Don’t blame Tribune Co. for grabbing Times Mirror Co., one of the nation’s richest media properties. And don’t blame the Chandler family for selling out at a very rich premium. In the current frenzy to become bigger and more powerful, media companies are not paying much attention to the sensibilities of local boosters and besides, given the ongoing troubles at the Los Angeles Times, it’s conceivable that the paper might actually prosper under new management.
What is regrettable, however, about last week’s announced acquisition of Times Mirror is where it leaves Los Angeles, and more broadly sketched, what it says about Los Angeles.
When the first wave of L.A.-based corporations were acquired about a decade ago starting with aerospace companies, and most especially Lockheed economists and elected officials pretty much dismissed the losses as coincidental. It just so happened, they argued, that more powerful out-of-town corporations were snapping up smaller, local ones. Could have easily gone the other way, they maintained.
But then came other waves more aerospace companies, followed by the major banks and thrifts, and then media and entertainment. And now, two of the city’s most prominent corporate bulwarks, Atlantic Richfield Co. and Times Mirror, are on the verge of being taken over. That would leave downtown L.A. without a single public company among the Business Journal’s top 25.
Coincidence? Hardly. The loss of so many Fortune 500 companies has reached such chronic proportions that there must be a more profound explanation than mere chance. We suspect there are several subtle factors at play, including the lack of a cohesive business community, the nagging difficulty in attracting creative executive talent to Los Angeles, and the fact that there hadn’t been a large base of major corporations located here in the first place.
The Times Mirror sale is especially instructive. While the company’s financial condition had certainly improved under Chairman Mark Willes, the decision to focus squarely on newspaper properties as opposed to multimedia now appears shortsighted, especially when compared with the Tribune’s long-term strategic plan that focuses on the mixing of print, broadcast and the Internet.
Why did the Chicago-based Tribune have such vision, while Times Mirror based, after all, in the world’s entertainment capital did not? Perhaps for the same reason that senior executives at First Interstate, Arco, MCA (now Universal Studios), H.F. Ahmanson and Carter Hawley Hale similarly lacked vision in their respective industries.
Not being a corporate center isn’t the end of the world, of course. It could be argued that the strength of L.A.’s economy lies not in Fortune 500 companies but in the small to medium-sized businesses that never get much notice. And whether a company is actually based here doesn’t always reflect its importance to the community, as seen by, say, Bank of America.
But like it or not, there is value to having a corporate presence in your town especially your downtown. And that value goes beyond the obvious matters of philanthropy and employment. Part of it just comes down to having an intangible security blanket for the region as well as a pillar from which the rest of the business community can be developed.
L.A. now lacks such a pillar. And as business boosters wring their hands about the future, they must face up to an even sadder truth: There’s not a damn thing they can do about it.
