The Deal from Hell (17 page)

One of the first things Madigan did as publisher was to get rid of people loyal to Jim Squires. A year into settling into the publisher's office, Madigan accepted Squires' offer to step down. In his place, he installed Jack Fuller, a Yale-educated lawyer, novelist, editorialist, and second-generation Tribune loyalist who couldn't have been more different from Squires.

Professorial in demeanor, Fuller wore a beret to work, spoke softly, and looked like he'd be more at home with a glass of sherry in a
university club than with a shot at the Billy Goat, the Chicago newspapermen's watering hole. He quoted Voltaire when he talked to reporters. Madigan jokingly referred to Fuller as “the professor,” and newsroom scuttlebutt painted Fuller as “too intellectual” or “brainy” to be editor of the brawny
Chicago Tribune
. But Fuller's professorial pedigree obscured his ambition and skill. Together, Fuller and Madigan formed a team that was to make the company that wasn't “big enough” much, much bigger.

Soon after he was named editor, Fuller brought me back to Chicago from Washington to run the paper's foreign and national news operation, a great job that put me in charge of the main news section of the
Tribune
, which included most of the foreign and national news. I was thrilled. I'd had a great run in Washington where I'd won some honors and accolades, and where my coverage of the savings and loan scandal had landed me a book contract. I'd also had a couple of spats with my friend Nick Horrock, whom Squires had installed as the Washington bureau chief, and I decided it was time to move on. Putting me in charge of foreign and national news gave me a major voice in how the big news stories of the day would be played, a bigger staff, and more influence than the Washington bureau chief.

As head of the
Tribune
's eighteen foreign and national news bureaus and more than forty correspondents, I presided over the highly visible network that Squires had built, one that had the potential to turn heads in the world of journalism, where stature was measured by heft. More important, I gained control of the news pages where stories from the bureaus would run, including those from Washington. It was a heady experience, until I learned the truth about my little empire.

Years later, as editor of the
Los Angeles Times
, I would see how a professional foreign and national news staff should be organized. Working within Tribune confines and Brumback's relentless push for the higher profits that the company promised Wall Street, Squires had built the bureaus but not the support system needed to service the growing cadre of foreign and national news reporters. If anything, he eliminated the infrastructure of supporting editors to finance the
paper's expansion, creating a team of star hitters and pitchers, while skimping on hitting and pitching coaches. From an accountant's perspective, the staff looked incredibly productive, grinding out an admirable foreign and national news report with far fewer people or—as Brumback called them—FTEs (full-time equivalents) than papers like the
New York Times
or the
Los Angeles Times
. But in reality, the system wasn't really that productive. Instead of spending our time crafting a journalistic strategy to capitalize on an incredible stable of talent to distinguish
Tribune
content from other papers and wire services, overburdened editors scrambled to edit stories rolling in from correspondents who operated without adequate guidance and feedback from the editors closest to the readers. When journalists stationed in faraway places can't brainstorm with editors to develop customized stories, they fail to create journalistic value in their stories and fall victim to a sense of sameness. Although reporters may generate high story counts with staff bylines, economic downturns make them seem like luxuries that can be replaced by cheaper wire services (ones that pay their reporters less for stories on the same subjects).

Despite its limitations, the
Tribune
's foreign and national staff worked hard for me. But the anemic support system made everyone feel like copy processors instead of editors. We always had too much to do, and someone would inevitably come along and ask us to do more. Early in my tenure, Fuller summoned me to his office to ask me to stretch myself a little thinner, to “educate” Madigan about what journalists did. Instead of waiting for the economy to tank and allow the budget cutters to diminish expensive foreign and national staff, Fuller wisely made a preemptive move by building support with friends in high places and promoting the value of
Tribune
journalism.

My new student knew as much about the inner workings of my newsroom as I knew about the machinations of his boardroom. At one point, Squires had banned Madigan from even entering the fourth floor, arguing that his efforts to get obituaries written about friends and relatives and his contacts with correspondents stationed in countries he was about to visit amounted to interference in the editorial process,
a penetration of the wall. “All he ever cared about was his seat on the dais,” Squires later recalled. “He was always a power guy.”

But I saw a complex, contradictory man, someone who seemed dreadfully risk adverse and seemed reliably predictable, until he did something totally out of character. Madigan could be amusing, blunt, and irreverent in private, but cautious and restrained in a crowd. He would complain about stories in the paper, but encourage editors to stand up to him because he knew editors were supposed to defend their reporters. Unlike Brumback, he rarely insulted subordinates in public; he delivered his harsh words behind closed doors with a silent, steelyeyed glare as cold as Lake Michigan. He seemed genuinely interested in what journalists did and liked the irreverent newsroom more than the reverential Tribune corporate offices. Eager to learn about the political, social, and economic issues that journalists encountered on the job, he nevertheless labored under an insecure, almost irrational fear of looking foolish in public. When consul generals representing foreign countries in Chicago would call on the new publisher to talk about issues, he would summon me, or one of my staff, to attend, with the understanding that we would intervene if the conversation wandered onto unfamiliar turf. When Madigan wanted a session to end, he would speak with his eyes, giving me that “get him out of here” look, and I would show the visitor the door.

Famed newspaper publishers like Joseph Pulitzer and William Randolph Hearst got their hands dirty using garish headlines, fake interviews, and lavish photo spreads to win readers in the fabled New York City newspaper wars known as “yellow journalism.” But Madigan and most publishers of his era were as far removed from journalism as Chicago is from New York. The fine print that really interested Madigan and his contemporaries rested in a stock prospectus. The financial guys, lawyers and MBAs from the nation's elite business schools, didn't get ink on their fingers. The “journalism” they practiced wasn't yellow, it was green, the color of money.

Across America, most papers had been gobbled up by big media companies like Tribune Company. For better or worse, the industry
had started another wave of consolidation. The conventional wisdom was to buy or be bought. Most papers had started to see their share of advertising (particularly classified advertising) slip as competitors penetrated their markets. Businesses, meanwhile, had discovered they could target their commercial messages much more effectively through direct mail. Newspaper subscriptions had for the most part held up, but single copies of the paper sold on newsstands had started a permanent decline in the 1990s. Meanwhile, the Internet had emerged on the scene as a threat, not only to the business side but also to editorial departments forced to compete with a new breed of news more concerned with speed and less interested in journalistic accuracy. Newspapers were becoming the medium of choice for older readers—a group that was largely anathema to advertisers. Far more so than their predecessors, executives like Madigan faced a new host of threats to the bread and butter of newspaper journalism.

A controlling person who insisted on punctuality, Madigan prized stability and discretion and, like Willes, actually seemed amazed that anyone would repeat something from a private business meeting to one of his reporters. Like the Colonel, he seemed to think he belonged to a privileged society that was exempt from the rules that govern the rest of us; he loathed waiting in line for anything, and he loved to travel the world, rubbing shoulders with world leaders, particularly if he was in the Tribune's Falcon jet. Madigan would come to know by name almost all of the seven hundred or so reporters in the newsroom, and he sympathized with their frustration at being the Rodney Dangerfields of journalism—toiling as they did at a paper that didn't get the respect bestowed on the newspapers on the coasts.

As they rose through the ranks, Fuller and Madigan acted as if they didn't care about the slights. When thinking about potentially controversial policies at the
Tribune
, Fuller would often half jokingly wonder how a move would play with “the gods of journalism,” a reference to East Coast editors like Gene Roberts, the
Philadelphia Inquirer
editor famed for long-form investigative reporting. But in truth, we all resented the insolence toward our paper. When Madigan traveled
to Washington to attend the fabled Gridiron dinner just after he'd been named publisher, he couldn't get over how journalists and dignitaries fawned over Arthur Sulzberger and Katharine Graham in the drawing-room parties that preceded the dinner. Riding the elevator together after the show, Madigan expressed his frustration to
Tribune
bureau chief Nick Horrock, wondering aloud why Sulzberger and Graham got so much attention while he got so little. “I explained to him that they came from famed newspaper families and were not just people who ran corporations. He took it pretty well,” Horrock recalled. When asked about reasons for the shabby treatment years later, Madigan would say, “I think it's a coast issue. I think New York and Los Angeles look down on Chicago. We're not as good as they are. I think it is just a feeling of superiority.”

But Wall Street, for one, was not giving Tribune the cold shoulder, not in the least. By the early 1990s, Brumback's pressure on publishers to increase their contributions to Tribune Company's bottom line had paid off with double-digit cash flow increases. The company's successful earnings allowed Tribune to capitalize on opportunities. Never mind the growth of the Internet, cable television had robustly expanded its reach, and the federal government had started relaxing regulations that governed who could own broadcast properties, igniting a public backlash that both the government and Tribune Company would dramatically underestimate. But Brumback, bolstered by his belief in technology, put the company squarely in the game. He started CLTV, Chicago's twenty-four-hour local news cable channel, acquired several local television stations across the country, and placed his $5 million bet on America Online. Brumback scaled back the Tribune's publishing division, divesting smaller newspaper properties so he could focus on his most profitable papers in Chicago and Florida.

He also started thinking about the future. Brumback realized before most other newspaper executives how the computer and its attendant technology would transform the newspaper industry. After the Tribune invested in America Online, in the early 1990s Brumback created Chicago Online, putting the Tribune Company at the vanguard
of media and the Internet. He ordered
Chicago Tribune
content to be placed on the Internet and charged anyone for access to the stories unless they subscribed to the newspaper. He also tried to spread the gospel to the entire industry by promoting something called the New Century Network, or NCN, a consortium of the nine-largest newspaper groups in America, to pool their content so they could “monetize it,” or make money.

Brumback had zeroed in on what would become a devastating problem for newspapers as the Internet began to thrive. “Charlie had a good idea but it wasn't the right answer,” said James Cutie, a onetime head of online news for the
New York Times
and a NCN board member. “The group was too large. It was composed of nine newspaper companies all sitting around the table with the same skills. If someone had had the balls to charge for our digital copy, it would be a whole different ballgame today.” Brumback later told me that he had also encountered opposition from the
Chicago Tribune
's circulation department, which viewed the new technology as a threat to its ability to attract print readers.

Within three years, the NCN folded, an entrepreneurial dream plagued by differing philosophies, internecine warfare, big companies, and even bigger egos. “Charlie was trying to get Silicon Valley to invest in it, and some guy from Kleiner Perkins [Caufield & Byers] wanted to invest $5 million,” said Cutie. “Can you imagine getting all of that premium content for $5 million. We had this big meeting of all the major newspaper companies to vote on whether to go ahead. I think it was in Chicago because I thought it was like something out of the
Godfather
when the heads of all the crime families came there to vote about going into the drug business.” The vote was five to four against joining Kleiner Perkins, a setback that not only killed the NCN but in retrospect was a blow to the industry.

Instead of charging customers to recoup their cost of creating content, newspaper companies put the content on line for free, hoping that a bigger audience would lure enough online ad dollars to pay their costs and boost profits. It was a bad bet. Some readers quit paying for their
papers because they could get the content for free online. The technology allowed advertisers to see exactly how many people looked at their ads, intelligence that led them to bid down the price of all advertising, print and online. The result: a huge problem for the media grappling with a new generation of readers reared in the Internet age, one that expects fast, free content on computer screens, cellphones, and iPads.