,” Werdel said. “They’re so far out in left field.”

The siblings were especially upset with the paper’s coverage of gay rights and AIDS. “This is a mainstream paper, and the homosexual population is 1% to 1.5%,” Jeffrey Chandler said. “When you start featuring these kinds of stories the way The Times does ... my God, you’ve got a campaign going on here.”

Not much came of the complaints, or of a study the two reportedly commissioned around the same time. Never made public, the study, by a consulting firm, is said to have argued that the paper should adopt a more conservative stance, modeling itself after publications such as the National Review, the Weekly Standard and the Wall Street Journal. Werdel and her brother had limited power then to influence the paper or its parent company, Times Mirror Co.

Today, Jeffrey Chandler, 64, is at the center of power within the Chandler family, which sold Times Mirror six years ago to Tribune Co. of Chicago. As one of three family representatives on the Tribune board, he is a key player in the Chandlers’ fight to force the sale or breakup of the giant media company and could ultimately help determine the future of the Los Angeles Times, the Chicago Tribune, the Baltimore Sun, Newsday, KTLA-TV and other Tribune properties.

Like most Chandlers, he keeps a low profile -- the Forbes interview was a rare exception -- and declined to be interviewed for this article. But his ascent says a great deal about how much has changed -- and, in a sense, stayed the same -- within a family that was once considered the most powerful in Southern California and even today is capable of shaking up the newspaper and financial world.

The second-largest shareholders of Tribune, the Chandlers have challenged a management plan to buy back 25% of the company’s shares and cut $200 million in expenses. In regulatory filings, they have declared the Tribune-Times Mirror deal a failure and accused management of “strategic missteps” that have been “disastrous to investors.”

The descendants of pioneering Times publishers Harry Chandler and Gen. Harrison Gray Otis, his father-in-law, have earned a reputation for single-minded dedication to financial success, with a willingness to act boldly, even ruthlessly, to achieve it -- sometimes without regard for the welfare of the newspapers that created their family fortunes.

Tribune Chairman and Chief Executive Dennis J. FitzSimons remarked Tuesday that the Chandlers were acting out of self-interest, “at the expense of other stockholders,” a comment that echoed a statement by independent members of the Tribune board.

It was not the first time the Chandlers had been accused of brazen self-interest, a recurring theme throughout the family’s long history as business titans and power brokers in Southern California. Author David Halberstam once wrote that The Times, the family’s flagship, “was ancillary to the essential cause of the Chandlers, which was commercial profit and commercial expansion.”

David Laventhol doesn’t mince words about the Chandlers, the lead characters in a book he is writing about Times Mirror.

“I tell people, ‘It has such a simple story line,’ ” said the former publisher of The Times and president of Times Mirror. “ ‘They’re interested in their money, and that’s it.’ ”

The same could be said of many business owners and investors, of course. Businesses are supposed to make money. And some who know the Chandlers say it is unfair to generalize.

“You can’t paint them with one brush, because some of them are very philanthropic, and very generous and communityinvolved,” said Steve Meier, a former Times Mirror executive who heads the Pfaffinger Foundation, which was established in 1936 to help Times employees in need.

But neither that nor the fact that the concerns Jeffrey Chandler expressed in Forbes were essentially journalistic have doused a widespread perception that the Chandlers are more interested in money than in the fate or quality of the publications that have made them rich.

“The thing is,” said Alex Jones, author of books about the families that built the New York Times and the Courier-Journal of Louisville, Ky., “if you’re going to have a family-owned newspaper that’s going to last multi generations, it’s got to be something that the family draws psychic income from, not just monetary income. That’s what the Sulzbergers have at the New York Times. That’s what the Grahams have at the Washington Post.”

The Chandlers, he said, appeared to lack that sense of journalistic mission, and the sale of the family newspapers was “an economic, not an emotional, consideration.”

The fact that the Chandlers haven’t mentioned the quality of journalism in their criticisms of Tribune “speaks volumes,” he added.

The Chandlers at the center of the current dispute represent branches of the family that were effectively marginalized for several decades after Otis Chandler took over as publisher of The Times in 1960, leapfrogging his uncle Philip Chandler, who had been viewed as the heir apparent once Otis’ father stepped down.

Otis Chandler, who died in February, dramatically remade a parochial, right-wing newspaper into a respected product with a global reach and a more centrist bent. He also made it much more profitable.

But Otis Chandler alienated many in his deeply conservative family, consisting of the eight children of grandfather Harry Chandler and their descendants.

Chief among those who had reason to resent Otis was Philip Chandler, who not only lost his place in the line of succession but also suffered the humiliation of seeing the paper print a lengthy investigation of the conservative John Birch Society, of which he was a prominent supporter.

The Chandler saga can seem almost Shakespearean at times, no less than in this instance: Jeffrey Chandler, who was just 18 when Otis Chandler became publisher, is Philip Chandler’s son.

Otis Chandler stepped down as publisher in 1980, and over the ensuing two decades, his cousins seized the opportunity to reassert control over Times Mirror. Otis Chandler quit, or was pushed off, the governing board of the Chandler family trusts, which serves as the family’s power center, after deriding his relatives as right-wing “coupon clippers” in a 1996 interview with Vanity Fair magazine. In the same article, he also referred to the study commissioned by his cousins and said: “If we turned the paper into the far Christian right, as they would like us to, we’d be out of business in a year, if not sooner.”

Although seats on the board generally pass from generation to generation, none of Otis’ children was ever given a place.

Nor do they occupy any of the family’s Tribune board seats. In addition to Jeffrey Chandler, those seats are held by his cousin Roger Goodan and family attorney William Stinehart Jr.

The official Tribune biography identifies Jeffrey Chandler, who lives north of San Diego in Rancho Santa Fe, as one of the state’s largest avocado growers.

Goodan, 60, of Bow, Wash., who has spent his career working for an oil-field service company, is known as a sharp business executive. He is the grandson of May Chandler Goodan, one of Harry Chandler’s daughters.

“Of all the Chandler daughters, May Goodan was probably the most reasonable and moderate,” said author Dennis McDougal, who studied the Chandler family in researching his book “Privileged Son: Otis Chandler and the Rise and Fall of the L.A. Times Dynasty.” “She had a reputation for being a voice of logic on the family board when she was a participant. And Roger seemed to have that same kind of reasonable nature.”

Stinehart, 62, of Brentwood, is the latest in a series of lawyers who came from the Los Angeles firm of Gibson, Dunn & Crutcher to serve as the Chandlers’ family attorney, a position that gives him a seat on the board of the Chandler family trusts. He was pivotal in drafting the sale to Tribune, which was done with such secrecy that neither Otis Chandler nor Mark H. Willes, then the chairman and CEO of Times Mirror, was aware of the deal until it was done.

Like Jeffrey Chandler, Goodan and Stinehart declined to be interviewed for this story. “Sorry, I don’t comment,” Stinehart said before hanging up on a reporter.

It is not clear how much communication the three board members have with the 100-plus other beneficiaries of the Chandler trusts, or to what extent the family is in agreement about their course. A half a dozen other Chandler descendants either declined to comment or didn’t return phone calls from The Times. Warren “Spud” Williamson, the chairman of the Chandler family trusts, hung up on a reporter without waiting to hear why he was calling.

“They do not like the media, they do not like the press, they do not like the Los Angeles Times,” said Laventhol, the former publisher. “Particularly, they do not like the Los Angeles Times.”

The Chandlers say their dispute with Tribune is rooted in the company’s “dismal” financial performance over the last several years. Tribune executives say the dispute is about taxes.

The tax issue centers on the treatment of two partnerships formed by the Chandlers and Times Mirror in the late 1990s.

The partnerships, known as TMCT I and TMCT II (with the initials standing for Times Mirror Chandler Trust), were formed to allow the family to diversify its assets -- then consisting largely of Times Mirror stock -- without selling the shares outright, a transaction that would have resulted in a large tax bill.

Because of their elaborate financial structure, the partnerships stand in the way of efforts to break up Tribune through a spinoff of broadcasting interests or other steps. To do so would require unwinding the partnerships, resulting in a tax liability for Tribune of as much as $70 million.

FitzSimons, speaking in New York on Tuesday, noted that Tribune had been hit with a $1- billion tax bill last year, the result of a failed tax-avoidance strategy by Times Mirror.

“The company has no intention of assuming any additional tax liability,” he said. He added that the disagreement with the Chandlers “is not so much about strategy as it is about economics and tax risk.”

The Chandlers have a long history of antipathy toward taxes, as do many people in their rarefied tax bracket. They also are known for structuring deals that give them maximum income, which was a goal of the TMCT partnerships. When they have sold assets, such as the cable systems and TV stations that Times Mirror sold in the 1990s, they have pushed for aggressive tax advantages that have been challenged by other shareholders.

“They are so greedy,” said one former Times Mirror executive, Peter Fernald, who retired in 1984 as vice president for planning and development. “What they wanted was to constantly increase the dividends so they could live better.”

Fernald said he believed the constant push for higher dividends hurt Times Mirror by depleting its assets, leading the Chandlers ultimately to strike a deal with Tribune.

Their battle now with Tribune pits the heirs of Gen. Harrison Gray Otis against the corporate legacy of Col. Robert R. McCormick, the former Tribune publisher. The two men had a great deal in common. Both were bombastic conservatives who loathed labor unions, believed passionately in the future of their respective cities and mistrusted East Coast liberals.

Oddly, although Tribune wound up owning Times Mirror, it is the descendants of Gen. Otis and his Chandler son-in-law who have a greater influence on the corporation today than does the McCormick family.

Kristie Miller, a historian who lives in a Washington suburb, was the last descendant of Tribune’s pioneering family to sit on the company’s board of directors. She stepped down in 2001, in part, she said, because she believed that the Chandlers, with their family connection to newspapers, “would have the same feeling about their paper as I had about mine -- in other words, that it was part of the family legacy and they would want to do nothing to dishonor it.”

In a telephone interview, she said she didn’t know whether the Chandlers had acted as she had hoped.

“It’s hard to know what’s going on,” she said. “It’s like trying to figure out what’s going on in someone else’s marriage.”

Miller, McCormick’s great-niece, said she still owned a substantial amount of Tribune stock, as does her mother, and took an interest, although not an “obsessive” one, in the dispute with the Chandlers. She also retains a sensibility about the newspaper business that the Chandlers, other than Otis Chandler’s children, don’t commonly express in public.

“I’ve always said we’re not making soap flakes,” she said. “I think it’s a very special kind of business, and one that has a mission that is beyond making money, and it’s a privilege to be associated with an enterprise of that nature.”

Times staff writer Michael A. Hiltzik contributed to this report.