The Los Angeles Times not only damaged its credibility by sharing revenue with a local news subject, but many staffers view the episode as "the very visible and ugly tip of an ethical iceberg of ominous proportions," the paper acknowledged yesterday.
In fact, said the 14-page article by Times media critic David Shaw, some staffers are questioning the tenure of Editor Michael Parks, who is "widely regarded as having done too little, too late" to stop the deal with the Staples Center sports arena.
The article reported that the paper's top executives also had considered similar schemes. After Times Mirror CEO Mark Willes pledged $100,000 to a committee trying to lure next summer's Democratic National Convention to Los Angeles, the committee's president asked the Times to produce a 200-page special convention section with a "50/50 advertising split." In exchange, the Times would receive VIP tickets to convention functions and the right to have its name on signs and banners during the Democratic conclave.
In a subsequent letter, Maryanne McNellis, president of the Times's national edition, told the committee that "revenue-sharing would begin after all Los Angeles Times costs were covered." But the idea eventually died.
Shaw was asked to investigate the paper's revenue-splitting scheme with the Staples Center sports arena for an Oct. 10 issue of the Sunday magazine, a deal for which Parks and Publisher Kathryn Downing apologized Sunday.
The article was particularly tough on Parks, saying he had been "insufficiently vigilant" or "worn down" in battling incursions by the paper's business operation. Parks, who spent most of his career as a foreign correspondent before being named managing editor in 1996, a year and a half before assuming the top post, was described as failing to recall key details of the Staples episode and initially resisting Shaw's request to investigate the matter.
According to Shaw, many at the paper have asked "the Watergate question" about Parks: What did he know and when did he know it? "Clearly, I underestimated the impact of the Staples arrangement on our credibility. . . . I have responsibilities as a gatekeeper, and I failed in those," Parks was quoted as saying.
Downing said that "Michael was upset" when she told him, as the newsroom's top executive, about the revenue-sharing deal with Staples, but "not outraged and not angry."
In a striking demonstration of Shaw's independence, none of the key figures, including Willes and Parks, read his lengthy piece before publication.
Previous accounts have said that the Staples issue had gone to press by the time that Parks learned of the profit-sharing arrangement. But yesterday's story said that only a third of the covers had been printed and that there was still time to kill the magazine.
"I didn't realize it was wrong," Willes told Shaw. "Shame on me for that. It didn't register the way it should have."
But the paper's magazine and sports editors, among others, objected to the special issue. Even before the question of sharing revenue was raised, the Times had already become a "founding partner" of the arena, agreeing to pay Staples Center $1.6 million a year for five years for the right to post signs and sell papers inside the facility.
The Shaw account includes remarkably candid criticisms by senior editors of what they say is a troubling climate since Willes, a former cereal company executive, took over as CEO. Willes appointed himself publisher in late 1997 and announced that he would use a "bazooka" to blow up the traditional wall separating the advertising department from the newsroom.
Complaining of a "slippery slope," Managing Editor Leo Wolinsky was quoted as saying: "Money is always the first thing we talk about. The readers are always the last thing we talk about."
Steve Wasserman, editor of the paper's Book Review, told Shaw that "from time to time it has been suggested to me that we should pay more attention to books published by companies with big ad budgets. When I would ask for an example, I would be told, `Books in the windows at Barnes & Noble.' " The Times until recently had a deal in which it received a 6 percent commission when anyone bought a book after clicking on Barnes & Noble ads on the Times's Web site.
In another case, a car dealer's complaint about a reporter, made to the Times advertising department, was passed on to Parks. He expressed concern about reporter Kenneth Reich's work on a column involving one buyer's complaint against the dealer. Wolinksy tried to kill the column for editorial reasons, but it ran with some changes after Reich threatened to raise a fuss.
On the Staples issue, the Times agreed to give the basketball and hockey arena $300,000 of the magazine's revenue for the October issue. More troubling to newsroom staffers, a Times advertising executive was allowed to see advance page proofs of the magazine -- a clear no-no at most papers -- and strongly objected to calling the arena "the Staples Center," saying the owners did not consider "the" part of the title. Editor Parks declined to change it.
When former publisher Otis Chandler wrote a letter castigating the paper, City Editor Bill Boyarsky read it to the newsroom. Willes told other editors that he regarded it as an act of disloyalty and called in Boyarsky to register his unhappiness. Three senior editors tried to explain to Willes why Boyarsky felt compelled to read the letter from Chandler, a revered figure at the Times. But as Wasserman, the book review editor, put it: "We speak two different languages."
Downing, who succeeded Willes as publisher last summer, issued a statement saying Chandler was "angry and bitter. . . . It's too bad when some people get old, they get bitter." The reporter writing the story, concerned about disparagement on the age issue, showed the quotes to Parks, who deleted his publisher's line about Chandler being old.