The Los Angeles Times in Crisis: Stalled Subscriptions, Drowsy Leadership, Slack Channel Trash Talk (Exclusive)

“This very much feels like a sink-or-swim moment for the paper,” a veteran reporter says

One year ago, top editors at the Los Angeles Times delivered a sobering update to the newsroom: The future of the paper was at stake. With  170,000 digital subscribers, the Times was far from its target of 300,000 for the year — a number that didn’t even cover half of the newsroom’s costs. It was an alarmed call to action, leading to the formation of a special “sprint” team to focus on increasing conversions — whereby a non-subscribing reader takes the plunge to become a subscriber — and a plea that everyone in the newsroom make subscription conversions their “top priority.”

Now, a full year later, the Times has barely surpassed its previous goals. Despite an influx of new paying subscribers, the paper had 253,000 paying digital subscribers and 356,000 total digital subscribers — which includes readers accessing content via Apple News subscriptions — as of last week, according to the paper. Hillary Manning, a spokesperson for the Times, said the “number of direct paid digital subscribers has increased by at least 78,500 since the beginning of February,” in response to questions from TheWrap.

The Times is certainly not alone in its struggle to convert its past successes with print readers into a sustainable digital and subscriber-driven future. But interviews with more than half a dozen Times employees, as well as a review of previously undisclosed Slack messages and other internal documents, paint a picture of a venerable news organization in crisis: Staffers describe an internal push for signing up new subscribers that threatens to overshadow quality journalism, a lack of transparency in subscription rates and an executive editor, Norman Pearlstine, who has become so disengaged that he “falls asleep in important meetings.” In addition, many in the newsroom have been vocally critical of management’s handling of misconduct accusations against top editors as well as issues of diversity related both to the paper’s coverage and its newsroom staff. They fear the paper is squandering the rare chance to rebuild — and forge a lasting future — as the West Coast’s best news organization.

“The future of the paper is at stake here,” a veteran reporter at the paper told TheWrap. “It’s imperative that we continue to be able to tell the story of Los Angeles and Southern California and California and the West and even points beyond, especially in this age where so many newspapers are dying or shells of their former selves. But to be able to do that, we have to have a sustainable model, we have to have positive, engaged leadership with a plan and a direction that are interested in something else other than furthering their own careers. And we don’t have that right now.”

Patrick Soon-Shiong

Dr. Patrick Soon-Shiong (Alberto E. Rodriguez / Getty Images)

The “sprint” for digital subscribers

A year after his 2018 purchase of the Los Angeles Times and its sister publication, the San Diego Union-Tribune, for more than $500 million, billionaire philanthropist and bioscientist Patrick Soon-Shiong shared an ambitious benchmark for his media company: to quickly gain 1 million digital subscribers and ultimately reach between 2 to 4 million by 2023. (In a separate interview, Soon-Shiong set his sights even higher at 5 million but did not attach a timeline to that goal.) At the time, the Times had 157,000 digital subscribers, which was almost double the number of subscribers it had over the past two years under parent company Tronc. Soon-Shiong envied the rapid subscriber growth of competitors like the New York Times, which then had 3.4 million digital subscribers, and the Wall Street Journal, which had 1.7 million, to argue for similar growth for the L.A. Times. (Last week, the New York Times reported 5.7 million digital-only subscriptions while the Journal reported 2.2 million digital-only subscriptions.)

Paired with a hiring spree that brought on 110 new Times staffers and high-profile poaches for masthead editors from publications like the New York Times, Slate and BuzzFeed, the Times seemed poised to make headway on these goals.

But four months after Soon-Shiong’s public comments, the paper’s top editors sent out that distressed memo. Though the Times gained 52,000 new subscribers since the start of the year, 39,000 subscribers had canceled, leaving the net total at around 170,000 digital subscribers — a far cry from the 300,000 benchmark set for the end of 2019, let alone Soon-Shiong’s suggestions of subscriber numbers in the millions.

The memo, sent to staff from Pearlstine and Managing Editor Scott Kraft, tasked to editors Kimi Yoshino and Julia Turner with leading this digital “sprint,” while the rest of the newsroom had to work together to make conversions “Job One.”

Last August, Turner created a Slack channel to coordinate communications with Yoshino and Kim Janssen, a digital analyst hired earlier that year to “sit at the intersection of reader analytics and journalistic decision-making,” according to the company’s hiring announcement. The conversations were frank: Hockey coverage wasn’t doing well, with an “entire season of Ducks coverage” only getting “30,000 unique visitors and 0 conversions, combined,” Janssen said, according to Slack messages reviewed by TheWrap.

When a reporter was offered a job at another outlet, Janssen found that his work didn’t generate a big enough audience to match his new salary offer, making it “a pretty easy decision to turn him down,” according to the messages. Meetings with mid-level editors were rehashed in bullet-point form, while criticism was leveled at specific editors who pushed back on openly discussing revenue in the newsroom or didn’t spend enough time looking at audience data. And as a select few people were directly added to the channel to essentially join the “sprint” team — including assistant managing editor Angel Rodriguez, who oversees multiplatform and audience engagement editors — the conversations continued to be unfiltered.

All this might’ve been expected, perhaps, for a private conversation between colleagues. But the sprint team channel, seemingly unbeknownst to its members, was viewable by the whole newsroom.

As the months went by, more staffers became aware of the channel’s existence and began looking in to see what was being discussed; some read along in dismay when their names were dropped, while others began checking in on the channel after having a meeting with members of the team to see how it would get recapped to others, according to half a dozen staff members who spoke with TheWrap. At a certain point, about 100 people in the newsroom were aware of the not-so-secret channel, according to two staffers.

But aside from the “catty” and “snarky” commentary, as a veteran editor said, Times staffers were growing concerned by the team’s efforts to boost conversions. Late last year, Yoshino suggested that staffers who were “doing good” could be given a $5 Starbucks gift card as a reward — an idea that appeared to be quickly dropped. Janssen said it was his dream to have a “profitability metric” that would show how much money each story made. And in April, when furloughs hit parts of the company with the onset of the pandemic, Rodriguez wrote, “Anyone who hasn’t had a byline in the last two weeks should be furloughed with some of the biz side people personally.”

Manning confirmed the existence of the Slack channel for managers “to discuss and brainstorm ideas about digital audience and subscriber conversion strategy” but did not comment further on its contents.

Outside of the Slack channel, mid-level editors also received emails from the sprint team at the end of last year telling them that they needed to double their monthly output of “winning” stories as part of the push for subscribers, according to emails reviewed by TheWrap. Using feedback from editors on what types of stories they considered to be “winning content types,” which for some included “ambitious features” and “deeply-reported podcasts,” the sprint team outlined the exact number of articles the editors would need to produce per month, setting a three-month deadline, the emails said. In some cases, those numbers would have required the production of a “winning” story every single day of the month by a single editor. The idea appeared to be dropped in March — the month when the editors were supposed to reach those targets — when the pandemic fully hit California, according to a veteran editor.

Clicks at the expense of “quality journalism”?

Reporters were increasingly concerned that the drive toward subscriptions was coming at the expense of core journalistic values.

“There was no thought given to how long quality journalism … takes,” another veteran editor said. “It was ridiculous.”

Janssen also began meeting one-on-one with teams of reporters to discuss content and story metrics. But these conversations, according to five reporters and editors, haven’t provided staff with useful advice. “We’re a pretty tolerant newsroom. If he had any actual bright ideas that wouldn’t compromise our journalistic integrity, we would listen,” a veteran editor said. “You don’t hear things from him that stick and make you think, ‘Oh s—, this guy’s figured it out. This is what we need to do, this is how we should cover things.”

According to three staffers briefed on one of the conversations Janssen had with a team of reporters, Janssen had said it was hard to get people to “care about a middle-aged Black man” when he was asked why a story about a man who was released from prison after 37 years under a new felony murder law did not perform as well.

“That’s an absurd thing to say, especially reflecting now, given this moment, and all of the scrutiny on law enforcement and … injustices in the criminal justice system,” a staffer with knowledge of the conversation said.

Of this conversation, Manning said, “The point is that more people should have read that story. It’s an important story.”

Staffers also pointed to emails that Janssen sent to the whole newsroom highlighting “Five Things That Worked” from the week that performed well and earned the most conversions. Some of the memos, according to emails reviewed by TheWrap, also commended the reporters who simply had the most bylines or, in one case, used the word “testicles” in the headline to draw more readers.

“We are missing some very important meaning here, which is (that) there are all kinds of things that we do as a newspaper that people don’t necessarily want to click, but they want to know that we’re out there doing it,” a Times staffer said.

“We’re as bad as the cable company”

Meanwhile, as the editorial side has been focused on increasing the number of new subscribers, glaring technical issues hurting subscriber retention have been going unaddressed by the business side of the company, according to an individual with knowledge of the matter. Some of the issues include subscribers hitting paywalls, not being able to log in to their accounts or having trouble even signing up for a subscription.

“If we allocated additional resources to solving these problems, we could resolve these issues faster,” the individual said. “Instead, across the company, the focus seems to be on acquiring new subscribers.”

Then there’s been the issue of subscription pricing. The Times has tried to boost its revenue by quietly making subscription prices higher for customers they predict will be willing to pay more — a practice that the New York Times has also done with about 200,000 of its longest-subscribing readers, according to Nieman Lab. But the L.A. Times has not approached the price increase from a point of “transparency,” the individual said — and some customers have begun to notice the pricing discrepancies, according to customer complaints submitted to the Better Business Bureau and published on Yelp.

“Our customers would expect transparent and stable pricing, and right now, we’re not giving that to them,” the individual said. “When we do things like this … we’re playing into the idea that we’re as bad as the cable company.”

Manning, the Times spokesperson, acknowledged that the paper still has “quite a bit of work to do” on its subscription service, but noted that there was a “dedicated team who spends time with each desk and section, sharing data and training everyone on approaches to digital publishing that increase the chances of the stories they report and edit finding an audience.”

“If it was not clear before the coronavirus pandemic it should be obvious to anyone at a newspaper now that becoming digital-first, and building a sustainable digital subscription business, is necessary to both serve the community and survive,” Manning said. “One of the goals of this process is to understand what’s working, and what’s not, so we can make smarter choices about pursuing and presenting important stories, while also figuring out what we can stop doing in order to focus our efforts on what is of value to readers and subscribers. We’re heartened that the work we’re most proud of is often the work that’s also the most read. And we know that we still have quite a bit of work to do.”

Like many other newsrooms across the country, the pandemic has ravaged the Times’ advertising revenue. The paper lost more than a third of its ad revenue as of April and is expected to lose half in the coming months, according to Times President Chris Argentieri, highlighting the need for a robust subscriber revenue model that can help the paper survive.

Norm Pearlstine

LA Times Executive Editor Norm Pearlstine. (Bryan Bedder / Getty Images)

“Norm falls asleep in important meetings”

Staffers at the Times said the paper is reaching a crossroads — and not just when it comes to financial stability. In February, Times staffers sent a damning letter to Soon-Shiong to say they had lost faith in Pearlstine and his masthead-level hires and promotions — many of whom have been shuffled around in their positions — describing the leadership team as “problematic and disappointing” and not “qualified to take The Times to the next level.”

“While most of us applauded your appointment of Norm Pearlstine as interim executive editor, a year and a half later he has lost the support of the vast majority of the staff,” the letter, obtained by TheWrap, said. “Norm has been slow to respond to staff complaints of incompetent management and unethical behavior that would tarnish The Times’ reputation if they ever became public. Key departments are headed by editors who are neither respected nor trusted. A common staff lament is that top editors are not engaged. Norm falls asleep in important meetings. He forgets fundamental things, such as which editors are responsible for which coverage, even on major stories.”

The letter also said Pearlstine and his top hires have not defined a new core identity for the Times: “Are we a regional paper, a California paper, a Pacific Rim paper or a national paper? Without an answer, we lack a cohesive plan for hiring and coverage that should be the foundation of our rebuilding efforts.”

“Simply put,” the letter continued, “Norm has not been a strong leader, and the hand-picked managers he has surrounded himself with have shown no leadership qualities of their own. We are rudderless on matters essential to The Times’ prospects for the future.”

Since that letter, staff members have both quietly and forcefully been speaking out about accusations of misconduct against top editors and high-profile staff. The Times’ food editor, Peter Meehan, resigned last month after facing accusations on social media that he was verbally abusive to staff and sexually harassed women. Vice News reported last month that former deputy managing editor Colin Crawford retired from the paper in the wake of accusations that he bullied his staff and inappropriately touched his female colleagues. Since then, 50 women at the Times have demanded a formal investigation into how the company handled the accusations against Crawford, which span back to the ’80s and ’90s. (He has denied wrongdoing.)

Times sports columnist Arash Markazi was also placed on paid leave last month after members of the sports section accused him of “repeated ethical breaches,” leading to an internal investigation, while further scrutiny over a potential ethical breach involving a party the sports section hosted at the Santa Anita racetrack has led to further calls from newsroom staff for a formal investigation. And a recent letter from the Times Guild has decried “an environment of hostility, intimidation and harassment” for staffers who speak out about misconduct, adding that Pearlstine himself has verbally harassed and retaliated against a reporter while dismissing concerns of “ethical lapses.”

Meanwhile, the police killings of Black Americans have led journalists of color at the Times to renew their calls that top editors reevaluate how the paper covers issues of race and address what they describe as glaring internal inequities regarding newsroom diversity, retention and pay. Social media campaigns from the Times union’s Black and Latino Caucuses have called further attention to the racial disparities within the newsroom, while a proposed class-action lawsuit — which the Times is expected to settle — has added further heat to the accusation that the Times has discriminated against Black, Latinx and women journalists through its pay practices.

In a July 1 memo sent to the paper’s staff shortly after the publication of investigations from multiple outlets about turmoil at the Times, Soon-Shiong reiterated his support for Pearlstine and other newsroom leaders for their “leadership, integrity and passion for great journalism” and said the allegations about misconduct “had been reviewed previously and had been found to be without merit or otherwise addressed appropriately.” He added, “The most important thing I want to say is that we, as a company, take any claims of misconduct, discrimination or harassment seriously. We have a responsibility to you to maintain the highest standard of ethics and an environment of mutual respect.”

But for a veteran reporter who spoke with TheWrap, the paper continues to sit at a “critical” juncture.

“This very much feels like a sink-or-swim moment for the paper. And when the people who are supposed to be guiding the ship, so to speak, don’t seem to be aware of what’s going on — if they’re even around — it’s alarming. It’s very, very alarming,” the veteran reporter said.

“For all the good Dr. Patrick has done to the paper, for all the time and money he’s invested in it, it’s galling that he’s being so poorly served by those in charge,” the reporter continued. “The paper has such an incredible opportunity, but (Times staffers) really feel like the window’s limited to take advantage of that. And the longer we go on with this kind of leadership group, more quickly, that window closes and that’s a really dangerous place for all of us — for anybody who cares about the story of California being told.”

J. Clara Chan

J. Clara Chan

Media and politics reporter • jclara.chan@thewrap.com • Twitter: @jclarachan



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