Investors Yawn Over Chandler Missive on Times Management.

Investors have been known to send a company's stock plummeting in cases in which a controlling shareholder openly criticizes top management.

But when Otis Chandler, a controlling shareholder of Times Mirror Co., last week ripped top managers of the Los Angeles Times over their controversial profit-sharing deal with Staples Center, investors yawned.

Times Mirror shares actually rose about 2 percent on the day after news broke that Chandler, a key representative of the family that controls 64 percent of the company's shares, had singled out Chairman and Chief Executive Mark Willes as being unqualified to run the company.

The source of the Times turnoil is journalistic ethics, about which Wall Street could care less.

Fact is, Wall Street likes Willes, who has been at the helm for over four years. Ed Atorino, an analyst with Wasserstein Perella Securities in New York, said the only people who care about profit-sharing scandals are journalists.

"From Wall Street's point of view, it's irrelevant," said Atorino. "If the Chandler family were stupid enough to force Willes out, the stock would crash."

Nor are institutional investors especially concerned about Chandler's lack of faith in the paper's top management, or the ethical implications of the Staples Center deal.

Bill Branch, a spokesman for the California Public Employees' Retirement System, a Times Mirror shareholder, said, "We look at the best returns at the lowest risks for our investments, and we don't get involved in social investment."

Moreover, some analysts find nothing wrong with L.A. Times Publisher Kathryn Downing's scheme to split the profits from a Sunday magazine issue on the Staples Center with the subject itself.

Lauren Fine, an analyst with Merrill Lynch Global Securities, said she hasn't heard a peep of complaint from investors about the profit-sharing deal.

"I guess my attitude is, 'OK, they tried something and maybe it did or didn't work and they can move on,' " Fine said. "I give them credit for trying."

What matters to investors are whether the company is making money and whether its stock price is rising, period. And last month, Times Mirror reported earnings per share of 73 cents for the third quarter ended Sept. 30, beating analysts' consensus estimate by 5.8 percent and the year-ago earnings per share by 26 percent.

The big jump, however, was due less to operational improvement than to an intricate reshuffling of the capitalization structure. In September, a new limited liability company was established in partnership with the Chandler Trust, which represents the holdings of the Chandler family, including Otis.

The Chandler Trust shifted $1.2 billion worth of Times Mirror stock into the new company, called TMCT II, and Times Mirror agreed to invest $1.2 billion worth of cash and other assets into TMCT II.

The Chandlers now get the returns generated by the cash and other assets, and Times Mirror receives the dividends from the $1.2 billion in Times Mirror stock, which effectively removes those shares from the marketplace.

The restructuring has reduced the Chandler Trost's 73 percent equity stake in Times Mirror to 64 percent, but it allowed the family to effectively diversify its holdings without paying capital gains taxes.

Wall Street applauded the financial maneuvers.

Staff reporter Deborah Belgum contributed to this story.