Patterico's Pontifications

7/14/2007

L.A. Times to Run Advertisements on Front Page

Filed under: Dog Trainer,General — Patterico @ 2:24 pm



How desperate is the L.A. Times for revenue? This desperate:

Amid a steep decline in revenue, the Los Angeles Times is planning to break with long-standing tradition by selling ads on its front page, Publisher David Hiller said Friday.

When it happens, the newspaper will be the largest metropolitan paper in the country to place ads there.

The paper already runs ads for Democrats on the front page. They might as well get paid for it.

The paper’s editor sees it differently:

Times Editor James O’Shea said he vigorously opposed putting ads on Page One and advised the publisher against doing so. “Front-page ads diminish the newspaper, cheapen the front page and reduce the space devoted to news,” he said Friday. “This would be a huge mistake that will penalize the reader.”

But apparently the paper is in dire straits. The publisher’s memo announcing the change says:

Revenue was down 10% in the second quarter, and cash flow down a whopping 27%, making it one of the worst quarters ever experienced.

Deaths are harder to watch when they’re slow.

(Via L.A. Observed.)

26 Responses to “L.A. Times to Run Advertisements on Front Page”

  1. …and reduce the space devoted to news.

    I would put news in scare quotes.

    The LAT might just pull it out of the fire if they would drop their “news” entirely and stick to sports, home page, food…the parts people actually like and read.

    Patricia (824fa1)

  2. Hey, if you’re going down, go down in flames:
    Hire Ted Rall!

    Another Drew (8018ee)

  3. Quote of the Day, Media Bias Edition…

    It seems the Los Angeles Times is so desperate for revenue — likely attributable to the fact that they’re losing subscribers in droves because of the poor quality of their reporting — they’ve decided to run ads on the front……

    Professor Chaos (49ff2d)

  4. I realize this memo plays nicely into the “dinosaur media” narrative, but I would not take it at face value.

    Next month, there is a vote to take the L.A. Times and its parent company private.

    The financial motivations of Times publisher David Hiller in this deal are unclear.

    If the company goes private, there will be no more publically released financial reports, but, there will at least one more quarterly report coming out soon(it should have already come out, in fact).

    I’d examine it very closely when it does come out.

    alphie (015011)

  5. I think your real problem, alphie, is that the publisher’s admission doesn’t fit the alphie narrative in which, just last month, you denied that the LAT had a revenue problem, telling us smugly: “It’s not that hard to read a financial report.”

    Patterico (2a65a5)

  6. Haha, Patterico,

    I think the saying is “I got no dogs in that hunt.”

    I don’t really care if people wnat to believe that , say, Pajamas Media or the Huffington Post will one day be billion dollar companies.

    But consider that someone is wiling to pay $8+ billion for the Times and Tribune (plus a few other assets) and that they have already paid around $275 million in financial advisors and lawyers fees to get the deal done…and then try to say “newspapers are dying” with a straight face.

    And also consider that in order to supress any rival bids for the Times and Tribune messing up next month’s vote, there is a strong motivation to make the company appear to be worth less than the $34.00 a share they are willing to buy it for.

    alphie (015011)

  7. The SELL A TIMES is getting desrarate becuase their losing readers TOO BAD SMELL A TIMES

    krazy kagu (f24007)

  8. I’m not certain how “Front-page ads diminish the newspaper, cheapen the front page and reduce the space devoted to news,” while advertisements from page two going forward do not.

    In a way, it shows an interesting division between the “news” staff and the people who have to make enough money to keep the news staff employed. If advertising detracts from the news, then the news staff must believe that advertising has no place at all in the newspaper, save as special stand-alone inserts. They face the stark choice of being co-opted by the Evil Corporations, sonderkommando style, or going hungry. :)

    Of course, it also validates our esteemed host’s “power of the jump” theory: iot seems that the editor who made such a claim thinks that there are a lot of people who don’t look beyond the front page.

    Dana (d22c2c)

  9. I haven’t listened to G Gordon Liddy’s radio show for over a decade (lack of opportunity, nothing more), but I remember how, in the 90s, he had his “review and comment on the news” segment between 11:00 and noon. he’d open The Washington Post, and there, on page A-3, apparently almost daily, were advertisements that were pictures of women in their underwear, at which he was shocked, shocked!

    Perhaps Times Editor James O’Shea was so opposed to front-page advertisements because he knew it would include ladies in their Maidenforms. :)

    Dana (d22c2c)

  10. >Deaths are harder to watch when they’re slow.

    Slow or fast this death is easy to watch.

    Arthur (c6d91b)

  11. Alphie – Although you try to talk a good game, your fumbling with financial statement analysis leads me to believe you don’t have a wealth of deal making experience. Have you read the merger proxy for this transaction? I haven’t, but I can make some pretty educated guesses.

    Hiller’s financial motivations? Potentially an immediate payout or vesting of any deferred comp or options. Does he have a retention agreement in the deal as well?

    Alphie, what makes you think Zell has already paid his advisors completions fees? With investment bankers, there may be a downstroke on retention, but the rest will come when the deal is completed. The lawyers will get paid no matter what, but if the deal craters, opportunities exist to negotiate a discounted fee in some instances. Zell also negotiated a breakup fee with the seller that gets triggered in certain instances which would cover his expenses, didn’t he.

    Fairness opinions are typically rendered to protect directors of the selling entity. If Zell were making the purchase through one of his public entities, Alphie, he would be opening himself up to litigation if he made a case that the company was worth significantly less than he was paying for it. Think again on that one.

    Did the merger proxy explicitly say no more financial statements, Alphie? If not, wouldn’t it depend on how the transaction was financed and the number of resulting bonholders and stockholders?

    Let me know if I’m going too fast for you, Wizard of Wall Street.

    daleyrocks (906622)

  12. The paper already runs ads for Democrats on the front page

    I can see it now – The LAT printing Two-for-One Voting Coupons for Democrats.
    “Impress your Friends. Make your Vote Twice as Powerful! It’s EEEEEZ with the LAT Ballot Stuffer.”

    Perfect Sense (b6ec8c)

  13. daley,

    Tou don’t have to be a financial wizrd, you just have to know how to read.

    The fees paid came from a Tribune press release:

    Tribune also gave a final tally of the fees and expenses related to the transaction, including payments to lawyers and financial advisers: $287.2 million.

    http://tinyurl.com/ytjtnl

    And no mention of the L.A. Times slick new website?

    http://losangeles.metromix.com/

    Looks pretty cool…and it has lots of ads.

    alphie (015011)

  14. Alphie – You are absolutely right that it doesn’t take a financial wizard. All it takes is someone willing to do a little work. Take a look a the disclosure from the definitive merger proxy PUNK. It is as I claimed.

    Fees and Expenses

    As set forth under “Special Factors—Background of the Merger,” the Company retained Merrill Lynch and Citi to act as the Company’s co-financial advisors and the Special Committee retained Morgan Stanley to act as its financial advisor. In addition, affiliates of Merrill Lynch and Citi will provide a portion of the financing for the Tender Offer and the Merger, subject to specified conditions. The fees payable to Morgan Stanley for its advisory services and to Merrill Lynch for its advisory and financing services are described under “Special Factors—Opinion of the Special Committee’s Financial Advisor” and “Special Factors—Opinion of the Company’s Financial Advisor,” respectively. Total advisory and financing fees payable to Citi (before syndication costs, capital allocation costs and financing credits) aggregate approximately $68.9 million, of which approximately $35.8 million are contingent on the Merger closing and approximately $33.1 million relate to financing the Tender Offer.

    In addition, JPMorgan and Bank of America and their affiliates have also undertaken to provide financing for the Merger, subject to the terms and conditions of the Second Step Commitment Letter described in “Special Factors—Financing,” and will receive customary fees in connection therewith.

    Merrill Lynch, Citi, JPMorgan and Bank of America were retained to act as the Co-Dealer Managers in connection with the Tender Offer, for which they will receive reasonable and customary compensation. We also have agreed to reimburse the Co-Dealer Managers for reasonable out-of-pocket expenses incurred in connection with the Tender Offer, including reasonable fees and expenses of counsel, and to indemnify the Co-Dealer Managers against certain liabilities in connection with the Tender Offer, including certain liabilities under the federal securities laws. The Co-Dealer Managers and their affiliates have provided, and may in the future provide, various investment banking and other services to us, for which future services we would expect they would receive customary compensation from us. In the ordinary course of business, including in their trading and brokerage operations and in a fiduciary capacity, the Co-Dealer Managers and their affiliates may hold positions, both long and short, for their own accounts and for those of their customers, in our securities.

    We have retained Innisfree M&A Incorporated to act as proxy solicitor. The proxy solicitor will receive reasonable and customary compensation for its services, will be reimbursed by us for reasonable out-of-pocket expenses and will be indemnified against certain liabilities, including certain liabilities under the federal securities laws.

    Whether or not the Merger is completed, in general, all fees and expenses incurred in connection with the Merger will be paid by the party incurring those fees and expenses, except for the reimbursements described below and for the termination fee potentially payable as described under “Other Transaction Agreements—Zell Entity Purchase Agreement.” Fees and expenses incurred or to

    66
    Fees and Expenses

    As set forth under “Special Factors—Background of the Merger,” the Company retained Merrill Lynch and Citi to act as the Company’s co-financial advisors and the Special Committee retained Morgan Stanley to act as its financial advisor. In addition, affiliates of Merrill Lynch and Citi will provide a portion of the financing for the Tender Offer and the Merger, subject to specified conditions. The fees payable to Morgan Stanley for its advisory services and to Merrill Lynch for its advisory and financing services are described under “Special Factors—Opinion of the Special Committee’s Financial Advisor” and “Special Factors—Opinion of the Company’s Financial Advisor,” respectively. Total advisory and financing fees payable to Citi (before syndication costs, capital allocation costs and financing credits) aggregate approximately $68.9 million, of which approximately $35.8 million are contingent on the Merger closing and approximately $33.1 million relate to financing the Tender Offer.

    In addition, JPMorgan and Bank of America and their affiliates have also undertaken to provide financing for the Merger, subject to the terms and conditions of the Second Step Commitment Letter described in “Special Factors—Financing,” and will receive customary fees in connection therewith.

    Merrill Lynch, Citi, JPMorgan and Bank of America were retained to act as the Co-Dealer Managers in connection with the Tender Offer, for which they will receive reasonable and customary compensation. We also have agreed to reimburse the Co-Dealer Managers for reasonable out-of-pocket expenses incurred in connection with the Tender Offer, including reasonable fees and expenses of counsel, and to indemnify the Co-Dealer Managers against certain liabilities in connection with the Tender Offer, including certain liabilities under the federal securities laws. The Co-Dealer Managers and their affiliates have provided, and may in the future provide, various investment banking and other services to us, for which future services we would expect they would receive customary compensation from us. In the ordinary course of business, including in their trading and brokerage operations and in a fiduciary capacity, the Co-Dealer Managers and their affiliates may hold positions, both long and short, for their own accounts and for those of their customers, in our securities.

    We have retained Innisfree M&A Incorporated to act as proxy solicitor. The proxy solicitor will receive reasonable and customary compensation for its services, will be reimbursed by us for reasonable out-of-pocket expenses and will be indemnified against certain liabilities, including certain liabilities under the federal securities laws.

    Whether or not the Merger is completed, in general, all fees and expenses incurred in connection with the Merger will be paid by the party incurring those fees and expenses, except for the reimbursements described below and for the termination fee potentially payable as described under “Other Transaction Agreements—Zell Entity Purchase Agreement.” Fees and expenses incurred or to be incurred by the Company in connection with the Leveraged ESOP Transactions are estimated at this time to be as follows:

    Description

    ——————————————————————————–
    Amount
    ——————————————————————————–

    (In thousands)

    Legal $ 14,000
    Financial Advisors $ 32,000
    Debt Issuance Costs $ 230,000
    Accounting $ 460
    Printing $ 550
    SEC Filing Fees $ 310
    Proxy Solicitation, Information Agent, Paying Agent and Mailing $ 525
    Reimbursement of Zell Entity Fees and Expenses(1) $ 5,000
    Reimbursement of ESOP Fees and Expenses(2) $ 3,500
    Miscellaneous $ 825

    ——————————————————————————–

    Total $ 287,170

    ——————————————————————————–

    ——————————————————————————–

    (1)
    Pursuant to the Zell Entity Purchase Agreement, the Company reimbursed the Zell Entity for $2.5 million of legal and other advisory fees and expenses upon consummation of the Step One Purchase Transaction and agreed to reimburse the Zell Entity for up to an additional $2.5 million of unreimbursed expenses following consummation of the Step Two Purchase Transaction. |

    (2)
    Pursuant to the ESOP Purchase Agreement, the Company has agreed to pay the reasonable expenses of the ESOP and the ESOP trustee, including legal and financial advisory fees, incurred in connection with the Leveraged ESOP Transactions.

    daleyrocks (906622)

  15. Sorry for the duplication in text.

    daleyrocks (906622)

  16. daley,

    I hate to point this out, but you just proved my point for me:

    Press releases and financial reports can say two very different things.

    The L.A. Times’ cool new website even has blog, btw:

    http://blogs-losangeles.metromix.com/vmix_hosted_apps/

    alphie (015011)

  17. Alphie – I don’t see your press release. My cut and paste job is from an SEC document and press releases are also subject to SEC rules. I doubt I proved any points except your ability to read and understand what is put in front of you. Try again, numb nuts. Why not excerpt the part of the press release on which you are hanging your hat to prove your point.

    Also, is that all you got? You were blustering about a bunch of other crap too. Have you forgotten about that?

    daleyrocks (906622)

  18. In this town the Calendar section is the front page. Extolling Eminem’s deep artistry or Desperate Housewives’ latest plot twist serves as real news.

    Zell has said he doesn’t care to get involved in the editorial aspect of the paper. Can’t guess why a change is in place before the big guy takes over. Client ads on the front page may not bother Zell, I suspect. Maybe we’ll see a few Harley ads next to pics of Bush and Villaraigosa.

    Vermont Neighbor (95b069)

  19. Of course you didn’t see it daley, it’s only the first link in the post right above yours.

    This one:

    http://tinyurl.com/ytjtnl

    As for the other “bluster” are you trying to deny Sam Zell is willing to pay $8+ billion for the Tribune Corp?

    alphie (015011)

  20. Nice try Alphie. I tried your url earlier. I takes you to the registration require Chicago Tribune site, where the url is useless once you are in. Why not identify the date of the press release or paste the language? Otherwise it seems like you’re full of shit as usual.

    Here’s your other bluster Alphie, in case you want to keep forgetting. What do you say today about your points, wizard?

    “The financial motivations of Times publisher David Hiller in this deal are unclear.

    If the company goes private, there will be no more publically released financial reports, but, there will at least one more quarterly report coming out soon(it should have already come out, in fact).

    And also consider that in order to supress any rival bids for the Times and Tribune messing up next month’s vote, there is a strong motivation to make the company appear to be worth less than the $34.00 a share they are willing to buy it for.”

    daleyrocks (906622)

  21. I did post the relevant language from the press release in the post above that you seem to be having such a hard time seeing, daley:

    Tribune also gave a final tally of the fees and expenses related to the transaction, including payments to lawyers and financial advisers: $287.2 million.

    alphie (015011)

  22. It’s amusing to see the LAT vandalize itself and call it progress (classic liberal wishful thinking, I guess). When the end finally comes, it will be a relief to everyone.

    Jack (fb6ec3)

  23. Weekends only $15 and that includes a ten dollar Starbucks card. Makes me weak… I do fight temptation on this.

    Vermont Neighbor (95b069)

  24. Alphie – What I remember you said and what you keep dodging is the following:

    “But consider that someone is wiling to pay $8+ billion for the Times and Tribune (plus a few other assets) and that they have already paid around $275 million in financial advisors and lawyers fees to get the deal done…and then try to say “newspapers are dying” with a straight face.”

    Are you still sticking to you obviously incorrect point that the fees have already been paid even though the deal has not been consummated?

    Are you still ignoring the other bullshit points you raised in your sniping by changing the subject.

    Your act is tiresome. If you wanted to stick to commenting on things you knew about, I’m sure you could probably find plenty of blogs about self abuse.

    daleyrocks (906622)

  25. Alphie, Sam Zell is most assuredly NOT putting $8.3 billion into buying the Trib company:

    “Zell himself is supporting the deal with a $315 million investment, and shareholders will receive their consideration through a two-stage transaction.”
    “In the first stage, Tribune is to raise $7 billion of new debt, of which $4.2 billion is to be used to complete the tender offer and the remaining $2.8 billion being applied to a refinancing of existing bank-credit facilities.
    In the second stage, Tribune is to raise an additional $4.2 billion of debt, which would be used to buy all remaining outstanding shares of the company”

    http://www.marketwatch.com/news/story/tribune-co-accepts-sam-zells/story.aspx?guid=%7B1FE1DB59-346D-4778-855F-09BCA241D99F%7D

    Brad S (12c864)

  26. Many people are sick of reading about the non stop garbage that the LAT calls war reporting. This country is at war and many of us want to hear about the victories and successes. The LAT does not want to admit it because it is contrary to their agenda. The LAT desearves to die a slow death

    cram noskroy (9c177b)


Powered by WordPress.

Page loaded in: 0.2436 secs.