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ANNALS OF COMMUNICATIONS
The New Yorker - November 17, 1997

DEMOLITION MAN

Mark Willes tore down the traditional wall between editorial and advertising. Will that save the L.A. Times?

BY KEN AULETTA

 Ehen Debora Vrana, a business reporter for the Los Angeles Times, arrived at her office on October 15th, she found a press release from an advertiser along with a note from an advertising-sales executive asking, “Could this run on page two or three?” The note arrived just days after the Times’ new publisher, Mark H. Willes, announced a major reorganization—one meant to tear down the traditional wall separating the business and editorial sides of the newspaper—and the resignation of the editor, Shelby Coffey III. Vrana raced to the office of  William Sing, the business editor, who hurried to talk to Leo Wolinsky, the managing editor, who got in touch with Michael Parks, Coffey’s replacement.

As it turned out, Parks recalled last week, “it appears to have been a naïve mistake by someone who heard, ‘There are no walls.’ ” Janis Heaphy, the senior vice-president for sales and marketing, concurs, saying, “It was human error.” The newsroom, though, feared that barbarians were already at the door. After all, Willes, a former executive with General Mills, had revealed his plan to elevate managers from the business side to work alongside Parks and the editors of the newspaper’s many sections. By doing so, Willes said, he hoped to reduce bureaucracy and ventilate the often inbred culture of journalism, and, by aligning the paper with civic causes—one definition of “civic journalism”—make it more a part of Southern California’s sprawling communities while “simultaneously continuing to protect our editorial integrity and journalistic quality.”

Outside the paper, Willes, who is also the chairman and C.E.O. of the paper’s parent company, Times Mirror, was pummelled. The headline in Time magazine’s account of the changes referred to Willes as “cap’n crunch.” The New York Times headline announced “a growing clash of visions at the los angeles times.” Benjamin Bradlee, the former executive editor of the Washington Post, says of Willes, “He alarms me, because in his vision of civic journalism what’s good for the community and what’s good for the advertiser are an inch apart. He has no commitment to the pursuit of the truth. I say this when I never met the man, but he worries me. He doesn’t feel like he’s trespassing if he gets into a newsroom.”

The man at the center of this seemed slightly bruised when we met last week in his office. Willes, who is fifty-six, has a full head of perfectly combed gray hair, and he wore rimless, oversized eyeglasses that reflected the light from a floor-to-ceiling window that yields a vista of downtown L.A. and the San Gabriel Mountains. “One of the things that have struck me as a little odd about the coverage that we’ve had is that people are rushing to judgment,” he said. “All of the things we’re changing are on the business side, yet everybody thinks that somehow it’s the editorial side that we are going to mess up. There must be a way to have truly great journalism and a great business enterprise.”

What Willes is trying to do has huge implications both for the nation’s second-largest metropolitan newspaper and for journalism itself. Willes and his allies think that their critics are armchair generals, but it may be Willes who turns out to be the naïf. Willes, after all, is doing more than rearranging his newsroom; he is assuming that his restructuring won’t erode the editorial independence of his newspaper. At the same time, he is betting his three-billion-dollar company that newspapers can grow when circulation in the United States has fallen by ten per cent in the last dozen years.

When Mark Willes was appointed chairman and C.E.O. of  Times Mirror, in May of 1995, few noticed that he had a Ph.D. in economics from Columbia University, or that for two years he had been a professor at the Wharton School and for eleven years a member of the Federal Reserve Bank of Minneapolis, including three years as the bank’s president. What stood out was that for fifteen years at General Mills Willes had served as the company’s chief number cruncher, and that he was born in Utah and had been reared a Mormon. (His uncle, Gordon B. Hinckley, is the president of the Mormon Church.) Willes immediately announced that at Times Mirror he expected to double operating profit margins and “grow our earnings per share by fifty per cent in 1996,” and that each of the company’s businesses—seven newspapers, magazines and specialty publications, book publishing, cable-television programming, professional-information services, and consumer multimedia—“must earn at least a twelve per cent return on capital.” He was quickly typed as a dollars-and-cents character right out of Sinclair Lewis. “Below his eyes were semicircular hollows, as though silver dollars had been pressed against them and had left an imprint,” Lewis wrote in “Babbitt.”

Within months of his arrival, Willes had fired more than two thousand employees and closed the New York City edition of Newsday and the evening edition of the Baltimore Sun, both money-losers; in his first full year, he cut costs by two hundred and thirty-two million dollars. He killed the national edition of the Los Angeles Times, and sold Harry N. Abrams, a publisher of quality art books, because its profit margins were too slim. The New York Post dubbed him “the cereal killer,” an epithet that pleased Wall Street and helped boost Times Mirror stock from twenty-three dollars a share when Willes arrived to about fifty-five dollars a share last week. “This is how you sell Cheerios,” the former General Mills executive kept telling his newspaper executives, to the growing alarm of newsrooms everywhere.

But Willes did achieve his financial goals—brilliantly so—and within the company he began to shift his message. He curbed a tendency to make analogies between newspapers and consumer-product companies. “People reacted strongly and focussed on that rather than on the point I was trying to make,” he says. “I tried to find other analogies—power tools! Anything that would work.” He began to talk more about rebuilding “trust” within the company, about the Pulitzer Prizes his papers had won, about the obligations a newspaper has. He restored the national edition. He captured the attention of  journalists by insisting that he would transform newspapers into a growth industry, one that would hire more reporters. Newspapers were vital, he declared in speeches; they offered “one-stop shopping,” perspective, and portability.

Willes did more than preach; in mid-1996, he supported a drop in the price of the Times from fifty to twenty-five cents, after which daily circulation began to inch up. He went further, audaciously announcing an “aspiration” to boost the million and fifty thousand copies that the Times sells daily by five hundred thousand, seeking “dramatic” rather than “incremental” change—thus the reorganization. He insisted that this was a realistic goal, although during the last six years of Coffey’s nine-year tenure, the Times had lost daily sales of two hundred thousand newspapers. “If we can grow by fifteen thousand, that would be a great year’s work,” an executive who knows the company intimately says.

Tonnie Katz, the editor of the Orange County Register, which enjoys twice the circulation of the Times in the vast region south of Los Angeles, says that the Times is perceived as “a paper from outside the county,” and, pointing to _gures published last week, she notes that “the gap between the Times and the Register continues to widen.” Indeed, in seven of eleven counties where other newspapers compete against the Times, the L.A. paper is No. 2. Willes, though, remains messianically optimistic: If only the paper could increase its low, twenty-eight-per-cent penetration in the Los Angeles market, and particularly its small Latino reader base, of nineteen per cent. Or if it could change the minds of the eight out of ten new daily subscribers who choose not to renew each year. But something else was driving him, Willes told me, a cause that sounded larger than all his arguments about penetration, market share, and renewals: an increasingly segmented marketplace for information means that “we have a responsibility to be the thing that people have in common”—a common database, the glue that provides “a sense of community.”

Even as Willes, the chief executive, was making people in the newsroom nervous, he was exciting them by saying that he wanted more and better coverage of downtown Los Angeles. (When Willes tried to create an advertiser-driven section aimed at Latinos, many in the newsroom complained that it would “ghettoize” them.) Often, he could be found chatting with reporters and editors. It galled him, as it did Coffey and other top editors, that the launch of a second weekend Calendar section was stalled for more than a year by internal bureaucratic snags. Willes pushed Richard T. Schlosberg III, the publisher, and the editors “to see if we could learn anything from the workout sessions General Electric”—the parent company of NBC—“has gone through,” Janis Heaphy recalls. Schlosberg decided to invite the business seer Peter Drucker to spend a day with him, Willes, Coffey, and half a dozen or so senior editors and business executives.

They met on May 16, 1996, at a Marriott Hotel in Ontario, California, about thirty miles from downtown L.A. Drucker, who was paid a handsome consultant’s fee, talked about the history of Western civilization and about American culture and how it was changing; about the evolving role of newspapers; and about the power of marketing. At one point, Michael Parks recalls, Drucker, who is eighty-seven, talked about his grandson, saying that he subscribed to a niche magazine about how to play the trumpet. What the Times should do, Drucker said, is think of its various sections—such as sports or Calendar—as niche-magazine products within an over-all brand; the niche targets particular readers, while the paper maintains its broad appeal. Willes perked up at that: “I thought, That’s a world I understand.” Why not put together teams, not just with one person from the business side but with people from ad sales and circulation and marketing working alongside an editor? “It was a peak day for all of us in how Drucker helped us think differently about our business,” Schlosberg recalls.

“Let’s get a Drucker process going” became a refrain, and it led to new niches like Monday’s Health section. Because Willes had streamlined the company, he was around the flagship paper more. Schlosberg, a former Air Force pilot who served two tours of duty in Vietnam and had been in contention for the C.E.O. job when Willes was picked, was beginning to feel crowded, several of his colleagues say. “Dick was used to his own command,” a senior executive observes. Besides, he adds, with the California economy robust again, and with circulation and advertising inching up, Schlosberg felt that he had served his “tour.” In September of 1997, the fifty-three-year-old Schlosberg startled the Times by announcing his retirement. Schlosberg insists that he admires Willes and enjoyed working with him, but, he says, with his kids grown, “I wanted to have time to have a life.”

Willes, as he has done more than once in public, choked back tears when making the announcement. He stunned Schlosberg by taking the publisher’s title himself rather than awarding it to someone else. Perhaps no one was more surprised than Shelby Coffey, a neighbor, friend, and fellow marathon runner of Schlosberg’s, who told a friend that he had lost “a buffer.”

Having worked for three publishers in nine years, Coffey, who is fifty-one, began to question whether he should continue. Coffey does not allow a single negative word about Willes to escape his lips, and presents himself as the good team player. But friends of Coffey say that he was made uneasy by Willes’s fervor; by a Christmas party at which Willes invited a choir to sing carols and said that though he knew it was not P.C. to invoke Christ, he would anyway; and by his willingness not only to embrace a cause like educational reform but to pour the paper’s resources into it. Coffey was uneasy, a close California friend says, with the fact that “part of Mark’s agenda is that he has an agenda. Mark wants to change the world.” Indeed, Willes, while not an ideologue, seems to be passionate when it comes to “experimentation.” Most newspapers say that they seek the truth and try to help readers “understand the world around them,” Willes told me. “We reaffirm those two. But we’re also going one step further and saying that the reason for doing those things is to help improve the performance of society. It’s not enough to just stand on the side and observe. It’s not enough to have your ace reporter say, ‘My goodness, look how effectively they’re rearranging the chairs on the Titanic,’ and write a stimulating series on deck chairs. We think that we’ve got a responsibility, within appropriate bounds, to help the place work better.” To traditionalists, this sounds suspiciously like the reporter as participant rather than as observer.

The proposed reorganization of the newspaper was a concept that Willes and others had been pushing since the session with Peter Drucker. Coffey and Parks helped draw up the plan, yetit became clear, as David Laventhol, Times Mirror’s editor-at-large, told me, that Coffey “felt it was not going to work out” with Willes. Laventhol has been a mentor of Coffey’s and once served as the president of the parent company.

 On October 3rd, Coffey recalls, he lingered after a meeting and told Willes, “I want to give you a gift you might not appreciate immediately but will in time. Every new publisher deserves a chance to choose a new editor.”

“O.K., I choose you,” Willes replied. They talked back and forth, Coffey saying that he felt it was time to move on and Willes demurring. “I tried very hard to get him to stay,” Willes says.

The reorganization announcement came the same day—October 9th—that Coffey’s resignation was announced, and in retrospect, Willes says, “the timing turned out to be unfortunate. It raised a question in people’s minds: Did he disagree?” A five-page press release heralded “a top-level reorganization” designed “to help the Times grow and connect more effectively with readers.” Henceforth each editor would have a business partner—a brand manager—working alongside, responsible for galvanizing the entire business side of the team. In response to the frequently asked question of whether or not he was traducing the traditional wall between church and state, Willes says, “I’ve tried to make a distinction between walls and standards. Walls get in the way of ideas, flexibility, experimentation. If we were ever to lower our journalistic standards, then all these people who criticize us ought to have us shot.”

It rankles Willes that his integrity is being questioned. Even if people won’t take his word when he talks about his “public trust” obligations, they should believe him, he says, because as a practical businessman he knows that “if we did anything to break that trust” the Times would lose its credibility, and thus would lose both readers and advertisers. Willes is backed by the new editor, Michael Parks, a Pulitzer Prize winner who served the Times for fifteen years abroad. “There are now fewer questions on this floor than there are in the East Coast media,” Parks says.

As economists like Willes often say, it’s important to disaggregate: an editor would be foolish to design a new section without consulting business counterparts to learn if advertisers will support it, or what timing would be most attractive to advertisers, who provide ninety per cent of the Times’ billion dollars in revenues. Magazines like Business Week and The New Yorker have editorial retreats to which they invite select advertisers. The New York Times publishes an automobile section that barely disguises its commercial intent. At the annual meeting of the Magazine Publishers Association, in Scottsdale, Arizona, two weeks ago, publishers were beseeched to form “partnerships” with their advertisers, whatever that means.

Yet there is much ambiguity about how Mark Willes’s new structure will work: about how conflicts between the section editors and the section general managers will actually be resolved; about how the team-work culture of business can mesh with the adversarial culture of a newsroom. The Times has sold this as a radical restructuring, yet to allay fears it insists that the changes affect only the business side. But even on its face this cannot be so. Donald F. Wright, the president and C.E.O. of the Times, for example, thinks that it would be terrific—as does Willes—if reporters recommended to their editors or business “partners” certain advertisers that should be in the paper. There was also confusion about the title—“General Manager, News”—that was given to Jeffrey Klein, who is Parks’s business-side counterpart. Why use “news” in his new title, I asked Klein, if he was to be divorced from news? “Interesting question,” Klein, a Columbia Journalism School graduate and formerly the paper’s First Amendment attorney, replied. “If the title was simply General Manager, without ‘news,’ it would suggest that I have oversight over every area of the paper. There would be more confusion.”

Max Frankel, the former executive editor of the New York Times, says that the L.A. paper’s restructuring plan dreamily ignores the likelihood of what Janis Heaphy called “human error.” Frankel says, “My attitude is always simple: The very top of the hierarchy should talk across the wall to our counterparts. But none of the editors down below, the day-to-day editors, should ever be burdened by commercial considerations.” He fears that reporters could come to share the burdens of a money-losing section and begin to think not of readers but of advertisers. “It can’t work,” Frankel says. “There will be exponential increases in pressures.” Benjamin D. Taylor, the publisher of the Boston Globe, worries that by lowering the wall the Times may create as much confusion on the business side: “If an advertiser has a complaint for our ad-sales person, our ad-sales person has the protection of saying, ‘Look, we have a wall. You’ll have to complain to the editor.’ ” Without the wall, ad sales is more vulnerable to pressure.

Editors and reporters are con_dent that Michael Parks is their “_re wall,” and that their _ne newspaper, despite its faults, will remain a publication of record. They want Mark Willes to succeed. They like the fact that he champions growth and the virtues of newspapers, that he professed shock and chagrin when he was told of the note the advertising salesperson had sent to the reporter Debora Vrana. Willes tells his reporters that as a former professor he, like them, is used to asking questions. And he, as a former Federal Reserve Bank official, has also, like them, exercised a public trust. “While this is not newspaper experience, it is relevant experience,” he told a meeting of his national and overseas staff on September 17th. At the same time, Willes makes colleagues uneasy when, in promoting his thoughts, he seems to cross a line from C.E.O. to evangelist.

Last week, a Times Mirror executive described Willes as “a big believer in data”—a reliance that suggests another flaw in his approach. “It’s easy to say that we should not fashion our news coverage to make advertisers feel better or to promote advertisers,” Doyle McManus, the Times’ Washington bureau chief, says. “That one is not hard. Mark Willes understands that. The more extreme issue is that clearly it is both a business necessity and a civic imperative for a great newspaper to increase its circulation. Clearly, an editor must think about marketing. . . . The more difficult, and much more subtle, question when you move to a market-based model of journalism is this: Is there a point where we are eroding, damaging, our core journalistic mission?” In the age of  Mark Willes, that remains the question in the anxious newsroom of the Times.

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