O’Shea Pulls No Punches in Book on Newspapers, Zell

When Jim O’Shea agreed to take the reins of the Los Angeles Times in November 2006, he sensed a shift in values of the paper’s owner, Sam Zell, from quality writing to quarterly earnings. After several staff shifts and cuts over his 18 months as editor, O’Shea refused his bosses demands to cut staff again. The stand he took for the newsroom cost him his job but also inspired him to write a book that explained to others and especially himself, what exactly had transpired in journalism in not just his tenure at the Tribune Company, but in journalism in the past 30 years. The book became The Deal From Hell: How Moguls and Wall Street Plundered Great American Newspapers, which O’Shea discussed at a Book Night on October 5.

Former OPC President Allan Dodds Frank served as Interlocutor. Frank’s introduction of O’Shea began with O’Shea being a fabled editor who was “released” from his duties at the Los Angeles Times. “The fable is that he didn’t want to fire any more reporters or editors, which is about as noble a thing you can do in the news business such that it is today,” Frank said. “Before he was an editor and big cheese, he was a hell of a reporter.” O’Shea, an OPC member and a former board member, started his journalism career as a U.S. Army reporter covering Korea for Stars and Stripes. He worked at the Des Moines Register following the war and then joined the Chicago Tribune as a reporter in 1979 and worked his way up to managing editor.

Frank asked what O’Shea’s feelings are now about the financial machine in America and how capitalists get funded.

“We’ve gone so far beyond rational in terms of raising money to fund businesses,” O’Shea said. “It’s been a way to just generate fees and profits. There’s not too much thought of can we raise capital to get businesses off the ground? It’s more can we make a lot of money?”

O’Shea explained his upbringing with a father who was an electrician and that his version of capitalism came down to unions and electrical contractors. “As a reporter, I always felt that I was a worker and the guys who owned the paper were capitalists and we fought all the time,” O’Shea said.

This debate with management intensified when O’Shea went to Los Angeles. The disagreement was about the fundamental business approach: O’Shea argued that if cuts were to be made, the company owed it to the paper, public and employees to reinvest this money into alternate forms of journalism, like expanding its Internet arm. “The cutting wasn’t working and we cut and we cut and we cut and [Zell] kept passing off all this money to the guys on Wall Street who are demanding these returns,” O’Shea said. The Tribune Company, O’Shea argued had a revenue problem that was treated like a cost problem and the more it was treated like a cost problem the worst the revenue became.

The differences in approach cost O’Shea the editorship of the LATimes. Also at stake was money. “Not a lot, but they did owe me,” O’Shea said. Management said the only way O’Shea would see the money is if he signed a non-disparagement agreement. It wasn’t until the agreement was broached that O’Shea began to consider writing a book. He said, “I must have something to say if they’re going to try to take the money away from me, maybe I should write a book.”

O’Shea refused to sign and he began to consider writing a book. His other motivation to write the book was to better explain his situation to himself. “I was here right in the middle of the whole thing, but if I had to write a newspaper story or a book, do I know what happened?” O’Shea asked himself. “You can say you think you do, but when you start to think like an editor or reporter, you think, okay. Can I document this? I think this happened. How can I show people that happened?”

Frank suggested they discuss either O’Shea’s career or his tangle with Zell. “I think most people here are interested in Zell,” O’Shea said and went on to describe his entry into the newsroom at the LATimes as the paper’s third editor in two years. The newsroom was in revolt against the Tribune Company because of continuous staff cuts and layoffs and the rivalry and tension between the Chicago and Los Angeles newsrooms was running at an all-time high. O’Shea entered the LATimes newsroom to find photos of the paper’s two previous editors — Dean Baquet and Otis Chandler — and said to himself, “I’m a dead man.” Los Angeles Times then-Managing Editor Douglas Frantz told him that he’d always be viewed in this newsroom as a hatchet man from Chicago. O’Shea said he relied on good journalists who traffic in fairness. He looked them in the eye and said, “I’m a reporter. I came here because I think I can help. I’m only asking you one thing: give me a chance to earn your respect.” To their credit, O’Shea said, over the next 18 months they gave him that chance.

O’Shea’s first directive from Zell was to lay off 90 people. O’Shea refused. Thus began a constant duel between owner and editor. O’Shea said he was proud that under his stewardship, circulation had improved and its weekly magazine, once $6 million in the red, went into the black. He also resisted market-driven research to dictate the news, an idea that Zell and others who he hired — like Randy Michaels a former Clear Channel executive as CEO of the Tribune Company — embraced. “The Tribune had always been run by newspaper guys,” O’Shea said. “In the 1980s, that bond was broken when we had professional managers come in, which changed the whole face of the American newspaper industry.” Now the news at the Tribune Company relies more on numbers and focus groups, an approach O’Shea believes is fundamentally flawed. “A newspaper has to have a community leadership role,” O’Shea said. “You don’t just give them what they want. You have to provide a path and guidance of a situation. We put news and events in context.”

O’Shea is back in Chicago as CEO and Editor-in-Chief of the nonprofit Chicago News Cooperative , which produces two pages of local Chicago news that appear twice a week in copies of The New York Times distributed in the Chicago area (chicagonewscoop.org). O’Shea’s two previous books are The Daisy Chain and Dangerous Company: Management Consultants and the Businesses They Save and Ruin.