Friday, August 19, 2005

L.A. Times Advertising Losses Ominous

Written from Yellowknife, Capital of Canadian Northwest Territories--

The latest visit of Tribune executives to Los Angeles, Dennis FitzSimons and Scott Smith, saw them this time coming downtown rather than confining their visit to the Burbank Airport.

But the news that accompanied the latest visit was bad: L.A. Times overall advertising down 11% in July from last year, (while Tribune advertising was rising 6.7%). This could mean further costcutting at the Times, despite the fact that past cost cutting has put the paper in a downward spiral.

One problem is that there's no love of Chicago in L.A., and many subscribers are leaving, advertisers are quitting. They think this is the Californian thing to do. In California, the vast preponderant majority would like to see Chicago give up and sell the paper back to California interests.

Not until Chicago gives up and adopts this course is the situation apt to be reversed.

But it would help if the new publisher Jeff Johnson hires some reliable Californians to push advertising sales.

At least, according to reports that have surfaced, no big new cutbacks were ordered by the visiting executives. But this may only be a matter of time.

It's possible the paper cannot be sold until the present lawsuit relating to the Matthew Bender sale is cleared up. In short, we are still living with the Kathryn Downing possible legal and tax mistakes. No new buyer wants to come forward while there are such legal uncertainties. This could cost the Tribune $1 billion in new taxes, and I doubt very much if Mark Willes will be willing to give up his severance to help pay for his protege's errors, if the courts formally hold them to be errors.

Two big outside pieces are reportedly being written on the troubles of the Times, one by Ken Auletta, who has written on this subject before.

It's liable, unfortunately, to get worse before it gets better.


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