Newsonomics: Can A New Management Team Soothe The Roiled Los Angeles Times Newsroom?

In the midst of a union organizing vote, new Los Angeles Times editor-in-chief Lewis D’Vorkin is moving forward with a sweeping reorganization of the Times newsroom. He will, I’ve learned from numerous sources, soon announce three new top hires — all from outside a newsroom in turmoil. Those three would follow the appointment of Steve Miller, whom the Times announced to its newsroom as its new assistant managing editor for digital on Wednesday. Miller brings experience in digital sports journalism, from The Sporting News, Fox, and ESPN.

D’Vorkin has apparently plucked journalists from the nation’s top two newspapers, The New York Times and The Washington Post. Louise Story, a leading investigative reporter with multimedia credentials, will become a managing editor. Sylvester Monroe, the Post’s assistant foreign editor, will become an assistant managing editor. For each, the executive step-ups are major ones. In addition, Bruce Upbin, who spent a 21-year career working with D’Vorkin at Forbes, leaving in May 2016 to take a position as VP/strategic communications for Elon Musk’s Hyperloop, would rejoin D’Vorkin, becoming an assistant managing editor as well.

“It’s not something I can talk about,” D’Vorkin told me Thursday afternoon, “until the union vote is resolved.” The results of the News Guild’s organizing vote of the Times newsroom are due Jan. 19.

News on the new hires is now moving across the Times newsroom, raising a host of new questions about who will be in charge of what and who will report to whom. Who’s in and who’s out? Some staffers learned of the would-be appointments as the names and titles of the new managers appeared sometime over the past week in the Times’ human resources system, visible to staff. Upbin and Monroe declined to comment on the moves, and my attempts to reach Story have been so far unsuccessful. Several sources in three companies confirm the hires.

The combined moves would amount to a major change in direction for the Times, a still-influential regional, and occasionally national, news player. As with any change of this sort, the next question will be how many of the Times’ other top managers, and their middle-manager reports, will stay in place as the new management team emerges. At this writing, it’s not clear what follow-on reorganization — among current assistant managing editors or deputy managing editors (of whom there are now eight in total), for instance — will result. In addition, it’s unclear what role interim executive editor Jim Kirk may play when the dust settles. The impact won’t only be felt in the top ranks. The Times remains susceptible to seeing its best journalists poached. At least eight have gone to either The New York Times or The Washington Post within the past couple of years. Just today, prize-winning energy reporter Ivan Penn announced to colleagues, via Twitter, that he was joining The New York Times.

 

Ivan Penn@ivanlpenn

Dear friends, it is with great excitement to announce that I have accepted an offer to join the New York Times as the alternative energy reporter. I will miss the newsroom of the Los Angeles Times but I will remain based in Southern California. #thankful

Would-be managing editor Louise Story draws high praise. “She’s a star, and the Times will be sorry to lose her,” one top New York Times news executive tells me. “She has been an accomplished investigative reporter, had wider digital ambitions, and ran our Facebook Live effort for about a year. And she’s got a great rep.” Story also gained prominence as one of the authors of  the Times’ influential Innovation Report. The 11-year Times veteran work has centered on project leadership and investigative reporting.

The looming question is a big one: Story has relatively little management experience, leading at most a team of about a dozen with Facebook Live, although her colleagues credit her with managing the assignments and workflow of as many as 300 journalists, as the pace of social posting demanded new organizational forms. Her current title is executive producer and staff reporter. It’s a fairly unprecedented jump to become a managing editor of the third-largest newspaper newsroom in the country, especially one in deep turmoil.

Sums up another New York Times news executive: “She was offered a big leap by Tronc. It’s a huge bet.”

Sylvester Monroe comes into his job as assistant managing editor from a position as assistant foreign editor at the Post, a job usually defined more by editing than by management duties. That, too, is a substantial step up.

Bruce Upbin’s appointment may bring less surprise, given his long-time association with D’Vorkin. Forbes’ digital strategy formed D’Vorkin’s reputation as a digital journalism pioneer. In one of his last columns for Forbes, in October, D’Vorkin laid out what he’d learned from the development of his 2,000-strong Forbes contributor network and ideas on the “advertising opportunities in tying the right digital-print segmentation formula to off-domain consumers.”

Since D’Vorkin’s appointment by CEO and publisher Ross Levinsohn, the question of how the two would implement news editorial/ad strategies has hung in the air. Among the likeliest is an effort to build a major entertainment vertical. That would use the base of the Times’ entertainment and culture reporting and build from there, perhaps using a Forbes-like contributor model and other content partnerships. The Times has recently added new entertainment reporters to its newsroom, I’ve learned.

As I’ve written, that top-of-the-roost entertainment goal is a tough one in an age of increasing Google/Facebook advertising dominance. And there’s newer competition like Jay Penske’s Penske Media Corp., which recently bought Rolling Stone, adding it to Variety, Deadline Hollywood, Women’s Wear Daily, and IndieWire. Not to mention all the free entertainment content, high and low, swimming across the web.

Any and all new initiatives will be subject to budget constraints, and that’s a tough challenge for both Levinsohn and D’Vorkin, given the overall turndown in ad revenues and, consequently, increasing pressures to cut staff to maintain profits. At the same time that the Times looks to develop new products, it must figure out how to build reader revenue — and for many subscribers, that requires deep and wide Los Angeles-based coverage. Over the last year, it has impressively built its digital-onlysubscriber numbers to more than 100,000; now the job is retaining those and continuing to grow.

Collectively, the moves indicate that the Times’ new regime is reshaping the paper to fit their emerging, if unannounced, strategies. As the top team and those strategies are decided, D’Vorkin and Levinsohn must deal with a newsroom buffeted by much change. The strategic questions are important, but so is figuring out how to soothe the frayed nerves of a roiled newsroom. Last summer, Tronc purged the Times’ top management. Tronc fired Times editor/publisher Davan Maharaj, his managing editor, and several others associated with his tenure. Those departures ushered in a period of turmoil; as the uncertainty increased, a nascent News Guild effort to organize the never-before-unionized Times newsroom of more than 400 gained steam. As management mobilized to oppose it, the newsroom voted in early January. Results, which most observers believe will be pro-union, will be announced Jan. 19.

Tronc’s own SEC reporting of a new planned $15 million payout to Merrick Media, the investment company run by Tronc chairman Michael Ferro, certainly didn’t help support management’s case.

In a Dec. 20 filing, Tronc agreed to pay Merrick Media — which owns a plurality of Tronc’s shares — $5 million a year for three years. In exchange, Tronc receives “management expertise and technical services…The Advisor shall provide services that include but are not limited to investment relations, strategic planning, capital planning, growth initiatives, management development, customer and vendor relationships, other operational matters and various business relationship introductions…The services provided hereunder are provided on a non-exclusive basis and shall be undertaken by the Advisor at the direction of the Chief Executive Officer of the Company.”

In short, the company behind Tronc executive chairman is being paid to give much of the guidance that executive staffs normally provide.

Further, Merrick Media, which previously bought into the Chicago Sun-Times and then exited, offers no particular track record of successfully offering such guidance. In this contract, Merrick Media is to be directed by Tronc’s CEO. Tronc CEO Justin Dearborn is a long-time Ferro associate and the person he named as CEO soon after gaining control of the company two years ago. It looks circular and hard to justify to the common bystander. And remember: $5 million a year would fund at least 50 journalists jobs.

In the same filing, Tronc terminated another publicly criticized agreementwith Merrick Media. It cancelled its leasing of private aircraft time from the company — a service for which it has paid as much as $2.7 million a year. Multiple critics, including former shareholders, have accused chairman Ferro of “self-dealing” with regard to both the airplane lease and a number of asset sales in which he was involved over his two-year tenure running Tronc. The new management deal offers similar optics, and although many of the dissident shareholders are gone — bought out by Ferro’s Merrick or by now-dissident-as-well major shareholder Patrick Soon-Shiong — Tronc’s own employees remain mindful of such moves.

Against all the Tronc drama, which has come become a norm for a company formerly known as Tribune Publishing, loom the harsh realities of the daily newspaper business. Next month, the company will issue its full-year and fourth quarter financials, and they won’t be pretty. In the third quarter, ad revenue dropped 14 percent. Overall revenues were down more than 7 percent. Given those numbers — ones on par with Tronc’s peers — only deeper expense cutting can enable the company to maintain fairly stable earnings.

However the ongoing newsroom re-organization and re-strategization proceeds, the Times — like all of Tronc’s dailies — faces major budget pressures. Rumors of a significant cut in jobs grow, as the Tronc board reviews the troubling financials. Further, the Times — which has been exempt from Tronc’s policy or centralizing its newspapers’ design and editing work in Chicago — may see some of its work moved out of Los Angeles. And then there’s the earth beneath the newsroom’s feet. The Times’ own building was sold to a Canadian developer last September, and the longevity of the newspaper’s staff staying in place, by lease, is in question.

In Southern California, earthquakes can cause havoc. But in this case, it’s the man-made gyrations of a newspaper industry in flux — exacerbated by an owner with so many moves of its own — that have shaken the once-steady Times to its roots.