Front Page vs. Bottom Line

By JANICE C. SIMPSON

REAL ESTATE MOGUL ON THE ROPES. UNIONS BATTLE FOR SURVIVAL. The conflict had the makings of a tabloid-headline writer's dream. But the journalistic juices were not flowing as usual at the New York Post last week, as the gossipy newspaper itself became one of the biggest stories in town. The Post, founded in 1801 by Alexander Hamilton, faced the imminent prospect of closing unless unions coughed up some $19 million in wage and benefit concessions to satisfy the deadline demands of its owner, real estate developer Peter Kalikow. After marathon bargaining, a tentative settlement kept the tabloid alive -- for the time being. "We're optimistic," said Kalikow. "But if the climate gets substantially worse in 1991, that may be another set of facts."

The Post's plight was the latest skirmish in the prolonged battle for survival in New York City's fiercely competitive newspaper market, increasingly an oddity in the era of one-paper monopolies and bland corporate chains. Four papers -- the broadsheet New York Times (circ. 1.1 million) and three tabloids, the Post (504,000), the New York Daily News (1.2 million) and New York Newsday (230,000) -- managed to make it through the booming 1980s. But now the city's economy is in a tailspin, and the tabloids are being dragged down with it. "I don't think there's room for more than two papers in town," says Gary Hoenig, editor of News, Inc., an industry trade magazine.

Even the powerful Times has felt the chill. Its ad linage during the first half of the year was off 13% compared with the same period in 1989. But while nobody doubts that the Times will continue, optimism about the tabloids is hard to find. The Post, a mix of catty gossip columns, conservative editorials and chest-thumping sports reporting, hasn't earned a penny in nearly two decades. Press lord Rupert Murdoch lost $150 million during the 12 years he owned the paper. He was threatening to close it down in 1988, when Kalikow, wealthy and eager to join the glamorous world of publishing, bought it from him for $37 million. Vowing to preserve the city's last conservative editorial voice, Kalikow pumped nearly $100 million more into the paper. He has already cut costs: forcing Post president Valerie Salambier to resign saved $500,000 a year in salary and perks, and Kalikow has said that was merely for starters. But he also said the Post was still losing money at a $27 million annual rate. The nine allied unions facing him, led by their president, George McDonald, believed him, hence their willingness to engage, however tensely, in talks that ended in a package of layoffs, benefit cuts and shortened workweeks, in return for 20% ownership.

A similar battle, for a similar reason, has been under way at the Daily News since January. Once the nation's largest daily, the News lost 4% of its circulation this year alone and is reporting losses that run about $45 million annually. Even before the Post settlement, News executives had declared that they wanted the equivalent of whatever concessions Kalikow obtained. In the meantime, the paper has hired labor lawyer Bob Ballow, a tough Tennessean with a reputation for union busting. "We want to regain management control of our business and eliminate rampant labor abuses," says News vice president John Sloan. Labor leaders contend that the News is trying to destroy the unions, and they have urged major advertisers to boycott the paper until progress is made on contract talks.

The most likely survivor of the turmoil is New York Newsday, a metropolitan spin-off of a successful Long Island-based daily that has won praise for its in-depth coverage of the troubled city. The Newsday edition has yet to turn a profit since it began publishing six years ago, but the Times Mirror Co., which owns the paper, has deep pockets and lower overhead costs than the other owners and may withstand the economic shakeout more easily than they can.

A turnaround won't happen soon. New York's unemployment rate is rising as the local economy mirrors Wall Street's failing fortunes, real estate prices are falling, and advertisers are pulling back. Brassy Bloomingdale's slashed its ad purchases 13% during the first half of the year; Macy's, a mainstay for all four local papers, cut back by 10%. Meanwhile, demographic changes in the city are cutting into circulation as the white ethnics who were once among the tabloids' most loyal readers are replaced by new immigrants. They prefer publications like the bilingual weekly Observateur, which caters to the city's growing Haitian population, and the Korean Chosun Daily News.

Increasingly penned in by these circumstances, Kalikow has tried hard to reinvent the Post for a broader audience. First he went after the yuppie market, hiring ace magazine editor Jane Amsterdam to upgrade the paper's image and introducing a 30-page Sunday edition that featured a travel section, a book review and life-style articles. When those efforts flopped, he replaced Amsterdam with veteran Post newsman Jerry Nachman, who restored the paper's streetwise -- and sensationalistic -- approach (GETTIN' HOSED, screamed a headline when gas prices began to rise after Iraq's invasion of Kuwait). The Post even managed to score a couple of authentic scoops, including the first revelations that Father Bruce Ritter, founder of Covenant House, the nation's largest program for runaway teens, was having sexual relations with some of the young males in the program.

The fact that the tinkering failed, and that the best the Post can hope for is a negotiated break-even future, suggests that the days of noisy debate among mass-circulation papers with different political views may truly be gone. That does not bother press critics like Everette Dennis, head of the Gannett Center for Media Studies, who argued that the loss of the Post "would mean very little" to New York readers because there are so many other news outlets, including six local television stations. That view was unlikely to inspire tabloid headline writers either.

With reporting by Leslie Whitaker/New York