Worst of Times

Word swept quickly around the newsroom of the Los Angeles Times by interoffice e-mail. Otis Chandler, the former publisher who shepherded the paper to nine Pulitzer Prizes, was back--in spirit if not in fact. Chandler, who retired as publisher in 1980, sent his message directly to reporters, to the dismay of the newspaper's management. Read aloud as more than 100 staff members gathered in the newsroom, his words were stunningly direct. His successors, he said, had been "unbelievably stupid" and caused "the most serious single threat to the future" of the paper his family had bought in 1882. People gasped in surprise, then applauded as the shock wore off. Said a veteran reporter: "It was like a thunderbolt from Zeus."

What prompted Chandler's outburst was a special issue of the paper's Sunday magazine on Oct. 10, dedicated to the new Staples Center sports arena in downtown L.A., home to the Lakers, Clippers and Kings. Such special issues are common these days, as newspapers and magazines look for ways to attract advertisers, and it was a financial windfall for the Times, generating a record $2 million in ad revenue. But as one of the arena's 10 "founding partners," the paper had agreed to share the issue's ad revenue with the Staples Center without telling its reporters or readers about the fiscal arrangement. To give the subject of the paper's journalism a share in revenues seemed like a dangerous compromise of the paper's objectivity. Reporter Jim Newton, whose beat includes Mayor Richard Riordan's office, explains in layman's terms, "If I had a financial arrangement with Mayor Riordan and wrote about him, I'd be fired. It's a conflict of interest."

In response to a torrent of protest from reporters and editors, publisher Kathryn Downing, 46, who stepped into the job last June, made an extraordinary--some called it "abject"--apology. After taking questions at a two-hour staff meeting on Oct. 28, she admitted that she and her staff had failed to understand the ethics involved. "It was the angriest, most confrontational meeting I've ever seen at the paper in my 31 years," says David Shaw, the paper's media reporter. "People felt betrayed, embarrassed, ashamed, angry. What happened was wrong. It's Journalism 101." Shaw will get to draw lessons in print: he has been assigned to write an investigative story for the paper on the episode.

Downing, meanwhile, canceled all future revenue-sharing deals with Staples, promised to review all contracts with advertisers, and ordered up "awareness training" for the ad side. Yet in an interview with TIME last Thursday, some defensiveness seemed to be creeping back. She cited a recent Boston Globe report pointing out that promotional ties and revenue sharing are becoming more widespread at newspapers. "It makes me feel better to know it's a common industry practice," says Downing. "What I did was unfortunate. It was a mistake. I feel badly about the cloud it has put--for a little while--over the L.A. Times, but I feel great that the editorial integrity of the issue is intact."