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Shutdown in New York? Daily News Management Says It Will Close the Paper If It Cannot Find a Buyer or Reach Cost-Cutting Pact with Striking Unions

Magazine article Editor & Publisher

Shutdown in New York? Daily News Management Says It Will Close the Paper If It Cannot Find a Buyer or Reach Cost-Cutting Pact with Striking Unions

Article excerpt

Shutdown in New York?

Hemorrharing up to $1 million a day 13 weeks into a strike that has hobbed its advertising and circulation, the New York Daily News decided to close its doors if it cannot find a buyer or reach cost-cutting agreements with nine striking unions.

At a press conference Jan. 16, News publisher James Hoge set no date for closure of the 71-year-old tabloid, once the nation's largest metropolitan daily. But layoff notices were sent to workers in accordance with federal law requiring 60 days notice of plant closings.

The announcement was in stark contrast to the position taken throughout the strike by management of the News and its parent Tribune Company of Chicago that the paper would neither be sold nor closed.

A shutdown or sale is "unavoidable unless the financial losses can be stemmed and the long-term viability of the newspaper can be assured," Hoge said, blaming unacceptably high losses on "strike-related violence and threats" against businesses that advertise in and sell the News.

A somber, regretful Hoge told reporters the "tentative" decision to close the News was approved a day earlier by the board of the Tribune Co.

A shutdown of the News, whose prestrike circulation was 1.2 million, would cost at least 2,500 jobs and would leave New York with the broadsheet New York Times and two tabloids that were each losing money last year, the New York Post and New York Newsday.

Hoge did not disclose losses from the strike but blamed 10-year losses of more than $200 million on the paper's inability to cut inefficiencies.

"In the little time left," he said, "we will make every effort to reach cost-efficient contract settlements and to achieve the other business conditions necessary" for the News' survival.

In a simultaneous announcement, the Tribune Co. said the because of losses at the News, it expected to report a net loss for fourth-quarter 1990. It anticipated a "resolution" of the strike would result in one-time charges that would reduce profits further.

The investment banking firm Lazard Freres & Co. was hired to advise on a possible sale.

"We will entertain any serious offer from qualified buyers," Hoge said.

George McDonald, president of the alliance of nine striking unions, said union leaders would do everything possible to sale the paper and 2,300 union jobs. But he said he was not optimistic.

"There is evidence this is something the company was planning," McDonald said. "The plan has been if they couldn't beat the unions, to close up and blame the unions."

Management has repeatedly denied it intended to close or sell the News.

McDonald offered the News the same kind of concessions the unions gave the Post last year - $20 million in cost savings - after its publisher set a deadline for closing the then money-losing paper.

McDonald blamed the News for refusing during a year of negotiations to propose specific concessions and for insisting on sweeping "management right" provisions.

The News' hiring of the Nashville law firm of King and Ballow, which has a national reputation for union-busting, was the worst mistake management could have made if it wanted to save the News, union leaders contended.

Hoge denied the News had tried to break the unions and said Robert Ballow would remain as the News' chief negotiator.

He said negotiations with the unions had been serious but had not come within reach of agreements on efficiencies the paper needs to eliminate up to $100 million worth of archaic work rules and excessive jobs and pay.

Since the strike began Oct. 25, management had steadfastly refused to consider offers to sell and published using non-union workers and managers.

But after three months of boycotts and hundreds of incidents of violence, prestrike circulation has been cut at least in half and nearly all major advertisers have pulled their ads. …

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