Business & Economy

Should Eli Broad buy the Los Angeles Times and return it to local ownership?

Eli Broad, the 82-year-old billionaire philanthropist, has already tried to buy the Los Angeles Times twice.
Eli Broad, the 82-year-old billionaire philanthropist, has already tried to buy the Los Angeles Times twice.
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Practically ever since the Chicago-based Tribune Company merged with the Times-Mirror Company in 2000, there have been calls from Los Angeles civic leaders for the L.A. Times to return to local control. After the firing of a popular publisher and more newsroom cuts this fall, those calls have grown louder.

Last month, the L.A. County Board of Supervisors passed a resolution calling for local leadership at the newspaper, and a group of more than 50 local civic leaders signed a letter to the Tribune Company, urging the company to put leaders in charge who know and love L.A.

"Having key decisions at the Los Angeles Times made by an entity 1,750 miles and two time zones away is not in the best interests of those who depend on the newspaper for vital information and analysis," said L.A. County Supervisor Mark Ridley-Thomas. "Our constituents deserve better than the current setup, which is essentially publishing-by-remote-control.”

There is one local buyer’s name that keeps popping up: Eli Broad. But there are mixed feelings about the 82-year-old billionaire philanthropist taking over the paper.

Broad has already tried to buy the Times, twice. He partnered with a group of local investors two years ago, but that went nowhere. Then last month, Broad, who did not respond to requests to speak for this story, told the L.A. Business Journal he tried again.

“At the request of the chairman of the board of the Tribune Co. I did make an offer…which they ultimately rejected,” Broad said. “I’ve always believed that the Los Angeles Times and the San Diego papers ought to be owned by Californians.”

Broad and his wife Edythe remain undeterred, according to their friend and occasional lawyer, Mickey Kantor, the former U.S. trade representative and secretary of commerce. 

“Edythe and Eli have literally given hundreds of millions of dollars to this community, charitably," said Kantor. "So this would just be one more opportunity for them to do that, but at the same time build an institution which has greater value in the future.”

Tribune Publishing has a market cap of about $250 million — less than half what it was a year ago. (Tribune also declined to comment for this story.) Even at the most generous premium and with the company’s considerable debt and pension obligations, Broad could afford to buy the company without making a dent in the fortune he's amassed in tract housing and insurance — estimated by Forbes to be $7.4 billion. 

A charity or a business?

“Oh, he’s going to care about the value of the deal," said Kantor. "But I also think he's motivated by something else, and I think the pursuit of the Times is a vision of his that he thinks would culminate his real commitment to this community, which as he says, has been so good to him."

This part-charity/part-business model is already playing out at three other newspapers, which other billionaires have bought – some would say saved – in recent years: John Henry's Boston Globe, Jeff Bezos's Washington Post and Glen Taylor's Minneapolis Star-Tribune.

Media analyst Ken Doctor calls these billionaires the "fifty-fifty" men.

“Fifty-fifty meaning it's 50 percent more or less civic reasons for investing in the paper, and 50 percent profit reasons,” said Doctor.

Doctor says billionaires buying papers has been overwhelmingly positive for the industry.

“What is characteristic about all of them is they have steadied the paper and steadied that enterprise as the paper moves digital,” said Doctor, referring to the shift to online news.

A community-focused L.A. Times

Doctor says that, in the case of Broad, there is not much mystery as to what kind of owner he would be, because he would be expected to continue the community-focused strategy of Austin Beutner, who was named the publisher of the Times last summer.

“We’ve got a year's track record knowing what Beutner would do," said Doctor.

Beutner was regarded as a surprising choice when he was named publisher, because he was seen as someone more likely to own the paper than run it; he was one of the investors that teamed with Broad to buy the Times two years ago. As publisher, he brought back the California section and added locally-focused newsletters and events.

“We have to go back to our roots, which is first and foremost serving the community in which we live," Beutner told KPCC in June. (He declined to comment for this story, citing legal restrictions.)

Beutner used a dramatic metaphor to describe the precarious state of newspapers. 

“Think of the newspaper business somewhat like an airplane where you’re running low on fuel," Beutner said. "The longer you can stay at altitude the more time you have to sort out what a digital future looks like.”

As it turns out, Beutner was given very little time. Last month, Tribune Publishing abruptly fired him.

"It was ludicrous," said Kantor. "He was someone who was committed to this community.”

'A walking conflict of interest'

Even though Beutner's disagreements with his bosses in Chicago were well-known, the Times newsroom was stunned by the firing. However, former Times reporter Kevin Roderick, who now blogs about L.A. media, says Beutner wasn’t without his detractors.

“He was a hands-on publisher," said Roderick. "They referred to him as a meddler.”

Roderick says there’s apprehension about Broad, who titled his 2012 memoir “The Art of Being Unreasonable.” Broad has a long history of nasty public spats with institutions such as the L.A. County Museum of Art.

"His instinct for getting the greatest return on his philanthropic dollars — not only in personal aggrandizement but in the freedom to do as he pleases in public institutions — has shadowed what would otherwise be an unmitigated civic good," wrote Connie Bruck in a 2010 New Yorker profile of Broad. 

Broad also has strong views on contentious local issues the Times covers — most notably charter schools. 

“What he is is a walking conflict of interest," said Roderick. "He’s a rich guy in Los Angeles who has his hands in a lot of things.”

That would not be a problem at the Times as long as there is a strong editor in charge, according to journalism ethics expert Kelly McBride, vice president of academic programs at the Poynter Institute.

"In a way, you want the owner to be an entrenched member of your community, who cares about the community," said McBride. “It certainly creates conflicts of interest, but those conflicts are good tradeoffs compared to a corporation making decisions based on the bottom line.”

But Marc Cooper, a journalism professor at the USC Annenberg School for Communication and Journalism, says Broad might be better off spending his money elsewhere.

“The newspaper business model doesn’t work currently, and it’s going to erode even further," said Cooper.

As recently as 1999, 1,200 people worked in the Times newsroom. When the current round of buyouts is over, the number will be closer to 450. Daily circulation has fallen by about half a million readers.

Cooper says Broad's and others' campaigns to save the Times seems to be driven mostly by nostalgia for a bygone era before the digital age.

“You have an older group of civic leaders who, probably with noble intentions, would like to save the newspaper they grew up with,” said Cooper.

One of those civic leaders, Dan Schnur, director of the Jesse M. Unruh Institute of Politics at the University of Southern California, disagrees. He says what Beutner was trying to do, and Broad would do, is better position the Times for the future by initiating a two-way conversation with readers.

“Particularly in this changing era of journalism, I think one of the greatest services a newspaper can provide is to serve as a center of the community," said Schnur. "I think it’s a lot to harder to serve that community if you’re not an essential part of it.”

It’s hard to know exactly what that entails – and harder still to see how it can fund a newsroom that costs $75 million a year to operate. For now, that continues to be Tribune Publishing’s job, which has shown little indication it wants to sell the Times to Eli Broad — or anyone else.