L.A. Times's epic battle to retain glory – and profits

Act One came in August when the Los Angeles Times, the nation's fourth-largest newspaper, was asked to make serious job cuts by corporate bosses half a country away in Chicago.

Act Two came in September when the publisher publicly refused, but after holding out for three weeks, he collected a pink slip anyway.

Now, in the lull before what is expected to be another showdown in December, the Los Angeles newspaper has launched the "Manhattan Project," in which its own staff will investigate solutions to reinvent the paper for the future.

With newspapers across the country scrambling to respond to the loss of readers, ads, and revenue, the Los Angeles Times's reinvention project is a window into the struggle of an American newspaper industry that is colliding with the Internet and other news-delivery options.

"What is going on with the L.A. Times is going on in newspapers everywhere," says Tom Petner, a journalism professor at Temple University in Philadelphia.

He and others cite steady news of layoffs at papers across the US in recent months capped by announcements last week that 101 jobs will be eliminated at the San Jose Mercury News by December and the announcement of imminent layoffs at The Philadelphia Inquirer.

"The title, [Manhattan Project] is telling because it sounds nuclear and urgent," says Mr. Petner. "Everyone is trying to figure out where their audience is going, what they are reading, where, and how to reach them."

Newspapers have faced a steady decline in subscriptions as people – particularly younger generations – shift their news habits to TV and the Internet.

Newspaper revenue has also fallen off as a result of fewer classified ads, some of which are now posted on websites. And department stores have consolidated or cut back on advertising. The Los Angeles Times has been hard hit by fewer movie ads in its pages.

The Times has also been pushed to pursue higher profit margins to boost the stock of its parent company, the Tribune Co., which lost nearly half its value since it bought the paper in 2000.

In August, the newspaper, then reportedly making a 20 percent profit, was told to make staff cuts to attain a 30 percent profit. Publisher Jeffrey Johnson refused, saying the staff had already been trimmed from 1,200 to 940 in recent years and further cuts would force it out of the top ranks of American journalism.

Several civic leaders have urged the Tribune to return the paper to local ownership, and three Los Angeles billionaires have expressed interest in buying it from the Tribune Co., which is considering selling some of its media holdings.

The same is true of The Boston Globe, where Boston native and former General Electric CEO Jack Welch is reportedly considering putting together a bid to buy the paper from The New York Times Co.

The staff at the Los Angeles Times, for its part, is working to chart its own future. "Now is the time to figure this all out, whether the Tribune keeps us or not," says Vernon Loeb, the California investigations editor who helped form the Manhattan Project.

As newspapers wrestle with designing websites and repackaging their print versions, consultants, advertisers, and readers are usually the key players.

The Times's project stands out because journalists are doing it themselves, experts say. Three full-time investigative reporters and six editors are brainstorming, soliciting staff input, and scouring papers across the globe for guidance. They are exploring how and why new readers visit the newspaper's website and what compels them to keep reading online.

"We figure the answers to our future success will come from our newsroom, not from anyone in Chicago or anywhere else," Mr. Loeb says. "We just lost one publisher and the whole state of the company is at stake." Among the solutions the team is examining: new regional editions and adding insights from new columnists and ordinary citizens, who can keep tabs on local issues. New features could include video, interactivity with writers, and online communities of like-minded readers.

"We want to be able to say, 'Here is the new plan to expand revenue based on the best thinking in the newspaper industry and the Internet from all over the world,' " Loeb says.

The Times should be lauded for considering new business models that can sustain its print version and transfer the paper's journalism to the Web in ways that can build audiences, says Tom Rosenstiel, director of the Project for Excellence in Journalism.

"One of the struggles within the organization is the question of whether newspapers are a dying industry in print or an emerging industry online," he says "If they are a dying industry, then the cutbacks make sense. But if they are emerging elsewhere in new forms, [the cuts] may seem irrational."

Some experts are concerned that all the downsizing at metropolitan newspapers has curtailed local news coverage.

"If they ignore their root market by refusing to cover serious issues in their communities, they stop being a competent Fourth Estate check-and-balance on government." says Jerry Dunklee, professor of journalism at Southern Connecticut University.

He notes that the Connecticut State House now has eight newspaper reporters covering state government compared with 25 more than two decades ago. At the New Haven Register, the number of city reporters dropped from 11 to seven in the past few months.

But other observers say that the "loss of localism" might be overstated.

"There are plenty of examples of city newspapers that were locally and privately owned that were horrible and [in which] chain ownership probably raised the minimum level of quality," says Mr. Rosenstiel.