U.S.A.

Unwanted suitors sniff the News

RITA CHRISTOPHER April 26 1982
U.S.A.

Unwanted suitors sniff the News

RITA CHRISTOPHER April 26 1982

Unwanted suitors sniff the News

The Daily News is as quintessentially a New York phenomenon as lox and bagels or a chocolate egg cream. If The New York Times is the city’s intellect, the News has always been its soul. But last week there was more than a hint of irony when two men not noted for their spirituality tried to buy the 63-year-old paper. In the fray were Texan Joe Allbritton and Australian Rupert Murdoch bidding against each other for control of the financially troubled News.

Antiquated printing facilities, an overstaffed newsroom and bruising labor contracts have turned the News from a prodigious money-maker to a liability for its current proprietor, the Tribune Company of Chicago. The News retains the largest circulation of any metropolitan daily in the United States. But its profitability was severely undermined in the 1960s and 1970s when many of its most loyal blue-collar readers migrated to the suburbs and shifted their allegiance to local journals.

Afterward, the beleaguered paper tried numerous ill-fated promotional stunts. In an attempt to woo middleclass readers, the News abandoned its

traditional formula of sex, scandal and sports, introducing instead longer, more weighty stories that further alienated the surviving old guard. In 1980 the News launched an evening edition, Tonight, aimed at an affluent commuter readership. But its many columns and lifestyle features proved too longwinded for tired executives hoping for a quick snooze on the train. In less than a year Tonight, trumpeted as the financial salvation of the News, foundered as an embarrassing multimillion-dollar fiasco.

Last December, the Tribune Company put the News up for sale. But with the 1982 shortfall projected at between $30 million and $50 million, there were few takers until Dallas millionaire Allbritton signed a letter of intent to purchase—on condition that the paper’s 11 unions agree to a wage freeze and mas-

The Tribune was quick to brand Murdoch's intervention as a transparent attempt to shut the \News'

sive personnel cuts. Allbritton, who already owns a paper in Trenton, N.J., is no stranger to publishing crises. A former owner of the Washington Star, he later sold it to Time Incorporated, which took a $95-million loss before folding the paper last year.

The Texan’s attempt to buy the News, however, was more complicated. When he told the paper’s union leaders that they would have to cut up to 1,600 jobs, they responded promptly with a request

that Murdoch intervene.

For Murdoch, rescuing debt-ridden papers is nothing new. Last spring, he bought The Times of London, where annual losses are estimated at $26.8 million. He also owns the New York Post, a paper that has lost $20 million in the past year because of its attempt to drive the rival News out of the race.

So deep are the wounds from the News-Post war that the Tribune Company was quick to brand Murdoch’s intervention as nothing more than a “transparent attempt to destroy and shut down” the News. Allbritton, said the Tribune, was the “buyer of last resort.” If no agreement could be worked out with him, the current owners would shut the paper down.

That ultimatum put the News unions in a dilemma. And at week’s end it was not clear how far union chiefs would compromise over their request to Murdoch. More than the survival of the News was at stake for them. Executives at the New York Post and The New York Times made it clear that they will demand from their unions whatever money-saving package Allbritton wins for the News. Under those circumstances the union leaders could give up very little without paving the way to further layoffs for their members.

Allbritton has offered News employees who survive the staff cuts a 20per-cent profit share in the paper’s future earnings. The union has responded only with demands to know the full details of the Texan’s understanding with the Tribune Company. Both sides face a negotiating deadline of April 25. Until then, dyed-in-the-wool New Yorkers can only nosh their bagels, sip their chocolate egg cream—and hope.

RITA CHRISTOPHER