Top U.S. paper feels the pinch

Press, 8 September 1982, Page 13

Top U.S. paper feels the pinch

NZPA New York After ‘years of uninterrupted growth, the “Los Angeles Times” is feeling the effects of the recession? With revenues down because of reduced advertising income, the newspaper has frozen hiring, cut back its weekly fashion and consumer sections, and has ordered less spending for travel, entertainment, promotions, and overtime. Cost-of-living raises, normally announced in December, are in jeopardy. The recession has been hard on a number of newspapers in the United States and spending controls are a fact of life even at very prosperous metropolitan dailies. But the “Times,” which boasts of being the nation's most profitable newspaper, is not used to such trimming. Mr Tom Johnson, the publisher, told the staff that "prudent expense reductions" were needed because 200 classified advertisers and 135 display advertisers had gone out of business this year. Classified advertising in the help-wanted section is down 40 per cent, and in real estate it is off 35 per cent, he said. The reduction in "Times" profitability has affected its parent corporation, the Times-Mirror Company, which was the only big chain to report lower earnings in both the first and second quarters of .1982. The. “Times” said the cuts' will not harm news coverage, although the obituaries that have filled a page on Mondays will now be spread over three days and may take some space from other stories. The budget for a total editorial staff of 925 is still SUS4S million for this year, up SUS4.S million from 1981. Editors and reporters said that they could live with cutbacks such as ending first-class plane travel. “Most people accept it,” said Mr John Foley, an assistant managing editor, citing the case of one reporter who had just returned from six days on the East Coast and submitted his expenses account with a hotel bill of SUS2I. He stayed with friends," Mr Foley said. When juries return multimillion dollar verdicts in libel cases, journalists and

press lawyers regularly say the awards have a “chilling effect" on news organisations' pursuit of controversial stories. The phenomenon is easier to assert than to demonstrate. Editors and television news directors say the fear of a suit does not make them refrain from assigning reporters to check on potentially troublesome stories. None would say on the record that fear of a libel suit had led to a decision not to print a story that careful reporting showed was true. In spite of such verdicts as the SUSI.B million judgment for the actress Carol Burnett, against the “National Enquirer" or SUS2 million for William Tavoulareas, the President of Mobil Oil Company against the "Washington Post." media defendants win more than 90 per cent of their cases. Multi-million dollar verdicts are rarely collected in full.

One cause of the press worry is that even a frivolous suit may involve hundreds of hours of legal time, record-searching and depositions, and the publicised verdicts prompt extra cases — just as a handful of large awards in medical malpractice cases brought a flood of similar suits. The “Post” showed one effect of a 1978 Supreme Court decision in Colonel Anthony Herbert’s case against a C.B.S. “60 Minutes" programme. The court said that a libel plaintiff trying to prove malice, is entitled to the news organisation's files ■about an article or programme. and the "Post” was required to turn over the reporter’s notes and rough drafts as well as memorandums from editors.

Mr Tavoulareas used the documents to contend that there were internal questions raised about the piece before it was published. , Lawyers for the press and for plaintiffs say more cases are likely to get to juries, and Mr William Marcil,. president of the: American Newspaper Publishers Association, said that juries “think newspapers ; and insurance companies are filthy' rich." ■ •'

Newspaper publishers. fought .vigorously to keep the; American Telephone and Telegraph. Company - out of the electronic information business. They ’ said that * A.T.T.'s resouces were so great that they could overwhelm any local newspaper that wanted to enter the field by, for example, using two-way cable systems to Jet users at home call up specific news stories or categories of classified advertising. The publishers cheered when a Federal judge said that he would not approve a proposed settlement between the phone company and the Justice Department unless the phone company agreed to stay out of electronic information for at least seven years. But keeping the telephone company out does not guarantee that newspapers will get in or that such services will soon require enormous capital investments.

A few dozen American newspapers provide news texts on local cable systems, in some cases on a channel they lease, but often - the stories are no more than two hundred words and serve mainly to encourage viewers to buy the newspaper to get the full account. r