LABJ's first 20 years.

20 Years and Several Changes of Ownership Later, the Business Journal Is a Very Different Newspaper Than the One Founded by Cordovan Publishing

Where did we come from?

It's a question that s bound to come up in most any pursuit - even among cynical, unsentimental journalists. Well, here's our story...

The newspaper you're now reading was founded 20 years ago by a Houston company called Cordovan Publishing at a time when the appetite for business journalism was growing both among traditional dailies and other publications.

The weekly's original mission, according to founding Publisher Bob Gray in the premiere issue on July 9, 1979, was to provide "business intelligence" and "practical information."

In the beginning, actual news was not the Business Journal's strong suit. One large story, typically a feature or commentary, graced the cover each week - a modest presentation compared with the current offerings of many business publications and business sections of daily newspapers.

Back in 1979, computers were just starting to creep into newsrooms, but the Business Journal was strictly a typewriter operation and remained that way well into 1985.

"We'd write our stories on a double-spaced typed page, then the editor would edit them with a pencil, crossing out words or using editing symbols," recalls Bob Howard, an editorial staff member from the early years.

The marked-up page would then be retyped and manually key-stroked into a typesetting computer.

As for the offices themselves... well, let's just say that the characters from "The Front Page" would probably feel right at home.

"(Founding editor) David Rees used to bring roach powder from home and sprinkle it along the walls," says David Yochum, the paper's editor in the early to mid-'80s. "(Rees) also had a cot set up in the office. In case any workers began feeling ill, he'd have them lie down a while."

Shortly thereafter, the paper moved to somewhat better surroundings on Sixth Street in Mid-Wilshire. Summers were still especially challenging.

"The only room that had air conditioning was the production department," recalls Marcia Lindahl, production chief at the time. "We had extension cords all over the place, typewriters and tans going. We were constantly blowing fuses."

In the afternoons, reporters who owned typewriters would go home to write their stories. As for the rest of the staff: "One of our typesetters lived nearby and had a pool in her building, so we'd all take off and go swimming," Lindahl says.

Only a year after starting the Business Journal, Cordovan Publishing sold out to E.W. Scripps Co.

"We had four papers and I couldn't get any more credit," says Bob Gray, founding publisher, from his home in Houston. "We felt we had to move quickly into other markets before somebody else had the same idea, and I knew I couldn't get into those markets quickly without merging with a larger company."

The buyout by Scripps caused L.A. staffers' hopes to rise.

"I thought this was a good opportunity," Howard says. "Scripps is a big publishing company and I thought these guys would put a lot of money into the paper, which didn't really happen."

Ad sales under Scripps were especially weak, recalls Yochum.

"There were several issues in 1983 that didn't have a single paid ad in them," he says. "Our ad director would leave early and say, 'You can reach me poolside,' but nobody had his phone number. It was awfully hard to fill all those ad-free pages. We made up some very unusual house ads (unpaid ads promoting the paper)." And when there were paid ads, the number of them was unpredictable.

"I used to go crazy because we didn't know how big the special report was going to be," says Howard. "Advertising sales were so erratic and unpredictable, I didn't know if my section would be two pages or 12 or 16. I didn't have any staff or freelance budget."

Then in 1986, Scripps sold its 11 business journals, including the Los Angeles paper, to American City Business Journals Inc.

Scripps had been losing lots of money on its papers, including Los Angeles, and some industry executives questioned whether profitability was even possible in a big-city market. The only profitable big-city business weekly at the time was Crain's Chicago Business.

"Scripps' problem was that they ran the same story in L.A. that they ran in Houston," says Bill Worley, a former senior executive at American City. "Our pitch was, if the president gets shot in your market, run a story on the local undertaker. Don't try to be a national paper. It worked great."

American City began to invest in the L.A. Business Journal, as well as the other business journals it had picked up. As part of that transformation came a formula of features that have become commonplace among business journals all over the country.

"The Scripps papers weren't making money, but I never thought (business journals) wouldn't work in major cities. Crain's was making it work in Chicago," recalls Mike Russell, former chairman of American City. "Scripps was running a lot of fluff stuff and not any hard news. It was almost a press-release product, not a hard-news product. And their circulation was all mixed up. It was more of a controlled (free) circulation paper."

The Business Journal's fate took another turn when the 1987 stock market crash sent American City's stock from $46 a share to $10.

To deal with its $40 million debt load, American City sold off nine of its money-losing papers in 1988. The San Diego and Los Angeles papers went to Larry Bridges, a Kansas City developer.

Bridges hired Tom Link, ad director of the Sacramento Business Journal, to take the helm as publisher and turn around the L.A. paper.

"When Larry bought the paper, the L.A. Business Journal was ranked, on an ad-revenue basis. 20th out nf the 25 ACBJ owned and managed papers," says Link. "By the end of 1989, it was first."

The newsroom became more aggressive as well, though sometimes employing some very unorthodox management techniques.

"I had this pink satin pillow with the word 'Shame' embroidered on it," says Yochum. "If a reporter misspelled a word, I'd throw it at them."

Only one reporter escaped such treatment, a hypersensitive sort who once fell asleep at his desk with a beer in hand.

"I'd never throw it at him, because I was afraid he'd cry," Yochum says. "So when it came time to fire the guy, my boss came to town for the occasion. And the reporter said, 'You can't fire me; I'm the only one who has never once been hit with the 'pillow of shame.'"

Yet another reporter worked for three months without ever filing a story.

"He'd go out to cover a story, get in his car and get so terrified that he'd throw up," Yochum says. "He'd always come back with some excuse. 'Oh, they cancelled the meeting,' or something. But he was a terrific dresser. He looked the part."

The Business Journal also faced some challenges from the outside world, the biggest one being the L.A. riots, which broke out on a Thursday afternoon, just as the paper was about to go to press. The layout for that week's edition was immediately redone and reporters hit the phones to cover the unfolding situation.

Staff photographer Todd Frankel was dispatched to get photos of the looting and arson. By late afternoon, the skies were filled with smoke. The building directly north of the Business Journal was engulfed in flames.

The Business Journal eventually moved west to its current location in the Miracle Mile district. In the mid-1990s, Bridges brought in Matt Toledo to be publisher. Toledo bolstered the revenue side of the operation and then hired Mark Lacter as editor.

Lacter restructured much of the editorial operations. As part of a major redesign, the paper was divided into various departments, such as small business, media and technology and investments and finance. In addition, more resources were placed on the weekly special reports - a move that turned the weekly into more of a magazine.

"We realized early on that with so many instant sources of information available, we would have to provide our readers with more," Lacter said. "Not that we don't love breaking a good story."