BOOK REVIEW: 'The Deal from Hell': Wall Street, Lack of Investment, Arrogance Caused Decline of American Newspapers

Reviewed by David M. Kinchen

BOOK REVIEW: 'The Deal from Hell': Wall Street, Lack of Investment, Arrogance Caused Decline of American Newspapers

In his new book about the the Tribune-Times Mirror merger, "The Deal from Hell: How Moguls and Wall Street Plundered Great American Newspapers" (PublicAffairs, 416 pages, notes, index, $28.99) James O'Shea tells us virtually everything about the decline and fall of great American newspapers -- except why are they so darned skinny.

I'm talking page widths that were 15 inches or more, now smaller than tabloids at 12 inches wide or even smaller. Actually O'Shea, a veteran newsman who was present at the creation of the largest  newspaper merger in history, the 2000 marriage of the Tribune Company of Chicago and Los Angeles-based Times Mirror, does allude to the reason without mentioning page width by name. It was cost-cutting by the same bean counters that gutted newspapers and contributed to their decline. 

A narrower page means less newsprint, although the super-skinny Los Angeles Times, Chicago TribuneNew York TimesWall Street Journal and most other newspapers look ridiculous to me. After all, my first newspaper job was at The Hammond (IN) Times --  in 1966, five years before O'Shea started reporting at the Des Moines Register. We geezers -- O'Shea and I --  remember dealing with wide newspapers that forced us to learn how to fold a paper to make it handier to read. The few millennials who pick up a newspaper out of curiosity won't have any problems handling the skinny-mini papers of today.
James O'Shea
James O'Shea

Today's standard is a 48 inch web, resulting in 12 inch pages because four printing plates side by side are printed at one time on the roll, which looks like a gigantic roll of toilet paper. (Maybe that's an apt comparison because virtually every newspaper is in the financial crapper these days, as O'Shea so graphically illustrates in his well-written tome.) 

The merger, to many, is a classic demonstration that in the world of business, bigger isn't always better: After the Tribune Company acquired Times Mirror Corporation, it comprised the most powerful collection of newspapers in the world. Add in the television stations that Tribune owned and it boggles the mind how such a cash cow could run dry and stop delivering profits north of 20 percent. 

O'Shea, who spent most of his newspaper career at the Tribune after breaking in at the journalistically outstanding Des Moines newspaper,  takes us behind the scenes of the decisions that led to disaster in boardrooms and newsrooms from coast to coast, based on interviews with key players, court testimony, and sworn depositions. 

He also makes the point that when he started at the Register, it was owned by the distinguished Cowles family; today it's owned by Gannett, publishers of USA Today, which has purchased many once highly respected family-owned newspapers and turned them into bland McPapers. There are few family owned metropolitan newspapers today and many people believe the nation is poorer because of chain ownership of the remaining papers. 

O'Shea is realistic enough to realize that new technology and the breaking up of advertising monopolies that favored newspapers -- especially morning ones like The L.A. Times and the Chicago Tribune changed everything. Classified advertising was never the same after craigslist; always- on-the- go  members of the millennial generation, as well as older boomers and even older sandwich generation folks turned to the Internet for their news fix. They don't have time to read newspapers, addicted at they are to their smart phones. Now tablets like the iPad and Androids like my Cruz Tablet  are making the laptop computer obsolescent.

O'Shea, while at the Tribune, recognized changing tastes in newspapers: In partial response to the extremely successful Chicago Reader, a fat, ad-packed free alternative weekly that had a very desirable demographic, he  helped the Chicago Tribune develop RedEye, originally a weekday, quick-read newspaper distributed free in the Chicago area and now also available online. RedEye delivers a mix of news, sports, entertainment and gossip to the elusive, highly desirable 18-to-34-year-old demographic, and has averaged 35% per year revenue growth since its debut in 2002.
In November, 2006, O'Shea was named executive vice president and editor of the Los Angeles Times, the largest daily metropolitan newspaper in the nation. O'Shea helped covert the Times into an interactive news organization and achieved numerous other accomplishments. The paper reversed its daily circulation decline and the fortunes of its Sunday magazine under O'Shea's tenure as editor. He left the Times in January, 2008, delivering a farewell address (see link below)  in the newsroom to make sure the staff knew he was being forced out by publisher David Hiller. He was the third editor in three years, replaced by Russ Stanton, who is still the editor of the Times.

Previously, he had served as managing editor of the Chicago Tribune since February 2001.  From 1995 to early 2001, he was deputy managing editor for news and supervised the Tribune news divisions.  He also served as the newspaper's associate managing editor for foreign and national news. 

O'Shea joined the Chicago Tribune in 1979 from the Des Moines Register, where he had been a reporter, editor and Washington, D.C. correspondent.  Once in Chicago, he worked on various investigative projects for the Tribune's Financial News Desk.  He joined the Tribune's Washington bureau in 1982, where he covered both national budget policy and national security.  Two years later, he was named national security correspondent, covering the Pentagon.  In 1988, he became the newspaper's senior economics correspondent.

Personalities, including the blunt real estate billionaire Sam Zell, who bought the Tribune Company in 2006, are dealt with frankly by O'Shea. He doesn't pull any punches writing about Dennis J. FitzSimons, Randy Michaels, Jack Fuller, David Hiller and many others. I'm glad that O'Shea didn't take the easy way out and demonize Zell, who apparently genuinely believed buying the Tribune Company was a wise financial transaction.

 Born in Chicago in 1941, Zell was a genius when it came to income property, building up Equity Office Properties into one of the nation's largest commercial real estate firms. He had some experience with media properties, but none with newspapers. He later called his 2007  acquisition of the Tribune Company "the deal from hell," giving O'Shea a title for his book. 

Under the burden of the debt incurred as part of Zell's leveraged buyout, the Tribune Co. filed for chapter 11 bankruptcy reorganization in December 2008.

In "The Deal from Hell," O'Shea makes the case that the Internet and alternative media outlets and the subsequent decline in circulation of daily newspapers are not the root cause of the decline and -- in many cities -- the disappearance of metro dailies. The primary cause is the greed, incompetence, corruption (one example he cites is the Newsday circulation numbers scandal; Newsday is the Tribune Co.'s tabloid that covers the 1,400 square mile Long Island, NY) and downright arrogance of people who put their interests ahead of the public's.

 A different point of view on "legacy" newspapers from that of O'Shea and others who bemoan the decline of print newspapers is voiced in "The Declaration of Independents" by Nick Gillespie and Matt Welch, another title just published (on-sale date June 28, look for my upcoming review) by PublicAffairs. In Chapter 8 of their book, titled "We the Media," the two libertarians -- past and present editors of Reason magazine -- say preserving "legacy" media like the Tribune Co. is an exercise in  futility. Matt Drudge of The Drudge Report, Julian Assange of WikiLeaks, Arianna Huffington of Huffington Post, and similar online outlets are the wave of the future, Gillespie and Welch say. They add that previous attempts to rescue newspapers, like that of President Richard Nixon and his failing newspaper act in the 1970s,  failed to save any newspaper.

As a veteran of 34 years at five daily newspapers (including more than 14 years at the Los Angeles Times from 1976 to 1990) , I can sympathize with O'Shea's cri de coeur about the future of the remaining newspapers. I'm also a photographic hobbyist who loves his vintage Nikons, Leicas, Rolleiflexes and other film cameras, but recognizes that digital cameras are what's happening today and owns and uses high-end and consumer digital cameras. Libertarians Gillespie and Welch also deal with Eastman Kodak's one-time monopoly of the photography business. The Rochester, NY -based iconic "Big Yellow" is marketing digital products and excellent computer printers (one of which I recently purchased) and is rumored to discontinue film manufacture next year.

About the author Chicago resident James O'Shea, once managing editor of the Chicago Tribune,  was  editor of the Los Angeles Times for 14 months in 2006 through 2008. He is now CEO and editor-in-chief of the Chicago News Cooperative.   News staff under O'Shea's supervision won six Pulitzer prizes and achieved the status of Pulitzer finalist more than two dozen times. O'Shea began his journalism career in 1968 as a U.S. Army correspondent in Korea. In addition to "The Deal from Hell", he is the author of two books, "The Daisy Chain," a book about the savings and loan crisis of the 1980s, and "Dangerous Company," an examination of the role that management consultants play in corporate decision making, a book that he co-authored with Chicago Tribune staffer Charles Madigan. O'Shea holds an undergraduate degree in English and philosophy and a master's degree in journalism, both from the University of Missouri. He was born in East St. Louis, Illinois and grew up in St. Louis, Missouri.

* * * Link to O'Shea's departing remarks  in LA times newsroom Jan. 21, 2008:

Link to O'Shea's article on the Chicago News Cooperative in the Summer 2011 Nieman Reports:
Book website:; publisher's website: