• 
• Some highlights from this interview
• Relations between the Chicago Tribune and the Los Angeles Times
• Will the Times continue to compete on international stories?
• What O'Shea thinks of Wall Street's expectations

O'Shea replaced Dean Baquet as editor of the Los Angeles Times in November 2006; he had previously worked as managing editor of the Chicago Tribune.This is an edited transcript of an interview conducted on Jan. 12, 2007.

Editor's note: Read FRONTLINE's response to a critique from the Los Angeles Times.

Update -- Jan. 25, 2008 After clashing with publisher David Hiller over further budget cuts, O'Shea became the third Times editor to leave since 2005. Read O'Shea's farewell memo to the newsroom.

So you come from the Chicago Tribune.

Right.

The Chicago Tribune and the Tribune Company, in the '90s in particular, got into what's called synergy. What's that all about?

That was trying to capitalize on the newspaper and television and the Internet and fusing them. ... It was kind of experimental. Frankly, it didn't work that well, because most of the TV people said the [newspaper] reporters weren't that good on TV. But the idea was to see how much you could capitalize on the newsroom to generate content off of numerous platforms: TV and the Internet and online.

At that time, I think, we were involved in Chicago Online, which was largely putting the newspaper online, but [also], can you take the story that you had for the newspaper, put it online, and then kind of create communities of interest off of that story?

Did it increase the reporting capacity of the newspaper? Did journalism benefit from it?

I think so, in a way. You had wider reach for your stories. You would write a story for the paper, and it would also be on TV, and it would also get on the Internet. ... The people that did it liked the exposure, and they liked that their stories got more exposure. ...

And did it increase the advertising revenue? Was there a way you could increase the economic advantages?

I don't know. I don't think so, because I think we were a bit ahead of our time. The cable television station, CLTV [Chicagoland's Television], is still going, and I think that is making a profit now, but for years it lost money because it was an investment into the news operation; you had to build audience and everything. I can't say that it made money, and in a couple of the ventures, they folded.

“I don't want cutbacks either. But I'm a realist. If your revenues are starting to fall and your expenses continue to go up, that's not a good formula.”

In fact, if I recall correctly, Jack Fuller, who was then in charge of the publishing division, is on record that they lost a fortune putting money into the Internet and in the synergy idea, and they ended up losing a ton of money, and that's why they kind of retrenched from online. ...

So when you heard that the merger [with Times Mirror] was going to happen, did you think it was a good idea?

Oh, I thought it was a great idea at the time, yeah. I thought it would be really interesting.

Because I've read that there's been some cultural estrangement between the Chicago Tribune and the Los Angeles Times, between the different entities, because you're different newspapers.

Yeah, I think the first question came up, everybody was scared. All the other papers were frightened that we would close their foreign bureaus, and it would just be Tribune foreign bureaus, and that didn't happen. The original idea was to preserve the autonomy of the individual papers, and for a while that worked, because economics were good, ad revenues went up, and things were swimmingly fine.

The culture clashes that you talk about probably came later on, when things got a little tighter and you had to start looking at, could we work with each other?; could we work more closely? ... I don't think anybody was unrealistic enough to envision that a Chicago Tribune reporter could write something that would be for an L.A. audience. ...

The L.A. Times, as I understand it, according to [L.A. Times publisher] Mr. [David] Hiller, it's over a billion in revenue and over $200 million in profit.

… Newspapers are good businesses; they're very good businesses. That's one of the puzzles of this whole situation we're in. I mean, if I were a young guy and I had some money, I'd be investing in newspapers right now. I think all of this fire-sale mentality is crazy. ...

[Berkshire Hathaway chair and billionaire investor] Warren Buffett says it's an industry in decline. All the analysts we talk to in Wall Street say, "This is an industry we don't recommend you invest in."

And they can say that. I think they're wrong. ... I'm not smarter than Warren Buffett. I know the newspaper business. I don't think you can survive in a society without news, and I don't think anybody produces better, higher-quality news than newspapers. ...

The Los Angeles Times, which you've come to, has been embroiled in a public controversy about cuts and cutbacks in the newsroom and staff leaving. What's this all about then?

I think two things. One, there is a perception that the industry is in decline because of readership problems, and we do have readership problems. But it's not like they can't be reversed; I think you can. I think we have to change as an industry. And secondly, when any industry gets into some problems, they have to cut back. That's just part of life. ...

More people are reading the Los Angeles Times today than ever in its history. It's just that not everybody's picking up the paper and buying it. They're getting it online, and they're getting it in the paper. And when you look at our audience, it's actually larger, but we haven't figured out a way to actually monetize that and be able to charge for that information. And when we figure that out -- and we will -- we'll be a very successful business again.

[Editor's Note: On April 23, 2007, the Times announced plans to reduce its staff by 100 to 150 employees, or 3 to 5 percent of the workforce, through attrition, buyouts and layoffs. The memo from publisher David Hiller also said that plans were in the works to add positions to the Times interactive team.]

Do you know [former L.A. Times publisher] Jeff Johnson?

No.

Never met him?

Oh, I met Jeff very briefly. When I say I don't know him, he and I have never really sat down and had an extended conversation. ...

But you did work with [former L.A. Times editor] Dean [Baquet].

I worked with Dean, yes. I did.

His fear is that -- along with his predecessor, John Carroll -- that the guts are going to be cut out of the news organization in these cutbacks, right?

He and I have talked privately and as friends about cutbacks, and I don't want cutbacks either. But I'm a realist. If your revenues are starting to fall and your expenses continue to go up, that's not a good formula. So something's got to give, and you have to start saying, "OK, what do we have to do to reverse this?"

I guess my difference is I don't have the time and the focus on, well, what caused the problem? The only thing I can really focus on is, what's the solution? How do we get out of this? ... And that's what is going on right now.

The Los Angeles Times, under John Carroll and Dean [Baquet], won, I believe, 13 Pulitzer Prizes. Yet they're asked to cut. It would seem like you would want to build on that rather than cut.

I do want to build on that. I have to build on it in a different way, though. Dean and John both focused a lot of attention on the newspaper and not enough attention online. I think if you asked them both, they'd probably say that's right. I have to look at it and say, OK, I have to figure out what's the right balance between the newspaper and online to establish a news organization that draws a larger audience of readers. ...

The question seems to be, with declining revenue from the newspaper, the hope is that it will be replaced by increasing revenue online. Is that right?

Right. Right.

And then some numbers I just looked at say that a subscriber to a newspaper is worth, to the news organization, approximately $1,000, but someone who's reading it online is worth about $5.

Right. Right, right.

Will the Internet revenue ever catch up to the newspaper revenue? How can that possibly happen if that's the different scale of --

Well, it's a different scale now, but if you can create a larger audience online, you can start charging more for it. ... The Los Angeles Times has to become the premier locally edited and produced newspaper for Southern California that gives our readership the best information about the nation, the world, the local region, the state of California, and it has to deliver it both in print and online.

At this time, our biggest audience is print, and nobody says you can quit investing in that; you have to. But the big key thing is you have to figure out, how can I take some of the assets that I have invested in the newspaper and convert them to online, and build a bigger audience online? ... Well, I say online will become the discovery area of our organization: This is where people will go to discover things, and this is where people will go to find breaking news, and this is where people will go to find out, well, if I want to take a trip, how do I book it, and where do I go? ...

One of the main investors in the Tribune Company, [vice chairman of Ariel Capital Management Charles Bobrinskoy], said to us [the Los Angeles Times] has to go local and give up the idea that it's one of the big national newspapers, that it's kind of the New York Times of the West Coast or a competitor with The New York Times on all major stories.

I don't totally agree with that. I don't think the Los Angeles Times can be successful by relying on someone else to cover the world for it. Can't happen. People here want more than that from the Los Angeles Times. ...

Now, should it be The New York Times? No. The New York Times is The New York Times. The Chicago Tribune is the Chicago Tribune. The Los Angeles Times should be the Los Angeles Times, because that's how it will be successful. And being the Los Angeles Times is being a major newspaper in America, covering not only the city but also the nation and the world.

Today the Los Angeles Times competes with The New York Times on most major national and international stories, so the fear is that it will disappear from that regular competition on all major national and international stories and that it's one of the only other general-interest newspapers in the country that does that.

I don't know of anybody that's advocating that we will disappear from the national or foreign scene. ... But I think you also have to cover Southern California. If you don't cover your own backyard, you are going to lose a lot of readers. You have to cover it; any newspaper has to do that.

But your predecessors would say exactly the same thing. They would say, "We do a better job of covering the region and the state, but we also have to have this national and international presence, and we're in danger of not being able to do that."

Well, I agree with them on that issue. Do we have to have exactly the same number of people we have today covering that area? I don't know that. I don't think that is necessarily true. You may have to adjust a little bit. ... Maybe some people have to change their beats, work a little harder, but it doesn't mean you quit covering Washington. ... And that doesn't mean I'm going to give up covering the war in Baghdad. We have to cover the war; people want that. It's our obligation to cover that. ... But I also believe you have to be in Sacramento covering the State House. ...

How many people does the Chicago Tribune have in Washington, D.C.?

I would say probably somewhere between 15 and 20. I don't know exactly anymore. I think at one point we had about 19 people in Washington.

And the Los Angeles Times has?

Probably double that.

So the fear is that you won't have the same kind of in-depth coverage because you'll be redeploying resources here into the state?

Well, that may be the fear. ... Let's say I have 40 reporters in Washington and suddenly I decide I'm going to have 35. Does that really mean that I'm going to lose depth? I doubt it. I covered Washington for 10 years. I know a little bit about how to do it, and it's not related to the number of people you've got there; it's related to the quality of people you've got there and what kind of story they're after. ...

I've been in print, and I was in television and back in print, but what I lived through in the television industry was, in the 1980s, a technology change: Cable came along, digital cable, major corporate ownership that swallowed up the various networks, and stockholder pressure. Result: Once large and vigorous newsgathering organizations closed their bureaus and relied on other sources of information and today don't do very much newsgathering. And now something similar to that, a similar pressure, seems to be happening in the newspaper business, which is sort of the last line of defense of newsgathering. ...

Some of the pressures are similar, and you are seeing in some sectors dramatic cutbacks, but I don't think you can say you're seeing that at the Los Angeles Times. I don't think you can say you're seeing that at the Chicago Tribune. When I went to the Chicago Tribune in the '90s to become the associate managing editor for foreign and national news, I had I forget how many bureaus. Five to 10 years later, when I became the deputy managing editor, I still had all those bureaus. All those bureaus exist today. So nobody's really cut back on foreign news. I think at the Los Angeles Times the same thing is true. ...

But I don't see the major kind of cutbacks that I think you did see in television. I just don't know enough about television, but it seemed to me that television had another medium that they go to -- entertainment -- and they could get revenue off of that. Newspapers really don't have anywhere to go if they aren't news. If you start backing out of the news business and closing down and not telling people what's going on in the world, you aren't going to be very successful.

But isn't there a pressure on newspapers to go or feature other areas that are, in a sense, more entertaining, because they are losing advertising; you are losing subscribers? So, for example, it's a natural that the Los Angeles Times does more in-depth coverage of Hollywood.

But I think that's good; I think Hollywood was undercovered [by the Times] in the first place. But I don't think anybody's sitting there and saying, "Let's go cover Hollywood so we can get more revenue." I think people are saying, "Let's go cover Hollywood because we aren't doing a good enough job covering Hollywood." And if we're doing our job right, somebody else can probably get revenue on that, but my decisions can't be driven by where we're going to get revenue. My decisions have to be driven by, where are we going to get readership?

So you don't see a big threat to the newspaper industry, and the Los Angeles Times in particular?

There is a threat that if we don't expand online, and if we don't cover our region better, then we become irrelevant to people here. ... Are there pressures? Of course there are pressures. There are cost pressures all over the place, and that's because of natural economic forces that are beyond your and my control. But I don't think that means we're doomed. ...

The Chicago Tribune, before the merger, tried to go local -- hyperlocal, right?

Right.

Did it work?

It was a disaster. No, that's overstating it; it wasn't a disaster. [It] didn't work -- I mean online. We tried to go hyperlocal online with something called Digital Cities, and we put people out in the suburbs, and we put people out in all these little towns, and they gathered all this information so you could go online on what I think was then Chicago Online, and you could find out the school lunch menu and all this [stuff] they all talk about.

And nobody came. They said: "Sorry, that's not what we expect from the Chicago Tribune. We expect something different from the Chicago Tribune. If we want that kind of information, we'll go to the Pioneer Press weekly newspaper where they have all that stuff. And what we want from the Chicago Tribune," what we learn is, "is more look at the region: ... If I have an environmental problem in Arlington Heights, is it better or worse than what's happening in Oak Park?"

That was the sort of information they were expecting from us. So in terms of going online and becoming hyperlocal, that didn't work. Now, what did work is, in some cases, we did carve out about eight zones to the paper, and we would produce a locally produced metro section for each of those zones. ... But I don't think that's what everybody's referring to as hyperlocal. ...

When we broadcast this, The Washington Post is going to unveil a new hyperlocal operation, particularly in the suburbs of Washington. They have brought in Rob Curley, who was working in Kansas and then in Naples, Fla., to run these operations. So in many ways The Washington Post is sort of similar to the Los Angeles Times. It has a large metro regional area but has to cover the nation and, to a certain extent, the world. But you're not going to go in that direction. Is that what you're saying? ...

I don't know what they mean by hyperlocal. Does that mean that they're going to put reporters in all these places? I don't know. I couldn't afford to do that. ...

I think you can take a reporter or a team of reporters and put them in a region, and you can put some database people with them, and they can build sites where you can link and you can get very specific local information. But you have to say: "This is unedited. This is what you would get if you went up to the school board and asked for it." But if you want to read about what it all means, ... you're going to come to the Los Angeles Times.

Now, to me, that's good local reporting. I don't know if it's hyperlocal or if it's linked or whatever it is, but it's good local information, and this Los Angeles Times can provide that, and it will.

But when I talk to people on Wall Street or to investors in Chicago, they all say the same thing: that the Los Angeles Times in particular has to give up its bureau in Cairo, has to give up the idea that it's a national and international player. It can still have some people, but it has to redeploy its resources into this regional or metropolitan area and give up that image of itself as one of the three or four big national newspapers in the United States.

And I guess I disagree with Wall Street and with the people. Do we have to cover this area best? Yes, but I don't think that covering Los Angeles and doing a better job on local coverage means that you have to give up anything. You can do that by simply redeploying and continuing to be very aggressive on a national and global scene, if you want to call it global.

So you're saying they don't know what they're talking about?

Yes. ... The people on Wall Street have to do a better job of giving accurate information to investors, because the stuff they give you in their annual reports is a bunch of pap. Since when did they become the people who ... are the gods of journalism? They don't know anything about newspapers. ...

Well, they're the owners, or they represent the owners. And they are the ones who advise people who make these large investments. And they'll turn around to you and say, "A major newspaper just sold at discount for, like, 30 percent less than it was purchased for by its owner, because you're not doing the kind of coverage that people want."

Well, if they were so smart, why did they pay 30 percent too much for it? I mean, they're the ones that paid all the money for it. They're no [font] of wisdom either. I'm just saying that Wall Street is not the be-all and end-all of journalism. ...

But, Mr. O'Shea, the Tribune Company bought the Times Mirror Company.

Right.

And today the combined company is worth what Tribune Company paid for Times Mirror. Those are the people who are setting that price.

And they were the ones that set the original price, too; they were the ones advising us to pay too much for it. We paid too much for the company, and we're paying the price for that now. That doesn't mean that the world is at an end. ...

So you disagree with Wall Street.

Yes.

Do you disagree with John Carroll, the former editor, who says that because of what's been going on, the very soul of newspapers in the United States is being threatened by this economic crisis?

Yes, I agree with that: The soul of the newspaper industry is being threatened. That doesn't mean it's gone; it doesn't mean that you can't revive it. You've got to sit down and say: "OK, the soul is threatened. So what are we going to do to solve it?" You can't just sit there and say: "The soul is threatened. The soul is threatened. The soul is threatened." Yeah, we all know that. But what are we going do about it? That's the question: How do you get out this? How do we turn this around? How do we take everything that we do every day, which has got a lot of value -- and a lot more value than I think Wall Street is placing on it -- how do you turn that around?

How do you sit down and say to yourself: "OK, we are having troubles. We are losing readership in print, and yet people are buying us online. So how do we [amass] that audience?" ... I can give a large portion of the people in Los Angeles interested in sports, because they read my sports section. But I can also take my Lakers columnist or my Lakers beat reporter, and I can deliver to you, online, everybody that's interested in the Lakers, because I'll build a page around those columnists and around that expertise. That's got to be an audience that's of interest to an advertiser, somebody who would really like to be able to reach that targeted audience. How do you blend those two to create more revenue than you created when you had this one and this one apart?

I think you can do that. That's the way you've got to go in the future, and I think the Los Angeles Times is going to show everybody that they're wrong. ...