The Deal from Hell

by James O'Shea

  137 Three years later, in January 2003, late on a Author’s interview with Ann Marie Lipinski, Chicago, IL, winter 2010.

  140 The company made $650 million in profit on revenues of $5.3 billion the first year Tribune Company, 2003 Annual Report, February 2004.

  140 country to report and write “Code Blue” “Code Blue: Survival in the Sky,” by John Crewdson, Chicago Tribune, July 1996.

  141 Organizations like Save the Children Federation “The Miracle Merchants,” by Lisa Anderson, Chicago Tribune, March 1998.

  141 Dr. Bob Arnot, the physician who regularly Author’s telephone conversation with Dr. Bob Arnot. Arnot called the author when he was deputy managing editor for news at the Chicago Tribune and the editor who supervised the Save the Children coverage.

  Chapter 10: A Changing Landscape

  149 Leo Wolinsky drove down the Author’s interview with Leo Wolinsky, Los Angeles, CA, fall 2010, and by telephone, 2008–2010.

  150 As editor of the Baltimore Sun, Carroll Author’s telephone interview with John Carroll, summer 2009.

  150 About three weeks before In December 1999, David Willman of the Los Angeles Times wrote a two-part series reconstructing the Food and Drug Administration’s fast-track approval process for the diabetes drug Rezulin and uncovered high-pressure lobbying, attempts to silence critics, and 33 deaths of people who had taken the medication.

  151 Carroll had been editor of the Lexington (Kentucky) Author’s telephone interview with John Carroll, summer 2009.

  152 All eyes fell upon the tall, lanky, unflappable Author’s interview with Leo Wolinsky, Los Angeles, CA, fall 2010, and by telephone, 2008–2010.

  153 In the business offices of the Times, Puerner shook Author’s telephone interview with John Puerner, winter 2010.

  153 Otis was happy about the change Author’s interview with Efrem (Skip) Zimbalist III, Los Angeles, CA, fall 2010, and by telephone, winter 2009. The substance of the Chandlers’ sentiment was also confirmed in the author’s interview with John Madigan, Chicago, IL, winter 2008, and Privileged Son: Otis Chandler and the Rise and Fall of the L.A. Times Dynasty, by Dennis McDougal (Cambridge: Perseus Publishing, 2001).

  154 Dean P. Baquet was an unconventional Author’s telephone interview with Dean Baquet, winter 2010.

  155 One of his fondest New Orleans journalistic Author’s recollection of conversation with Dean Baquet. The quote was widely repeated and became standard fare in stories about Edwards. Other details on Baquet’s career came from “Nothing but Fans,” by Rachel Smolkin, American Journalism Review, August/September 2005.

  157 When two heavily armed gunmen wearing body “Gunfire, Hostages and Terror, Suspect Slain, Ten Officers Injured in Heist Gone Awry,” by Beth Schuster and Doug Smith, Los Angeles Times, March 1997.

  158 By 2003, Puerner had cut the Author’s telephone interview with John Puerner, winter 2010; and Tribune Company, 2003 Annual Report, February 2004.

  158 “For years, the newspaper industry had . . .” Author’s interview with David Hiller, Chicago, IL, winter 2008 and winter 2010.

  160 Much had been made over Carroll’s zealous The dispute over the similarities between the editor of the Baltimore Sun on Simon’s show and John Carroll is well documented in various magazine and newspaper articles, such as “The Angriest Man in Television,” by Mark Bowden, Atlantic Magazine, January/February 2008.

  Chapter 11: Market-Driven Journalism

  163 In July 1982, a tall, athletic “Tribune’s Chief Is Second to None,” by Steve McClellan, Broadcasting & Cable, April 2003; and official Tribune Company biography for Dennis FitzSimons. The details of FitzSimons’ early years at Tribune came from these sources and interviews with Tribune executives who knew him. FitzSimons confirmed the details in an interview with the author in Chicago, IL, winter 2010.

  164 In a profile of FitzSimons, Los Angeles Times, reporter “Tribune CEO Is Expected to Keep His Cool in Fight; Dennis FitzSimons, who has been something of a mystery despite his job, faces public criticism,” by Thomas S. Mulligan, Los Angeles Times, June 2006.

  165 Instead of acquiring programming, or shows Author’s telephone interview with Vinnie Malcolm, former manager of KTLA-TV in Los Angeles, a Tribune Company broadcast property, winter 2010.

  165 Within a year of arriving at Tribune “Tribune’s Chief Is Second to None,” by Steve McClellan, Broadcasting & Cable, April 2003.

  166 Unlike Dowdle and Madigan, said Jim Kirk Author’s interview with Jim Kirk, former marketing and media columnist for the Chicago Tribune, winter 2011.

  166 WGN had been locked in a long feud “Tribune’s Chief Is Second to None,” by Steve McClellan, Broadcasting & Cable, April 2003.

  166 Together, Dowdle and FitzSimons led Tribune Company, 2003 Annual Report, February 2004.

  167 When TV syndication mogul Roger King “Tribune’s Chief Is Second to None,” by Steve McClellan, Broadcasting & Cable, April 2003.

  167 When Barry Meyer, then head of Warner Bros. TV “Tribune’s Chief Is Second to None,” by Steve McClellan, Broadcasting & Cable, April 2003.

  168 was a phenomenon known as “market-driven journalism,” Market Driven Journalism: Let the Citizen Beware? by John H. McManus (London: Sage Publications, 1994).

  169 “Somewhere in the late 1960s . . .” Market Driven Journalism: Let the Citizen Beware? by John H. McManus (London: Sage Publications, 1994).

  171 judged him by the yardstick most CEOs Tribune Company, 2003 Annual Report, February 2004.

  171 “I’m always being accused of looking at everything through . . .” Author’s recollection of his first meeting with Dennis FitzSimons, Tribune Tower, 2000. The author reconstructed details of the meeting, partially from memory and partially from e-mails that the author had sent to others in Tribune Company documenting the meeting.

  172 “One of the issues that caused distress . . .” Author’s interview with David Hiller, Chicago, IL, winter 2008, and winter 2010.

  173 By 2001, Tribune owned twenty-three television stations Tribune Company, 2003 Annual Report, February 2004.

  175 The average reader in Southern California Author’s interview with Leo Wolinsky, Los Angeles, CA, fall 2010, and by telephone, 2008–2010; and Wolinsky’s “Retreat Presentation,” a detailed study of the Los Angeles Times readership and circulation.

  176 “He [FitzSimons] wanted to edit the paper by referendum,” Author’s telephone interview with John Carroll, summer 2009.

  178 Geraldo Rivera, then a Fox News reporter “War news from Rivera seems off the mark,” by David Folkenflik, Baltimore Sun, December 2001. In the story, Rivera acknowledged that he never visited the “hallowed ground” where the battle took place.

  Chapter 12: Buy the Numbers

  181 a letter from a street-smart lawyer Letter from Joseph O. Giaimo to Harold Foley of Utica, New York, dated September 7,2000.

  182 The Colonel’s Tribune had hired the likes The Colonel, The Life and Legend of Robert R. McCormick, by Richard Norton Smith (New York: Houghton Mifflin Company, 1997).

  182 newsstands and even “toss a goon” The Colonel, The Life and Legend of Robert R. McCormick, by Richard Norton Smith (New York: Houghton Mifflin Company, 1997).

  182 When Brumback took on the unions at the STRIKE, The Daily News War and the Future of American Labor, by Richard Vigilante (New York: Simon and Schuster, 1994).

  183 Almost from the day that the Colonel’s niece, Alicia The Colonel, The Life and Legend of Robert R. McCormick, by Richard Norton Smith (New York: Houghton Mifflin Company, 1997).

  183 Tribune’s only tabloid boasted the Letter to advertisers from Patricia A. Burnagiel, vice president, advertising, Newsday, December 1, 2002. Also, attachment to advertising letter entitled, “For Some People, This is the Untold Circulation Story of the New York ADI.” Newsday/NY Newsday is the largest newspaper in the NY ADI.

  183 From all appearances, Sito didn’t Author’s interview with Louis Sito, Greeneville, SC, summer 2009.

  184 A f
ederal prosecutor who investigated Author’s telephone interview with one of the prosecutors in the Newsday investigation who talked only on the condition of confidentiality.

  185 To make sure that Newsday’s circulation increased Crabhouse of Douglaston, Inc. et al. vs. Newsday, Inc. et al., 4th Amended Class Action Complaint, U.S. District Court, Eastern District of New York, September 2006.

  186 Sito and his team also sold bulk subscriptions Author’s interview with Louis Sito, Greeneville, SC, summer 2009. After the Newsday scandal became public, the Audit Bureau of Circulations implemented a wide array of rule changes dealing with bulk circulation and many other problems that surfaced in the Newsday scandal.

  186 Although most people in the American Facts without Opinion, the First Fifty Years of the Audit Bureau of Circulations, by Charles O. Bennett (Chicago: Audit Bureau of Circulations, 1965).

  187 In fact, under ABC rules, newspapers aren’t Audit Bureau of Circulations, Rule Changes and Board Activity from 2004–current, July 2008. The ABC revised its rules after the Newsday scandal became public.

  188 The next time you check into a hotel Author’s telephone interview with Jay Schiller, a former auditor for the Audit Bureau of Circulations, summer 2009, and winter 2010. The author had numerous conversations and e-mail exchanges with Schiller, who shared letters from hotel chains. Schiller also provided ABC audits of the circulation of USA Today.

  188 At Newsday, Sito engaged in far more sinister plots Many details of the circulation scandal were first reported by Robert Kessler and James Madore, Newsday reporters who covered the scandal at their own paper. The alternative weekly, Long Island Press, aggressively covered the Newsday scandal.

  189 In March 1998, an arm of Newsday Details of the March 1998, acquisition came from the author’s interview with Louis Sito, Greeneville, SC, summer 2009, and the amended complaint. In addition, the author interviewed Michael Pouchie in Queens, NY, fall 2010, who told the author of the guns he was carrying when he entered the Newsday circulation facility.

  189 Ed Smith, a Newsday and Hoy circulation consultant United States of America vs. Ed Smith, Information, U.S. District Court, Eastern District of New York, April 2006.

  189 Months before, Sito had noticed how “Dismantling the Language Barrier,” by Tim Porter, American Journalism Review, October/November 2003.

  190 During the first week Hoy was on the market Crabhouse of Douglaston, Inc. et al. vs. Newsday, Inc. et al., 4th Amended Class Action Complaint, U.S. District Court, Eastern District of New York, September 2006. The details of the marketing campaign and the exchanges at the holiday party came from the complaint and were reaffirmed in an interview with Michael Pouchie, Queens, NY, fall 2010.

  191 “When I got outside, there were like fourteen . . .” Author’s interview with Michael Pouchie, Queens, NY, fall 2010.

  191 Two days later when Pouchie showed up at Vreeburg’s Author’s interview with Joseph O. Giaimo, Queens, NY, summer 2010.

  191 “Tell them we’ll see ’em in court . . .” Author’s interview with Louis Sito, Greeneville, SC, summer 2009.

  192 “Look, they’re dumping papers, they’re dumping them . . .” Author’s interview with Joseph O. Giaimo, Queens, NY, summer 2010.

  192 at Newsday caught Timothy Knight off Author’s interview with Timothy Knight, Melville, NY, summer 2010.

  193 Elaine Banar, a hard-nosed federal prosecutor Author’s telephone interview with Elaine Banar, summer 2010.

  194 Fuller had selected a Cuban, Digby Solomon Author’s telephone interview with Digby Solomon, winter 2010.

  195 “He comes in and tells me that the story he told . . .” Author’s interview with Timothy Knight, Mellville, NY, summer 2010.

  196 “I called Banar from the airport to tell her I planned to travel . . .” Author’s interview with Joseph O. Giaimo, Queens, NY, summer 2010.

  197 A federal subpoena from the SEC soon demanded Letter from Tribune lawyer Paul V. Gerlach to Susan E. Curtin, senior counsel, U.S. Securities and Exchange Commission, August 2004. The letter was in response to a subpoena and demands for information from the SEC regarding circulation and ad rates or revenue between Dennis FitzSimons, Jack Fuller, Donald Grenesko, David Hiller, Raymond Jansen, Louis Sito, Robert Brennan, Robert Garcia, and/or Robert Bergin.

  197 the auditors tried to clandestinely observe whether the sales Many details of the circulation scandal were first reported by Robert Kessler and James Madore, Newsday reporters who covered the scandal at their own paper.

  197 There was more than a grain of truth to the “everybody does it” Author’s telephone interview with Elaine Banar, summer 2010.

  197 “But a lot of people aggressively pushed the limits . . .” Author’s interview with Jack Klunder, former director of circulation at the Los Angeles Times, fall 2010; and author’s interview with Louis Sito, Greeneville, SC, summer 2009.

  198 By 2005, when the scandal was unfolding, ABC audits ABC audits of 21 major metro daily newspapers from 2002 through 2008. In all, the author examined ABC audits of 21 major metropolitan daily newspapers—Chicago Tribune, Washington Post, Boston Globe, Miami Herald, San Francisco Chronicle, Denver Post, Rocky Mountain News, Milwaukee Journal Sentinel, Los Angeles Times, Atlanta Journal-Constitution , Philadelphia Daily News, Dallas Morning News, St. Louis Post-Dispatch, Newsday, Florida Times-Union, Chicago Sun-Times, Houston Chronicle, The Commercial Appeal (Memphis), Las Vegas Review Journal, Sacramento Bee, and San Jose Mercury News. The author calculated the total circulation and then deducted home delivery and mail and single-copy sales from the total to get the percentage of junk circulation as a proportion of the total. In general, most of the papers fit the profile of the Los Angeles Times. Times junk circulation went from 7 percent of the total in 2002, before the Newsday scandal broke, to 24 percent in 2006. After the federal investigation of Newsday’s fake circulation picked up steam, the percentage of circulation classified as junk started falling and settled at 9 percent of the total by 2008, as executives pruned the junk from their books. ABC also invoked some rule changes during that period, and advertisers objected to paying for dubious circulation. Not all papers reached as high a proportion of junk. The Chicago Tribune average peaked at 7 percent of the total in 2006, although the proportion was higher on days when advertising was heavier. Some papers, like the Miami Herald and the Las Vegas Review Journal, continued to post large proportions of junk numbers—27 percent and 36 percent, respectively, in 2008. In general, though, the curve for all papers was strikingly similar.

  199 “I had written a memo about what I knew and gave it to . . .” Author’s telephone interview with Digby Solomon, winter 2010.

  200 Knight concluded that Newsday had overstated its circulation Interview with Timothy Knight, corroborated by news releases that the company publicized announcing the results of its investigation.

  Chapter 13: Count Kern

  201 When the Newsday scandal broke Author’s interview with Jack Fuller, Chicago, IL, fall 2008, and winter 2009.

  201 Sito had openly disclosed bogus Author’s interview with Louis Sito, Greeneville, SC, summer 2009. The author also examined letters on Hoy letterhead, written by Sito.

  201 “In going over the papers and records of the case, I decided . . .” Author’s interview with U.S. District Court judge, Jack Weinstein.

  202 “The ABC guys were all paper folks.” Author’s telephone interview with Elaine Banar, summer 2010.

  203 Fuller was incensed when Author’s interview with Jack Fuller, Chicago, IL, fall 2008, and winter 2009.

  204 Fuller announced his resignation “Jack Fuller to retire as head of Tribune Publishing,” by Tara Burghart, AP Worldstream, October 28, 2004.

  205 During Tyner’s first editors’ meeting Author’s interview with Ann Marie Lipinski, Chicago, IL, winter 2010.

  208 Kern was careful to couch his reports “Hurricanes Katrina and Rita, Insights about Tribune’s coverage of the big storms and implications for future national coverage,�
� Tribune Publishing, October 2005. The 22-page report was prepared by Gerould Kern and concluded that Tribune papers should “strive to do more that is extraordinary and differentiating by doing less that is routine and commonly available.” This was just one of numerous reports compiled by Kern.

  210 paid Sammy Sosa to swing a baseball bat In fact, Sosa’s annual salary with the Chicago Cubs in 2003–2004 was $16.8 million each year, far more than the Tribune saved in eliminating any kind of duplication.

  211 Wolinsky started to worry Author’s interview with Leo Wolinsky, Los Angeles, CA, fall 2010, and by telephone, 2008–2010.

  211 phone call he made to Chicago Author’s telephone interview with John Carroll, summer 2009.

  212 “There was just no way that you could out Long Beach . . .” Author’s telephone interview with John Puerner, winter 2010.

  213 Even industry stalwarts like Brumback Author’s interview with Charles Brumback, Sarasota, FL, May 2010, and by telephone, 2008–2010.

  213 “We were discounting deeply . . .” Author’s telephone interview with John Puerner, winter 2010.

  213 After Puerner’s first year in the publisher’s office Audit Bureau of Circulations Report for the Los Angeles Times, 2005.

  213 Under Steven Lee, the marketing executive Author’s interview with Jeffrey Johnson, Los Angeles, CA, winter 2011.

  214 called “Ten for Ten” Author’s interview with David Murphy, Chicago, IL, summer 2008; and author’s interview with Jack Klunder, Los Angeles, fall 2010. As the Tribune executive who assumed responsibility for the advertising and circulation at the Los Angeles Times, Murphy dealt directly with the fallout from the “Ten for Ten” program.

  214 Klunder had run the Los Angeles Times Author’s interview with Jack Klunder, Los Angeles, fall 2010.

  215 Carroll paid a visit to Norm Pearlstine Author’s telephone interview with John Carroll, summer 2009.