Loss of Tribune's fuller thrusts L.A. paper into uncertain times.

THE retirement of Jack Fuller, president of Tribune Co.'s publishing unit, raises the murky question of which shoe might drop next at the beleaguered newspaper group's flagship paper, the Los Angeles Times.

Fuller, who has been a close friend of Los Angeles Times executive editor John Carroll, is being replaced by a Chicago Tribune executive, Scott Smith, who has been an ongoing rival of Times publisher John Puerner within Tribune's corporate hierarchy.

The management shifts could take on significance given the Times' weak advertising and circulation performance this year. Not helping is the ongoing tension between the paper's newsroom and Chicago-based Tribune, whose bean-counting culture is at odds with what has been a more free-spending climate at the Times. Given the recent job cuts at the Times, Fuller can hardly be seen as having been a protector of the Los Angeles newspaper. But Smith's ascension as Puerner's boss is bound to raise renewed concern of even tighter budgets and additional cuts.

Smith, after all, comes from an accounting and finance background, while Fuller is the only high-level Tribune executive to start in the newsroom and work his way up the company's ranks.

Third-quarter advertising volume at the Times fell 9 percent from the year-ago period, Tribune reported last week. Ad revenues have been a troublesome area for the Times for much of the year--vaguely attributed to everything from the Southern California supermarket strike to high gasoline prices. What appears to be hurting the Times in particular is a drop-off in department store advertising.

What also stood out in last week's earnings report was a 5.6 percent drop in weekday circulation, to 902,164, and a 6.3 percent in Sunday circulation, to 1.3 million.

Puerner attributed the circulation declines to the effect of national "Do Not Call" legislation, which reduced the number of homes in Los Angeles that the company could cold-call to generate subscriptions. He also said Tribune made a deliberate decision to reduce third-party sales.

"Los Angeles is still the problem." said Edward Atorino, an analyst at Fulcrum Global Partners LLC, referring to Tribune Co.'s 33 percent decline in third quarter earnings. Entertainment, retail, technology and auto remain weak ad categories, he said.

Fuller, who told reporters that Tribune's financial problems were not a factor in his decision to step down, began as a 16-year-old copyboy and rose to the position of publisher and chief executive of the Chicago Tribune before becoming president of the group's broader publishing assets in 1997.

As the Chicago Tribune's editorial page editor, he won a Pulitzer Prize for editorial writing in 1986.

Smith was publisher of the Ft. Lauderdale Sun-Sentinel in the mid-1990s, while Puerner was president and publisher of the Orlando Sentinel. Smith has been publisher and chief executive of the Chicago Tribune since 1997.

While much of the newspaper industry has been struggling with weaker-than-expected revenues, Tribune's financials have been under special scrutiny because of a circulation scandal at its Newsday and Hoy properties. The circulation irregularities have prompted an inquiry by the Securities and Exchange Commission.

Tribune has repeatedly lowered its earnings guidance and last week reported third-quarter net income of $119.6 million, compared with $176.2 million for the like period a year earlier. The results included a $55 million charge related to the Hoy/Newsday circulation scandal. Advertising revenues at the Times have been an ongoing drag on the newspaper group as well, since the Times is its largest newspaper.

Third quarter revenues rose by 2 percent to $1.41 billion.

Tribune stock has fallen by 15.5 percent this year to $43.25 a share as of Oct. 28.