The sudden dismissal last week of Austin Beutner as publisher of the Los Angeles Times was both troubling and mysterious.
Mysterious because, as of this writing, no good explanation was offered for the canning. After all, it appeared Beutner was doing a great job. He revived the journalistic mission of the Times, oversaw several initiatives and spearheaded the sensible acquisition of the San Diego Union-Tribune, all in a little more than a year.
One semi-obvious reason he got the boot: the appearance of self-dealing. Beutner knows Eli Broad, who made a bid to buy the Times. Broad’s bid was summarily rejected and Beutner was dismissed soon thereafter. That rapid sequence leads one to assume that Tribune Publishing’s CEO concluded that the guy he was paying to run the Times was also sitting on the other side of the table, at least tangentially involved in a buyout deal in which he’d presumably have some stake.
Interestingly, Broad last week told one of our reporters that he was invited to bid by the chairman of Tribune. The chairman, Eddy Hartenstein, is the former publisher of the Times, and he brought Beutner in to replace him as publisher last year. That could have led Tribune’s CEO, Jack Griffin, to conclude that an L.A. cabal – Hartenstein, Broad and Beutner – was trying to wrest ownership of the Times away from Chicago. Perhaps some inside information was being brokered, the CEO may have wondered.
But wait. This semi-obvious reason may not make sense. That’s because the operating assumption for the past year was that Beutner – who’s an investment banker by trade, not a business operator – was brought in as publisher so he could put together a deal. Under this scenario, he would run the Times for a year or so, and with his deeper understanding of the business, he could put together an informed buyout deal, relying on his contacts with civic-minded people, such as Broad, to make the offer. That way, the Times could go into civic hands willing to pay a good price and Tribune could be on its way to an orderly disposal of its parts. After all, the sum of Tribune’s parts is likely greater than the whole; there’s scant economic reason for Tribune’s handful of metro daily newspapers to be combined in one company since they don’t even get their paper from the same mill.
In this scenario, Beutner was simply doing what he was supposed to do – find the highest and best buyer for the Times. So if that’s the case, why was he fired?
One person with knowledge of the situation said that this assumption of Beutner as stalking horse may have been true at one time, but things have changed. Griffin, the CEO, apparently has decided that he wants to keep the company intact. He has built up a sizable corporate office in Chicago and now seems intent on presiding over a big media company that, he thinks, is on the comeback trail financially and could grow in the future. Therefore, the buyout offer from the boys in Los Angeles was about as welcome as a printers’ union strike.
Whether that’s true or not has not been made clear. As noted at the outset of this column, this situation is mysterious.
But, also as noted, it’s troubling. Troubling because of what comes next. The incoming publisher has no L.A. connection and apparently arrives with the marching orders to get the Times’ finances in order. Beutner, for all his civic outreach and expansion of the journalistic product, allowed costs to run high, at least according to Chicago-think.
The newsroom appears to be target rich for the corporate axe. One informed article suggested that $10 million to $20 million may be lopped off the newsroom budget of $70 million to $75 million. Do the percentage calculation if you want to say “Ouch.”
So Angelenos face the prospect of a newspaper that is not owned by Broad or any other civic-minded steward and instead seems destined for severe cost-cutting and diminution of quality and meaning.
Beutner’s firing is mysterious. But mostly it’s troubling. That’s the big thing.
Charles Crumpley is editor of the Business Journal. He can be reached at firstname.lastname@example.org.
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