Times' funding of Spanish-language insert rankles staff at La Opinion.

Every September for the last 67 years, the Lozano family, longtime owner of Spanish-language newspaper La Opinion, has hosted a dinner dance for its 450 employees. The party celebrates Mexican independence, but also toasts the success and longevity of the newspaper.

But this year the mood at the party was bitterness and distrust, according to Jose Lozano, La Opinion publisher.

La Opinion is no longer entirely independent and the bad vibes were directed at the newspaper's new partner, Times Mirror Co., according to Lozano. Times Mirror took a 50-percent ownership stake in La Opinion in 1990.

Then, this fall Times Mirror invested an estimated $2 million in revamping Nuestro Tiempo, which had been a 15-times-a-year bilingual insert in the Los Angeles Times. Now the tabloid is a color-filled, all-Spanish language weekly that leans heavily on sports and entertainment -- the strong suits of La Opinion.

These changes were done without consulting La Opinion's executives, who were shocked when they found out about them from one of their advertisers, Lozano said. Lozano now perceives Nuestro Tiempo as a serious competitor at a time when his publication is recovering from two unprofitable years.

There is speculation among Hispanic media executives and advertisers that Times Mirror may be trying to kill off La Opinion.

David Laventhol, publisher of the Los Angeles Times, said in October that Nuestro Tiempo, as a free weekly publication with circulation of 325,000, complements Times Mirror's La Opinion investment.

La Opinion has paid circulation of 109,000. Nuestro Tiempo circulation is now up to 420,000.

"Executives of the Times and La Opinion continue to explore a number of ways to make that relationship more valuable," Laventhol said.

This conciliatory statement didn't appease Lozano, especially after he saw one of his biggest advertisers, Circuit City, take away its $100,000 account and move it into Nuestro Tiempo, partially because the Times offered a special package deal that also involved advertising space in the Times itself.

Nuestro Tiempo's first nine issues since going weekly have averaged 50 pages and have attracted advertisers that La Opinion doesn't carry, according to Michael Martinez, Nuestro Tiempo's publisher. Movie studios have taken ads for their films, as have major regional department stores such as Robinsons*May and the Broadway. These retailers wanted large in home delivery, something La Opinion was not doing, according to Martinez. Nearly all of La Opinion's circulation comes from newsstand sales.

Sergio Munoz, editor for Nuestro Tiempo, was formerly executive editor at La Opinion and spent 12 years there. "More competition in the Latino community is good. This is the best thing for La Opinion. Every time they have faced a challenge, they have gotten better and -- based on history -- Nuestro Tiempo will make them better," he said.

Munoz also predicted that if Nuestro Tiempo is successful, it will encourage more advertisers to use Hispanic newspapers and La Opinion will be the beneficiary of that.

Lozano said he doesn't see it the same way. During the recession, the advertising pie has shrunk and he doesn't want to see it cut any thinner by Nuestro Tiempo. He said he has complained to Times Mirror executives in board meetings, expressing his fears that Nuestro Tiempo is invading both his advertising and editorial turf.

But his complaints have not been met with conciliatory understanding, Lozano said. He now uses the David vs. Goliath analogy to galvanize his staffers.

"The Times' investment in La Opinion now doesn't make any sense to me," Lozano said. "The party line is that they need to drive a stake into the ground and protect this market from outside competitors. We figured we were the stake."

Lozano said New York Times Co. and Chicago Tribune Co. have studied the possibility of establishing a Spanish-language paper in this market. L.A. is the largest Hispanic county in the U.S., with an estimated 3.5 million legal Mexicans and Latin Americans.

Despite the numbers, there is just one Spanish-language daily, La Opinion, primarily because advertisers have not supported more, said Lozano. Just 2 percent of all U.S. advertising dollars go into Hispanic media and much of that goes into television, according to Munoz.

However, that is changing, with more large consumer goods companies looking to reach Hispanics through all forms of media, said Munoz. This is causing more Hispanic newspaper start-ups.

The New York Times last month launched a Spanish-language weekly in Santa Barbara that is distributed as far south as Ventura County. Lozano theorized that L.A. Times management saw new publications coming and "panicked" by revamping Nuestro Tiempo to discourage the New York Times from invading L.A.

Nuestro Tiempo has been around for nine years, but has had little journalistic impact and was not a major revenue producer in its monthly format, Lozano said.

The last La Opinion board meeting was "tense," according to Lozano. The nine-person board has five members from La Opinion and four from Times Mirror. All capital expenditure decisions require a 66-percent vote, Lozano said.

Lozano added he will go before the board and ask for about $2 million for new printing presses next year. He expects the board to approve that request but would prefer if the Times would offer its own printing presses to save La Opinion the expense.

Lozano has forecast at least 10 percent circulation growth over the next five years and sees La Opinion's circulation hitting 180,000 over the period.

For the first time in La Opinion's history, the paper lost money in 1991. Lozano said he expects to be back in the black this year and has planned a 3 percent gain in 1994. But the specter of Nuestro Tiempo is troubling, because Los Angeles has never been able to support more than one Spanish language newspaper, Hispanic media observers said. La Opinion has had several challengers over the years but they have all folded.

"We were taken by surprise by Nuestro Tiempo and there was a sense of betrayal, but those feelings are being harnessed now. We have survived every other competitor and I'll be damned if we don't survive this," he said.