Hurdling Another Big Barrier

By WILLIAM A. HENRY III

New York's Daily News wins a reprieve as its unions okay cuts

For months, the staff of the New York Daily News had gamely chased scoops while under sentence of death. Forever facing some new and seemingly more inescapable deadline for the paper's folding, employees searched determinedly for a glimmer of hope. Said an editor: "There is supposed to be a series of psychological stages in confronting death--anger, denial, depression and so on, until acceptance. Here there was never acceptance." A writer characterized the mood as "Apocalypse: Never Mind." But last week, when the paper's deliverers became the last of eleven unions to accept a cost-cutting plan, the jubilant mood was more like "Apocalypse: Never!"

Before that happened, there had been plenty of reason for spirits to falter. The News lost $12.6 million in 1981, and its owner, the Chicago-based Tribune Co., estimated that losses could more than double in succeeding years. Unwilling to battle that trend, the Tribune Co. put the paper up for sale last Dec. 18. After three fallow months, the company announced that Texas Wheeler-Dealer Joe L. Allbritton was "buyer of last resort." But when Allbritton demanded a wage rollback and a one-third slash in the $190 million payroll, union leaders balked, and the "last resort" disappeared. Everyone braced for the final step in a grim scenario that had been played out in Washington (the Star) and Philadelphia (the Bulletin), and that was soon to be repeated in Cleveland (the Press). Instead, the Tribune Co. reversed field and proclaimed it would keep operating indefinitely, but with a daunting proviso: the city's traditionally intransigent news paper unions, which had watched six papers die since 1950, would have to endorse a prompt elimination of about 1,300 of the paper's 5,000 jobs. Warned William Kennedy, president of the pressmen's union: "It may not be worth it."

But Kennedy and his fellow union leaders ultimately came to the rescue. The Tribune Co. won substantially everything it asked for. Total savings in jobs, over time and other costs: an eventual $50 million a year, the biggest giveback in American newspaper history. Exulted one senior executive: "This is historic. This is the first time a major newspaper has come so close to disaster and averted it by working out a survival operation with the very unions that used to kill papers."

One reason the unions cooperated was that management shared the burden. During the past year, a number of News executives had their pay temporarily frozen or cut, arid more than 40 of them, including longtime Editor Michael O'Neill, 59, were eased out. More important, nearly all departures by union members were won voluntarily, and were accompanied by "golden handshakes" averaging more (sometimes much more) than $30,000 per person. Some senior reporters walked away with two or three years' pay. Total severance cost: nearly $50 million.

Despite the salvage efforts, the News is still beset by typical problems of beleaguered big-city dailies. The paper's blue-collar, middle-income constituency continues to shrink, driven out of New York by high crime, high taxes and the high cost of in-town living. Indeed, although the Sunday News (circ. 2 million) remains the nation's largest weekend paper, the weekday News (circ. 1.5 million) was passed by the Wall Street Journal (circ. 2 million) in 1979.

Moreover, while the News reaches an impressive mass audience, advertisers increasingly use newspapers as a class rather than a mass medium. They seek "quality" in readers (age, income, education) rather than sheer quantity. Thus though the News is 61% larger than the New York Times (circ. 947,000), it draws barely half as much advertising linage: 31% vs. 61% of the total market, with the remaining 8% going to the embattled New York Post (circ. 904,000).

More subjectively, the News is widely thought to have lost its wham-bam personality and to have settled somewhat ineffectually into a shadowy area between the good gray lady, the Times, and the sensationally yellow Post. Editor James Wieghart, 49, says the News "needs to remember the ways it was good in the 1940s and 1950s." He is stepping up crime and entertainment coverage, and transforming the business pages to emphasize consumer news and money management. But even if those measures restore the News to the vigor of old, the audience for such a paper is not as appealing to advertisers as it was 30 years ago. Post Publisher Rupert Murdoch, also plagued by heavy losses, has predicted repeatedly that only one mass-appeal newspaper will survive in New York. Sums up a Newspaper Guild official: "The News is doing the right things. But whether this is a reprieve or true salvation, it is too soon to tell."

Nor is it clear whether the sort of sacrifices made by union workers and management at the News will inspire turnarounds elsewhere. In St. Louis the Post-Dispatch and the Globe-Democrat, both faltering, were boosted by winning wage concessions a year ago. But in Detroit, where both the News and the Free Press lost millions last year, unions turned the two papers down on concessions unless the closely held News opened its books. That paper has adopted costly gimmicks to maintain its wafer-thin edge in circulation (629,392 to 627,640). The Baltimore News American and the mildly resurgent Boston Herald American, both Hearst papers, are staffed so leanly that further major cuts would not be practical.

Perhaps most sobering is the case of a third Hearst paper, the Los Angeles Herald Examiner (circ. 285,000), which five years ago won the right to introduce any modern equipment it chose and to reassign any employee without bargaining. The staff was cut 10%, from 865 to 779. Yet the paper remains mired in the red. That may be a further warning signal for New York's News, which even in its exuberance does not expect to return to profitability until sometime in 1984. --By William A. Henry III. Reported by Harry Kelly/New York

With reporting by Harry Kelly

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