Magazine article American Journalism Review

International Intrigue: After Establishing the Times as a National Newspaper, the New York Times Co. Decided It Was Time to Go Worldwide. It Took Full Control of the Paris-Based International Herald Tribune by Strong-Arming Its Partner, the Washington Post Co., into Selling Its Half-Interest. Now the Times Co. Is in the Midst of a Three-Way Global Shootout with Dow Jones and the Financial Times

Magazine article American Journalism Review

International Intrigue: After Establishing the Times as a National Newspaper, the New York Times Co. Decided It Was Time to Go Worldwide. It Took Full Control of the Paris-Based International Herald Tribune by Strong-Arming Its Partner, the Washington Post Co., into Selling Its Half-Interest. Now the Times Co. Is in the Midst of a Three-Way Global Shootout with Dow Jones and the Financial Times

Article excerpt

When Arthur Sulzberger Jr. visited the International Herald Tribune offices in Paris last July to host a town hall meeting, he faced a far less hostile crowd than the first time he met with the staff three years ago. Back then, he was the new owner, the chairman of the New York Times Co. in red suspenders, standing before them, backslapping fellow executives and speaking bad French. Michael Golden, the Herald Tribune's publisher and Sulzberger's cousin, recalls the meeting as "very difficult," mostly because the Times had wrested full control of the paper from its coowner, the Washington Post Co. "It was as if your parents got divorced," recalls one longtime staff member, "and the bad parent got custody."

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But the bad parent turned out to be not so awful after all. The Times Co. has poured more than $100 million into the paper: $65 million to buy the Post's share of the self-anointed "world's daily," the rest in investments, sustaining multimillion-dollar losses annually to wage a global newspaper war against the international editions of the Wall Street Journal and the London-based Financial Times.

After successfully expanding the Times' national reach, Sulzberger was willing to alienate the Grahams, longtime family friends and the Post's majority owners, for unfettered access to expand the Times worldwide, says Alex S. Jones, coauthor of "The Trust," an exhaustive history of the Sulzbergers. Though skeptics question the Times' ability to remake the Tribune into a profit powerhouse, "immensely profitable may not be necessary," Jones says. Acquiring the Tribune has reinforced "the Times as the national and international news leader. It's a brand choice."

In the last two years, the Tribune has undergone a profound transformation and its greatest expansion in the paper's 118-year history as it tries to knock its rivals out of the market. The spoils are significant. The Tribune offers advertisers one of the world's most coveted demographics; the typical subscriber is an affluent, highly educated, well-informed, nomadic 46-year-old European senior manager with a $1.02 million investment portfolio, according to the paper's most recent reader survey. "It's a great audience; it's even better than the New York Times!" says Publisher Golden, as close to gushing as he gets, sipping coffee in shirtsleeves and slacks--he had ridden his bike to the interview--in his neighborhood cafe across the street from the Luxembourg Gardens. The Herald Tribune's readership is "highly educated, largely managerial and highly professional in business, government, education and NGOs [nongovernmental organizations], mobile and wealthy. It's great.'"

Considering the relentless newspaper industry-wide decline in advertising revenues and circulation, purchasing the Tribune was a gamble, "but we didn't place that bet thinking it wouldn't work out," Sulzberger says. "We owned 50 percent of a declining asset that was going to continue declining unless the dynamic [changed]. We set out to change the dynamic. Are we talking about massive amounts of money? No, we're not, given the size of the New York Times Co. There may come a time [when] it doesn't work, and you say, 'That wasn't working, let's move on.' But so far, we're delighted with the results, with how it's positioned, and we think it has a great future."

More than any other English-language newspaper abroad, the Tribune has a fiercely loyal following and a rich history that goes back to 1887, when horse-drawn carriages delivered the first four-page issues of the New York Herald's European edition to newsstands and hotels in Paris' most elegant quarters. Over the years, and under several owners, the Tribune became a quirky, quaint, parochial newspaper with deep roots in Paris for a growing number of Americans traveling abroad, featuring humorist Art Buchwald, whose columns helped make the paper and the City of Light synonymous. …

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