The Chandler Dynasty Steps Aside

“No single family dominates any single region of the country as the Chandlers have dominated California,” David Halberstam wrote in “The Powers That Be,” his 1979 book on the media, and indeed, for more than a century, it was the Chandler family--more than any other force or institution--who shaped the development of Los Angeles and its sprawling environs.

Water for a desert city. A port for a landlocked city. A Music Center for a city with little in the way of formal culture. The aerospace industry. The movie industry. An important center for scientific study and research. Major league baseball. A future president of the United States. The Chandler family, operating largely through the Los Angeles Times, played a major role--generally the major role--in turning all those dreams into realities.

Now the Chandler family has surrendered both ownership of the paper and leadership in the community to a media company headquartered 1,750 miles away--and they have done so in negotiations conducted in such secrecy that Otis Chandler, the man most responsible for the transformation of The Times itself from journalistic mediocrity to excellence, said he didn’t know about the deal until it was completed.

Chandler, publisher of The Times from 1960 to 1980, said Monday that his first inkling that something big was about to happen to the newspaper that his family had controlled since 1884 came last Friday, when he began receiving phone calls asking what he knew about a wide range of corporate rumors suddenly sweeping Times Mirror Square, at least one of them involving a takeover of The Times’ parent company, Times Mirror, by Tribune Co. of Chicago. But he said the rumors remained rumors to him until late Sunday night, when the Times Mirror board of directors approved the deal with Tribune Co.

Chandler said he made no effort to find out if the rumors were true “because I knew that would put anyone I called in a difficult position. I didn’t call any board member, any officer of the company, any of the trustees.”

Chandler’s sister, Camilla Chandler Frost, one of seven trustees of the two Chandler Trusts that control about 65% of Times Mirror stock, confirmed that she did not speak to her brother about the deal until Monday morning. She said she and all other members of the Chandler Trusts and the Times Mirror board were sworn to secrecy during the negotiations.

“I couldn’t even tell my children,” she said. “We were told that if anyone found out, it would be a deal-breaker.”

Frost said she found keeping that secret “very hard. Otis and I are pretty close and we’re used to communicating,” she said, “but he wasn’t upset because he understands that this is the way big deals like this work . . . and because he is so positive about the deal itself.”

That he is.

“I wasn’t surprised by the announcement,” Chandler said, “because I was not happy with current management of The Times and Times Mirror, and my assumption was the [board of] directors and the family weren’t happy either, and under those circumstances, to move forward in this mega-merger world, one has to consider merging.”

‘It’s a Very Positive Move’

Chandler has long felt that it would be difficult for Times Mirror to survive as an independent company in a world of growing consolidation, and he said Monday, “Of all the people, of all the media companies that Times Mirror could join, this is the most logical and probably the best company. It’s a very positive move for The Times and for Tribune. It’s a win-win situation. We’re not a major presence in the Internet world, and they are. We don’t have TV stations any more, and they do. There couldn’t be a better fit.”

Frost agreed on all counts.

“The Tribune is such a forward-looking multimedia company,” she said. “This deal puts us in every major market, and it’s good for all the shareholders.”

It’s especially good for the Chandler family, whose cumulative shares in the deal are now worth $1.43 billion, based on Tribune Co.’s closing stock price Monday. (Terms of the deal provide that Times Mirror shareholders can choose between taking $95 per share from Tribune Co. or exchanging each of their Times Mirror shares for 2.5 shares of Tribune Co. stock. Family shareholders are expected to take the exchange.)

Tribune’s diversity was a major factor in the family’s decision to sell Times Mirror, Frost said, and others close to the negotiations agreed. The Chandler Trusts expire in about 23 years--the exact date depending on the life spans of those named in the trusts--at which point all assets in the trusts would be distributed to the beneficiaries. The combined assets of Tribune Co. and Times Mirror were deemed a more valuable holding in the future than Times Mirror alone, especially in light of Tribune Co.’s aggressive move into electronic and digital media.

It would be “a fair statement,” Frost said, that “many on the board were becoming disillusioned” with the leadership of Mark Willes, who was named chairman and CEO in 1995 and served as publisher from the fall of 1997 to mid-1999. That disillusionment, she said, preceded the 28.4% fall in the company’s stock price this year and the controversy engendered by the paper’s profit-sharing partnership with Staples Center in a special issue of the paper’s Sunday magazine last fall.

“We were not doing what we should be doing--looking toward the future,” she said. “Everything we had that wasn’t absolutely core we sold off.”

In an effort to refocus Times Mirror on its core newspaper business, Willes had indeed sold off a number of non-newspaper businesses, but Otis Chandler, among others, worried that this shift away from the diversification favored by him and his father, who preceded him as publisher, would make Times Mirror vulnerable to cyclical economic downturns. (Willes declined to be interviewed for this story, and other members of the board either followed suit or did not return phone calls.)

Chandler initially supported Willes as chairman and CEO and did not speak out publicly against him until the aftermath of the Staples Center affair, when he accused Willes and Kathryn Downing, who had succeeded Willes as publisher of The Times, of “unbelievably stupid and unprofessional handling” of the situation.

No other member of the board--or of the Chandler family--publicly criticized Willes or Downing, and to many, this seemed yet another indication of the long-standing breach between Chandler and his relatives, a break dating back 40 years, to when he was named publisher of The Times.

In the pre-Otis Chandler years, The Times was a partisan, parochial newspaper, often extremely boosterish on behalf of Los Angeles, and the members of the Chandler family who ran it were instrumental in turning a city of 200,000 in 1904 into a booming metropolis almost 50 times that size.

The family dynasty began in 1882, less than six months after the paper was founded, when Gen. Harrison Gray Otis bought an interest in the paper for $6,000. Two years later, he owned it all. His future son-in-law and successor, Harry Chandler, was an ingenious businessman who gained control of The Times’ circulation routes early in his career and soon thereafter became the general’s business partner.

Influence Over Port, Water Decisions

Shortly before the turn of the century, The Times pushed hard--and successfully--for a port in San Pedro, rather than Santa Monica, the favored harbor site of Southern Pacific Railroad, then a preeminently powerful California institution.

Several years later, Otis, Chandler and several other wealthy, prominent Angelenos spearheaded the controversial move to bring Owens Valley water 250 miles south to serve Los Angeles--and, having bought up undeveloped San Fernando Valley land at bargain prices--to make themselves even richer in the process.

Later, Harry Chandler, who served as publisher of The Times from 1917 to 1944, provided the financial contribution--and introductions to other successful businessmen--that helped lure Donald Douglas and his aircraft company to Los Angeles. He was similarly influential in the beginnings of the Hollywood motion picture industry and in bringing Robert Millikan, a world-famous physicist, to Southern California, a move that led to Throop Polytechnic, a local engineering and manual arts school, becoming the California Institute of Technology.

Harry Chandler’s son, Norman, publisher from 1944 to 1960, played a similar role in helping to bring the Brooklyn Dodgers to Los Angeles in 1958, and Norman’s indefatigable wife, Dorothy Buffum--known as “Buff”--was the force behind the $20-million fund-raising drive that led to the construction of the Music Center in 1964.

Through all this, The Times was a rabidly Republican, stridently anti-union newspaper, using its news columns and its behind-the-scenes clout to promote the candidates and causes the family favored--most notably the career of a young congressman from Whittier named Richard M. Nixon, whose early political rise was largely credited to Times backing.

But all that changed when Otis Chandler became publisher in 1960 at the age of 32--championed for the position by his mother, over the objection of those in the family who preferred his uncle Philip. A consulting firm, McKinsey & Co., which conducted periodic studies of The Times, recommended that the positions of publisher and chairman be divided, and Norman--then nearing his 60th birthday--was the logical, if not the only choice for chairman. But he “regarded Philip as something of a lightweight, not entirely competent to take an aggressive leadership role at The Times,” as Marshall Berges wrote in his 1984 book “The Life and Times of Los Angeles.”

To ensure stability, McKinsey & Co. had also recommended that the new publisher hold the job for at least 15 years; since mandatory retirement age for the publisher was then 65, that eliminated Philip, who was 52 at the time.

Armed with that information--if not indeed responsible for it--Dorothy Chandler went to key members of the board, and soon her son was the publisher.

Family Tensions

Many in the Chandler family already resented Buff Chandler, the daughter of a department store owner in Long Beach. They “never thought she was good enough to marry Norman,” her son recalled years later--and this greatly exacerbated family tensions. The split grew further when The Times--in Otis Chandler’s first year as publisher--ran a series of stories exposing the ultraconservative John Birch Society, whose members included Alberta Chandler, Philip’s wife.

The Times was already very successful financially when Otis Chandler took over. He made it even more profitable, which helped mollify his family critics. But he also transformed it journalistically, insisting that partisanship give way to fairness and that his editors hire the best journalists they could find. Within four years after he became publisher, The Times--which had long been derided as one of the worst newspapers in the country--was being spoken of as one of the three best.

When Chandler left the publisher’s office in 1980 and again when he gave up the titles of chairman and editor-in-chief in 1986, there was widespread speculation that he had been pushed out by long-disgruntled family members. Chandler denied the stories and said he just wanted to “give myself full time to the things I’ve always enjoyed doing in bits and pieces”--hunting, surfing and racing and collecting cars and motorcycles among them. He subsequently was quoted in a Vanity Fair profile as criticizing many in his family for not sharing his commitment to journalistic excellence, and then he wasn’t much heard from again until the Staples controversy.

Chandler remained out of the loop when The Times and Times Mirror were acquired this week by Tribune Co. and said he was “deeply saddened” to see ownership of the family business change hands, but it would be ironic if his enthusiastic support for the deal became the first step toward repairing that longtime family rift, even as the primary cause of the division--management of The Times itself--slips out of Chandler family control.