A Publishing Soap Opera Swirls : Newspapers: Robert Page, ousted as the head of the Daily Pilot and other publications, and Elliot (Skip) Stein Jr., chairman of Page Group, are at center stage as the main antagonists.

The ouster of Robert E. Page earlier this week from the publishing company that bears his name was the season finale to a yearlong soap opera that saw the nationally known newspaper executive embroiled in conflicts with his business partners as well as with some employees.

The accusations that surfaced in a lawsuit filed against him raise the specter of wasteful spending and sloppy management at Page Group Publishing Inc. in Costa Mesa. Page denies the claims and counters that some of his accusers have profited from a deal that saddled Page Group with a money-losing magazine.

But from its start in late 1989, the Page Group’s partners appeared unrealistic in what they expected from the newspaper properties they initially bought--the Orange Coast Daily Pilot in Costa Mesa and the Glendale News-Press.

“There was a certain inevitableness about this from the start,” one insider said. “Perhaps both sides went in with rose-colored glasses on. They went in with high hopes, but not a lot of good, hard facts. They saw the glamour of Southern California--the Newport Beach market, the possibility of the Beverly Hills market--and figured they could turn it around in a year.”

The Pilot, which at 16,000 circulation is twice as large as the profitable News-Press, has been losing money for about 12 years and would need much more time to return to profitability, the insider said.

Behind Page Group are some powerful, though passive, investors, including former Secretary of State Henry A. Kissinger, Hollywood producers Peter Guber and Jon Peters and Chicago industrialist Lester Crown.

Guber, Peters and Crown own a stake in Page Group, while Kissinger is one of the limited partners in the publishing firm’s majority shareholder, Commonwealth Capital Partners Ltd. in New York. About a dozen investors put $70 million into Commonwealth for a variety of investments.

But on center stage are 54-year-old Page, fired Monday as Page Group’s president and chief executive and unceremoniously evicted from his office, and 42-year-old Elliot (Skip) Stein Jr., chairman of Page Group and a managing partner of Commonwealth.

They met and became friends in the mid-1980s when both were in Chicago, Stein as an investment adviser and Page as publisher, president and part-owner of the Chicago Sun-Times. Stein eventually moved to New York, and Page resigned from the Sun-Times in August, 1988, after losing a corporate power struggle, in large part, over his free-spending ways and high living off the company expense account.

Page sold his interest for a reported $2.5 million--a sum that angered Sun-Times insiders--and hooked up with Stein a year later to form Page Group. The new company, funded mainly by Commonwealth’s $16-million investment, embarked on plan to build a network of community newspapers in Southern California.

But soon, Stein began having doubts about Page’s ability to handle the business matters of the publishing company, especially as it grew to include two start-up magazines, several weeklies and a Spanish-language paper called Tu Mundo in Los Angeles.

Eventually, Commonwealth sunk $2 million more into the company, mainly to keep the money-losing Pilot afloat, and took out a $3-million bank loan for the company’s use, according to Page and other sources in the company.

By the time Page was ousted and sued Monday by his company, the complaints had grown and become more specific.

The lawsuit accuses him, among other things, of misrepresenting circulation figures to advertisers, hiring cronies who weren’t qualified for executive positions, acquiring new media properties without proper analysis, failing to pay vendors for various supplies and failing to follow budgets by spending more money than the company had.

“The issue they’re trying to claim is I’m not a good business manager, and that’s just not true,” Page said. “At the Sun-Times, it was strictly philosophical issues--a difference of style in managing the company--that caused me to leave. It had nothing to do with performance. It was just two guys who couldn’t get along.”

Stein wouldn’t discuss the contentions in the lawsuit, but one of his lawyers said that Page Group directors recently learned that Page had hidden certain information from them about his departure from the Sun-Times. He wouldn’t explain further.

“That’s ridiculous,” Page said. “There isn’t anything about me that these guys didn’t know. Skip and I were friends.”

But Stein, he said, kept him in the dark about the purchase last fall of Tu Mundo. He said he was told to stay out of the negotiations and “let New York handle it.”

Page said he was simply told what the deal was going to be. Tu Mundo’s owners--a partnership consisting of Stein, New York communications executive I. Martin Pompadur and Hollywood producers Guber and Peters--would get 5% of Page Group stock in exchange for what Page said was at worst a “break-even” operation.

Page said he learned later that Tu Mundo had only $21,000 in assets and was a money-losing venture.

More important, he said, the sellers received 10% of the stock in his company, which he figured amounted to a $1.7-million value based on the sale of stock last year to two new investors. When he asked for more information on the deal, he said he was ignored. When he demanded it, he was voted down. When he sued last week to get more information, he lost his job.

But a lawyer for Page Group said Page’s version is nothing but a smoke screen fabricated when he realized that “his tenure was on the line.”

Charles Shepherd, the company’s lawyer, said that other directors wanted Page to review the Tu Mundo transaction because they were concerned about Stein being on both sides of the deal. Shepherd said Page was given the documents and asked to determine whether the deal made economic sense.

“After all, he purports to be experienced in the field,” the lawyer said, adding that Page approved the deal. Page disagrees, saying he never reviewed the transaction.

Meantime, at the Daily Pilot, there are no plans to change the editorial product that Page fashioned, said James Gressinger, who was hired last week as executive vice president and general manager.

He acknowledged that the Pilot has been losing money, though it has increased circulation to about 16,000 from a low of 14,000 last September. Page had considered eliminating Saturday or Sunday publication, or both, and Gressinger said the idea is still being considered.

“I have no answer to cutting costs, but I have a great deal of interest in raising revenue,” said Gressinger, who described himself as an expert at turning around struggling newspapers. He said he has been at nine different papers in 10 years but plans to stay at the Pilot much longer.

He said he will reorganize the advertising staff and “give them the training and the tools they need to do the job.” He said the Pilot, like the profitable News-Press, will “create programs to add value to the paper as an advertising medium to attract the smaller, more local advertisers.”

“Our sales people don’t even have readership studies,” he said. “But when they are armed with the tools to really enlighten our local advertisers, we’ll be increasing our revenue. Our job is to drive traffic into their stores.”

On May 6, his first day on the job, a female advertising executive accused him of sex discrimination when, upon meeting her, he questioned whether a woman could handle the job. In the lawsuit against Page, the company alleges that her bias charge was trumped up by Page and his top aide, Mark Eissman, a Chicago lawyer and former journalist. Page and Eissman have denied the charge.

The Pilot has dropped the Audit Bureau of Circulation, an independent firm that verifies circulation figures. Instead, he said, it will use the Verified Audit of Circulation Corp., a small Marina del Rey firm that mostly audits circulation of free publications. The News-Press uses VAC. No audited figures for the Pilot, though, are newer than the September ABC numbers.

Stein acknowledged that the recession has hurt Page Group, particularly the Pilot. But he said the company will get through it and will grow.

Page, meantime, said he plans to stay in Southern California.

“I’m already talking to people about other jobs,” he said. One option is starting a rival paper in Newport Beach.

In his more than 30 years in the newspaper business, Page has gained a reputation as an energetic, charismatic executive, a big-picture man with a gift for promotion, a love for the news side of the profession and less interest in the financial side.

He has worked for United Press International, for the Hearst Corp. and for press baron Rupert Murdoch’s organization, where he was publisher of the Boston Herald for two years before moving to Murdoch’s 1984 acquisition--the Sun-Times.

In California, Page no longer had the private limousines and planes that he had in Chicago, but he nevertheless put himself into the social swirl, joining the Center Club, lunching at the Balboa Bay Club and generally enjoying the good life.

The difference, one insider said, is that this time he paid for much of the high-living out of his own pocket.