L.A. Times Chief Plots Change -- WSJ

Ross Levinsohn faces wary staff as he turns focus to subscriptions and licensing content

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 25, 2017).

When Ross Levinsohn addressed Los Angeles Times employees earlier this month, the newly minted chief executive of the embattled newspaper said he understood if they were wary of another leader promising positive changes.

"I'd be skeptical of, 'here comes another strategy,'" he said at the all-hands meeting, according to people who attended.

He's pursuing a plan anyway.

The 54-year-old media veteran, whose resume includes stints at Yahoo and Wall Street Journal parent News Corp, was appointed CEO by Times parent Tronc on Aug. 21. He arrived in a shake-up that purged the paper's top ranks.

Current and former Times employees say there is widespread fatigue at the paper after a decade of leadership turnover and staff cuts, and uncertainty about where Tronc will take the business, which has been hit hard by declines in print advertising and increasing competition in digital publishing.

Mr. Levinsohn plans to invest more in coverage of entertainment and culture, building digital "verticals" that distinguish the Times from its competitors, people familiar with his thinking said. He also sees digital subscriptions as a major emphasis -- publications like the New York Times have had big surges in subscriptions in recent months -- and is focused on using data to target likely subscribers, the people said. The paper began charging readers for online access in 2012 and says it has more than 105,000 digital subscribers.

Mr. Levinsohn also wants to put more effort into licensing the publisher's intellectual property; he is said to be eager to explore, for example, whether "Dirty John," a series about a deranged stalker that ran in print and has a podcast component, can be developed into a TV show or movie.

The Times has been diminished by forces that have depleted the entire newspaper industry. Its revenue has been cut approximately in half since the early 2000s when it brought in roughly a billion dollars a year, according to two former employees with knowledge of the paper's finances. Buyouts and layoffs have sliced the newsroom editorial staff to less than 500 from over 1,000 in 2001.

Its parent company, Tronc, whose other holdings include the Chicago Tribune and the Baltimore Sun, has had three straight quarters of ad revenue declines over 15% in its traditional publishing arm. Overall revenue fell 8.6% year-over-year in the second quarter to $370 million.

Mr. Levinsohn is no stranger to tumult in digital media. While at Fox Interactive -- then a unit of News Corp -- he oversaw the social-networking site Myspace, which ultimately was eclipsed by Facebook. He also served briefly as interim chief executive of Yahoo during a chaotic period for the internet search giant.

Mr. Levinsohn has been holding lunches to hear out employees, while trumpeting his affection for the Times in internal memos. Some employees have responded well to his enthusiasm, but there are early skeptics, too.

When Mr. Levinsohn chose Forbes veteran Lewis D'Vorkin as the new editor in chief, some on the staff worried he would bring with him the business publication's advertising approach, which they view as in-your-face clutter that annoys online readers, according to employees.

At one lunch session over pizza and salad, Mr. Levinsohn was asked about the decision to hire a white, male editor in a community as diverse as Los Angeles. Employees had submitted candidate suggestions to the human resources department that included several women and minorities, people familiar with the matter say. Among them: Ann Marie Lipinski, the curator at the Nieman Foundation; Emilio Garcia-Ruiz, managing editor for digital at The Washington Post; Marc Lacey, national editor at the New York Times; and Lydia Polgreen, editor in chief of HuffPost.

Mr. Levinsohn responded that he was seeking the best possible candidate for the job, according to a Times employee who attended the lunch meeting. An internal memo noted the company reviewed more than 80 potential candidates.

"It's easy to say that you're going to take diversity into account. It's an entirely different thing to actually act," said the employee.

Mr. Levinsohn also hired Mickie Rosen, a Japanese-American woman, as the Times's president.

The new CEO is also dealing with labor unrest. Organizers of a newsroom union are seeking better compensation and stability, and say employees are upset about what they perceive as high executive pay even as they get infrequent raises and diminished benefits.

"There's a lot of plundering at the top while we're trying to survive," said one employee involved with the unionization effort. "It can't go on like this."

In 2016 Tronc CEO Justin Dearborn had total compensation of $8.1 million, including a base salary of $450,000 and stock and option awards, according to a securities filing. The stock awards, which make up the majority of his pay, vest over a three-year period. Mr. Levinsohn's three-year contract calls for an annual salary of $1 million, plus stock and options grants. He is also eligible for up to 10% of the money Tronc earns syndicating content overseas or licensing the Los Angeles Times content and brand.

Representatives for the union drive say that a majority of the newsroom has signed union cards in support of the effort. They say they plan to ask Tronc to voluntarily recognize the union but will proceed with a vote to force the issue if the company refuses to do so.

Top editors at the Times recently gathered in the newspaper's page-one conference room and were presented with arguments to counter the unionization effort, according to one person involved in the union drive.

Mr. Levinsohn thinks employees should be able to decide for themselves whether to unionize, provided they have the relevant facts, according to one of the people familiar with his thinking.

Last week, interim Executive Editor Jim Kirk sent a memo to the newsroom that accused organizers of using "selective statements designed to convince you to join."

Mr. Kirk's memo said the company would bargain with the union if it was voted in but cautioned that negotiations with a union would put all current benefits at risk.

The memo cited the example of a Tronc-owned publication, the Baltimore Sun, noting that its union contracts have prevented its unionized staff from getting general pay increases since 2013.

"Please remember that nothing that exists now is guaranteed and we have seen both positive and negative outcomes within Tronc and across the industry," the memo said.

On Tuesday, dozens of journalists at the Los Angeles Times identified themselves as union supporters, calling on their colleagues to join the effort.

(END) Dow Jones Newswires

October 25, 2017 02:47 ET (06:47 GMT)