Magazine article Editor & Publisher

The Fourth Estate

Magazine article Editor & Publisher

The Fourth Estate

Article excerpt

The business of newspapers Black eyes Observer:Seeing new N.Y. daily?

The rough-and-tumble New York media landscape could be on the verge of a shakeup. At presstime July 16, media mogul Conrad Black, who has longed for a piece of the city's daily newspaper market, was expected to announce that he will buy The New York Observer, a weekly, with thoughts of turning it into a daily, according to a Business Week report.

The report cites a source close to the deal who says Hollinger International, where Black is chairman, will acquire 100% of the company, giving founder Arthur Carter a combination of cash and Hollinger shares.

Hollinger confirmed recently that it's in talks to buy or partner with the Observer, a pink-paged broadsheet that takes on the rich and powerful on a regular basis, following media reports of a possible deal.

Calls to the Observer and Hollinger were not immediately returned July 16.

Initial reports of Black's interest were greeted with bafflement. Some observers, while they'd like to see more journalists put to work, say there's no room for a fourth daily in a market where The New York Times, the New York

Post, and the Daily News already are elbowing each other for readers and advertising dollars.

Hollinger has 85 dailies, including the Chicago Sun-Times, The Jerusalem Post, and The Daily Telegraph in London. In 1998, it posted earnings of $197 million on revenues of $2.2 billion. Carter founded the privately held Observer in 1987.

Analysts, media insiders, and Observer staffers say the proposal raises endless questions. How would the weekly, known for its biting, after-the- fact commentary and its limited readership (the unaudited Observer claims a circulation of 50,000), turn out a daily paper, and what audience would it go after? Would Black, known for his hands-on style, make the left- leaning paper a bully pulpit for his conservative views? And is Black, already swallowing expected losses from his newly launched National Post in Canada, prepared to make another big investment?

Gerald Reilly, a Greenwich, Conn.-based newspaper consultant, calls the partnership idea "an odd coupling, but stranger things have happened.

"I'd be very surprised if the two did an awful lot together," he says. "They're both pretty smart investment people. They would not, I'm sure, ever launch a daily."

Are observers underestimating Black, with his penchant for running big- city metros and taking risks? …

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