The Deal from Hell: How Moguls and Wall Street Plundered Great American Newspapers

Image of The Deal from Hell: How Moguls and Wall Street Plundered Great American Newspapers
Author(s): 
Release Date: 
January 1, 2011
Publisher/Imprint: 
PublicAffairs
Pages: 
416
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“James O’Shea has written an important book for anyone concerned about the future of journalism, its uncertain relationship to modern democratic societies, and the eternal balance between freedom and responsibility—assuming that we can turn off our iPods, iPads, and Netbooks long enough to read Deal from Hell from start to finish.”

James O’Shea begins The Deal From Hell by reminding readers that he is primarily a reporter. But his memoir suggests something more: the sharp-eyed editor for two of the nation’s great newspapers, the Chicago Tribune and the Los Angeles Times.

The papers merged in March 2000, creating the new Tribune Company—a powerhouse rivaling the Gannett and Knight-Ridder media conglomerates. In a drearily familiar plotline, a marriage accompanied by bells and banner headlines turned out to be a nonstop clash of cultures, egos, and agendas. Jim O’Shea was an eyewitness—and he got fired, too.

The book’s subtitle declares that the glittering new media empire eventually morphed into a target for fat-cat moguls and Wall Street sharks. Like vultures drawn to the spoil, legions of lawyers accompanied all interested parties (no disrespect intended to the birds). In the end, the bankers got $283 million—as the author notes, enough to run both the Times and Tribune newsrooms for a year. Top newspaper executives walked away with salary and bonus packages as high as $41 million. The accompanying sub-themes occurred at the lower levels as well: employee layoffs and cutbacks as well as constant rear-guard actions to maintain slipping journalistic standards. Sound familiar?

In his epilogue, Mr. O’Shea asks precisely the right question, noting that it is not about the survival of newspapers: “. . . the real question is whether we will still have journalism—not aggregated content gathered to foster ad sales—but hard-hitting, time-consuming investigative and analytical reporting about the major issues of the day?”

Naval captains in the mid-19th century must have had similar reservations as their familiar sail-driven men-of-war were transformed into dreadnoughts by the cascading revolutions in steel, steam, and gunnery—all in fewer than 50 years.

Newsmen of Mr. O’Shea’s era similarly witnessed oncoming revolutions in print and production technologies long before broadcast and cable television broke their news monopoly. Even as those changes multiplied, the pairing of the computer and the Internet turned the Tribune-Times nuptials into an irrelevancy. Not that anyone noticed. As the initial merger talks began, the author points out how local entrepreneurs were already at work creating the Drudge Report, Craigslist, and “a start-up company . . . eventually called Google.” Whatever happened to those guys?

Networks of the Second Information Revolution routinely devour inefficient hierarchies—even those of the fourth estate. The reporter-turned-editor became “an adept budgetary surgeon (even though) my patient never got any better.” But James O’Shea also enjoyed perks, power, and position. He recalls exclusive breakfasts at the Intercontinental and lunches at posh Malibu bistros: Had no one ever heard of IHOP or Chick-Fil-A?

But the author’s most damning indictment of embedded inefficiency and corruption is his chapter on “Buy the Numbers.” Some newspapers (particularly Newsday) concealed their steadily declining readership by simply padding circulation figures—all while deceiving advertisers, readers, and (maybe) management. As nagging discrepancies grew, the truth became too big to lie about. While executives narrowly escaped indictment, “. . . the scandal cost Newsday $100 million in fines and ad rebates.”

Another corrupting influence in Mr. O’Shea’s narrative was Sam Zell, a Chicago gazillionaire. Zell was so adept at making deals for distressed companies that “the grave dancer” emerged as the unlikeliest of white knights in a “leveraged re-capitalization” scheme. Flush with enough cash to salvage the Tribune Company, Zell is portrayed as thoroughly repugnant in every other way.

Worst of all was an unforgettable dinner scene in which Zell bombarded former Secretary of State Warren Christopher with disrespect and F-bombs. The venerable Christopher’s sin: Suggesting that the Los Angeles Times should pay particular attention to Asian developments.

When the deal closed, Zell presided over the pillage of the Tribune Company much as the Visigoths sacked Rome. Chief debaucher in “Zell’s Hell” was Randy Michaels, a former radio engineer and “shock jock.” Shortly after taking charge of Tribune operations, Michaels installed a sign in the lobby: “A customer is the most important visitor on our premises.” Normal enough except that the quote was, with inadvertent hilarity, attributed to Mahatma Gandhi. A succession of similar gaffes ended only after Michaels was discovered in flagrante with a young secretary. (Author O’Shea doesn’t speculate on whether Michaels might next consider running for Congress.)

But what the author passionately points out is that such boorish behavior by media executives exclusively focused on the bottom-line is a form of treason against the public interest. It directly contradicts, “. . . what journalists are supposed to do: Give voice to those without a megaphone (and) shine a light on society’s darkest corners where injustice or corruption often lurk in the shadows.”

This book is not flawless. There is deliberate score-settling, occasional flights of self-righteousness, and a daunting array of characters; a scorecard would have been handy to distinguish Chicago Tribune editor Ann Marie Lipinski from Los Angeles Times city editor Leo Wolinsky.

But James O’Shea has written an important book for anyone concerned about the future of journalism, its uncertain relationship to modern democratic societies, and the eternal balance between freedom and responsibility—assuming that we can turn off our iPods, iPads, and Netbooks long enough to read Deal from Hell from start to finish.