aNewDomain — On September 8, billionaire money man Austin Beutner was fired as publisher of The Los Angeles Times by the paper’s parent company, Tribune Publishing.
It was a humiliating comedown for the former LA deputy mayor. He was escorted from the building carrying his belongings in the ritual banker’s box. They immediately turned off his latimes.com email account, reducing him to posting his complaints on Facebook.
They treated him like a peasant. Could he be plotting his revenge?
According to Tribune and Times insiders, Beutner pissed off Tribune CEO Jack Griffin when Beutner crony and fellow LA billionaire Eli Broad approached Tribune with a second offer to buy the Times and the other dominant newspaper in southern California, the San Diego Union-Tribune.
For Tribune, which depends on the Times for news stories it feeds to the chain’s other papers, the deal was a nonstarter. To Griffin, it reflected an appalling lack of loyalty, even within the shark-infested waters of corporate America. Who launches a hostile takeover bid from inside a company’s executive suite?
Beutner, who studied finance at the feet of corrupt Russian oligarchs in the rubble of the post-Soviet collapse under Boris Yeltsin, is not a man who takes no for an answer. So it’s hard not to think that he might be rolling Keyser Söze-style in light of recent developments at Tribune.
Two days after Beutner’s dismissal, he got 60 LA “civic leaders,” including his old boss the former mayor Antonio Villaraigosa, to sign a petition demanding Beutner’s reinstatement and transfer of the Times to “local control,” i.e. to Beutner and his financial partners.
On September 20th New York Times media reporter Ravi Somaiya published an absurd love letter to Beutner:
“Beutner, 55, a prominent Angeleno who made a fortune in finance and who once served as deputy mayor, was outlining an independent path for The Times that was relentlessly local and focused on better technology, new sections and events.”
He was forging close relationships with Los Angeles civic and business leaders who wanted a vibrant Los Angeles Times as part of the fabric of the city. He had driven the acquisition of The San Diego Union-Tribune, part of a plan to dominate journalism in California.
Two weeks ago, he was called to a conference room and fired.
Having talked to Times employees for years, the claim that Beutner’s short tenure as publisher marked a halcyon period for Times employees is ridiculous. Fear of layoffs, and continued budget cuts, were omnipresent before he came along — and they continued throughout his term.
In an apparent violation of Times rules governing the use of anonymous sources, Somaiya cited random no-names-given to paint a picture of a Times, and a Tribune Publishing, in financial trouble: “Projections suggest that revenue at The Times will drop as much as 10 percent, based on declines in print, before the impact of any acquisitions. It is possible, those people said, that the newspaper can cut its way to profitability again for another year or so. But it is not clear what will happen after that. Every round of cuts threatens to diminish the quality of the paper, employees said.”
Somaiya didn’t quote anyone who disliked Beutner — including this writer, who believes he was fired as the Times’ political cartoonist as a favor to Beutner’s political ally in his potential run for LA mayor next year, the LAPD police union.
Did Beutner or his allies plant the October 20th piece in the Times?
If not, he might as well have. The day after the Times piece appeared, shares of Tribune plunged 17 percent. It has continued to fall.
On September 28, a new shell company called “Mount Flag” was formed for the exclusive purpose of acquiring the now heavily-discounted stock of Tribune Publishing. As of October 2, Mount Flag announced via an SEC filing that it held more than 1.3 million shares, or just over five percent of the company. “Mount Flag intends to engage in discussions with management, the board of directors, other stockholders of the company and other relevant parties concerning the business, operations, board composition – including the interest in joining the board, management, strategy and future plans of the company,” the new shell company announced.
Note: Sabotaging the share value of a company in order to acquire it cheaply is punishable by high fines and a possible prison term.
Mount Flag is Chief Executive Tim Tianwei Zhang and President Jordan Spiegel. Are they secretly working to execute a Keyser Söze-like revenge fantasy for the butt-hurt Austin Beutner and/or his pal Eli Broad?
If there’s a connection, it isn’t smoking-gun obvious.
There are, however, some tantalizing clues.
First, there’s the timing. Tribune is a dog — a declining stock with poor prospects and management considered incompetent even by print media standards. Why would anyone buy it en masse now, unless they wanted to operate the joint themselves?
Mount Flag CEO Zhang worked at JP Morgan from 2007 to 2011. Beutner is cozy with JP Morgan: the company he founded, Evercore Partners, partnered with JP Morgan in 2013 to bring the Times out of bankruptcy.
Beutner, who whined like a gutted pig after he went not so quietly into that good bright Southland sunshine, has gone silent. Will the next sound we hear from him be the sounds of his hands rubbing together gleefully as he plots his return to 201 West 1st Street?
And if he does, will the SEC have pointed questions for him?
For aNewDomain, I’m Ted Rall.