Their eyes are on wrong bottom line

ANYONE who cares about newspapers and who believes they have a constructive role to play in the lives of their communities and in the service of our American democracy cannot help but be struck by the contrasting events that unfolded 3,000 miles apart late this week.

In Manhattan, the chairman and vice chairman of the New York Times Co. told the Securities and Exchange Commission that they plan to cut their own pay over the next two years and will use the savings to “reward exceptional performance” by employees not usually eligible for bonuses. New York Times Publisher Arthur O. Sulzberger Jr. and International Herald Tribune Publisher Michael Golden -- both members of the family that controls the company -- said they will forgo a combined $4 million of their own money over the next 24 months to create the incentive pool.

In Los Angeles, Jeffrey M. Johnson, this newspaper’s publisher, and Dean Baquet, its editor, told one of their own reporters that they have rejected demands by the Tribune Co. to further cut The Times’ staff.

Since taking control of the paper six years ago, the Chicago-based Tribune has laid off or bought out about 20% of the paper’s then-1,200 person staff.

As Times staff writer James Rainey reported this week, “the editorial staff currently numbers about 940. Since 1999, The Times’ photo department has shrunk by about one-third. The graphics and design department has lost more than 40% of its employees. Large daily operations in Ventura County and the San Fernando Valley, scaled back before Tribune’s purchase, have been reduced to just a handful of reporters.”

Obviously, the events in New York and Los Angeles are separated by more than distance. They reflect two diametrically opposed ways of dealing with the nervous breakdown that currently afflicts American newspaper journalism’s managerial class. The reasons for that breakdown are several and involve social and technological changes too familiar to belabor here. Essentially, the difference in the response comes down to coping mechanisms:

The New York Times Co., like the Washington Post and Wall Street Journal, has reduced the number of its journalists, but only recently and, then, grudgingly.

That’s because they are determined to change and grow into the era now unfolding with the quality of their journalism intact. In fact, they believe that the quality of their journalism -- however it is delivered to future readers -- is the reason for their existence.

There’s a simple truth at work here: A newspaper that is indifferent to its bottom line goes out of business; a newspaper that thinks only of its bottom line has a business that isn’t worth saving.

Like so many other corporate media conglomerates, Tribune is locked into a different coping mechanism because the iron logic of its situation seems to require that it assign the highest value to the opinion of the money and fund managers who own its stock. Their opinion, of course, is that they want as much money as they can get for their clients right now. In the face of that imperative and in an era of turbulent change and vast uncertainty, there doesn’t seem to be anything to do but cut to keep profits up and hope that the money for reinvestment in journalism somehow will turn up.

Make no mistake, the Los Angeles Times -- like most other American newspapers -- is more than profitable. The newspaper you’re currently holding generates a 20% profit margin, a figure that would give most Fortune 500 chief financial officers a spontaneous orgasm.

Here’s another simple truth: Newspapers are a great business for somebody who wants to make a lot of money for a very long time; they’re a lousy business for somebody who wants all the money they can imagine this quarter.

So, as the New York Times reported Friday: The standoff between this paper’s publisher and editor and their corporate employers in Chicago “is a dramatic example of a long-simmering conflict between many newsrooms and boardrooms around the country as newspapers face an industry-wide economic slump and continued demands by Wall Street for improved financial results.”

How far does Tribune want to cut The Times’ staff?

Nobody is talking for the record, but it’s a fairly open secret that people in Chicago believe this paper’s staff ought to be somewhere around 800. Johnson and Baquet believe that’s far too few people to continue providing the people of Los Angeles with a newspaper of acceptable journalistic quality.

When it comes to cutting, Baquet told Rainey this week, “you can go too far, and I don’t plan to do that.”

Johnson put the matter squarely: “Newspapers can’t cut their way into the future.”

Both of them are right. The Los Angeles Times’ future as a newspaper worthy of a great American city stands in the balance.

This week, Scott C. Smith, president of Tribune’s publishing division, told The Times’ Rainey, “There is a misperception that counting numbers of people is the right way to measure the quality of a great newspaper.” Certainly, it’s not the only measure, but it’s not an irrelevant one.

Here’s another simple truth: A sufficient number of reporters, editors, photographers and designers is necessary, though not a guarantee of a newspaper’s quality.

Something more is required, and that is an unshakeable belief that journalism that places any value -- including profit -- ahead of the common good, ahead of the public’s interest in being fully and accurately informed, is little more than a license to snoop and lecture for a profit.

This week, a group of 20 prominent Los Angeles residents, including former U.S. Secretary of State Warren Christopher and leaders of business, academia, organized labor and the bar, sent a letter to Tribune advising it either to invest more in the Los Angeles Times’ journalism or to negotiate its sale to one of the several local buyers eager to take control.

As they consider their response, the company’s executives might recall what Scott Smith said about Johnson when he announced his appointment as publisher a little more than a year ago: “Jeff Johnson has a keen understanding of The Times’ position and future potential in the competitive Los Angeles market. His personal leadership qualities and wide range of experience -- both in Los Angeles and prior assignments with Tribune Company -- make him the best choice” to lead the paper.

Has something happened in the interim to render his judgment unsound?

American newspapers are passing through an era not only of technological change but also one in which a corporate ownership model seems increasingly unworkable. If the Tribune Co. does not feel able or willing to resist its investors’ unreasonable demands on behalf of the public’s interest, then it should put The Times into the hands of somebody who will.

timothy.rutten@latimes.com