L.A. Times's epic battle to retain glory – and profits

Act One came in August when the Los Angeles Times, the nation's fourth-largest newspaper, was asked to make serious job cuts by corporate bosses half a country away in Chicago.

Act Two came in September when the publisher publicly refused, but after holding out for three weeks, he collected a pink slip anyway.

Now, in the lull before what is expected to be another showdown in December, the Los Angeles newspaper has launched the "Manhattan Project," in which its own staff will investigate solutions to reinvent the paper for the future.

With newspapers across the country scrambling to respond to the loss of readers, ads, and revenue, the Los Angeles Times's reinvention project is a window into the struggle of an American newspaper industry that is colliding with the Internet and other news-delivery options.

"What is going on with the L.A. Times is going on in newspapers everywhere," says Tom Petner, a journalism professor at Temple University in Philadelphia.

He and others cite steady news of layoffs at papers across the US in recent months capped by announcements last week that 101 jobs will be eliminated at the San Jose Mercury News by December and the announcement of imminent layoffs at The Philadelphia Inquirer.

"The title, [Manhattan Project] is telling because it sounds nuclear and urgent," says Mr. Petner. "Everyone is trying to figure out where their audience is going, what they are reading, where, and how to reach them."

Newspapers have faced a steady decline in subscriptions as people – particularly younger generations – shift their news habits to TV and the Internet.

Newspaper revenue has also fallen off as a result of fewer classified ads, some of which are now posted on websites. And department stores have consolidated or cut back on advertising. The Los Angeles Times has been hard hit by fewer movie ads in its pages.

The Times has also been pushed to pursue higher profit margins to boost the stock of its parent company, the Tribune Co., which lost nearly half its value since it bought the paper in 2000.

In August, the newspaper, then reportedly making a 20 percent profit, was told to make staff cuts to attain a 30 percent profit. Publisher Jeffrey Johnson refused, saying the staff had already been trimmed from 1,200 to 940 in recent years and further cuts would force it out of the top ranks of American journalism.

Several civic leaders have urged the Tribune to return the paper to local ownership, and three Los Angeles billionaires have expressed interest in buying it from the Tribune Co., which is considering selling some of its media holdings.

The same is true of The Boston Globe, where Boston native and former General Electric CEO Jack Welch is reportedly considering putting together a bid to buy the paper from The New York Times Co.

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