For Daily News, a Publisher From Its Past Faces Digital Future

https://www.nytimes.com/2017/09/05/nyregion/daily-news-tronc-new-york.html

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The world has changed since the last time one of New York’s legendary tabloids was controlled by the company that owns The Chicago Tribune.

That tabloid, The Daily News, was founded 98 years ago by a grandson of the publisher who had founded The Tribune. But the Tribune Company sold The Daily News in 1991, so the announcement on Monday that The Daily News had been acquired by Tronc, as the publisher of The Chicago Tribune now calls itself, had a back-to-the-future sound.

Except that journalism in 2017 is not what it was in 1991.

Back then, there was The New York Post and the question of whether New York could still support two tabloids. That question remains. But in 1991, the online world had yet to upend the newspaper industry.

“The definition of success is radically different” now, said James Willse, who was the editor of The News when the Tribune Company sold it in 1991. “I guess the first question the new owner would have to address is how do you keep score. Is it circulation? Is it a web-only play?”

Top executives of Tronc spent time on Tuesday in meetings with employees at The Daily News’s office in Lower Manhattan. The editor in chief, Arthur Browne, said the Tronc officials — including the chairman, Michael W. Ferro Jr., and Justin C. Dearborn, the chief executive — had “expressed a desire for making a go of it on quality journalism.”

Mr. Browne said that Tronc would make investments in technology, starting with a new online publishing software, or content management system. Beyond that, he said, “It’s just too early to say where there might be investment, where there might be changes, where we could get a boost from the other parts of the Tronc empire.”

Todd Maisel, a Daily News photographer since 1999, left The News’s office on Tuesday in Lower Manhattan sounding upbeat about what he had heard.

“This is the best thing to happen to The Daily News in a long time,” he said.

But a veteran Daily News newsroom staff member who asked not to be named, citing concerns about job security, gave a more skeptical account of the staff meeting, saying that the Tronc executives had brushed aside questions about possible layoffs and left the overall picture vague.

The staff member said the Tronc executives talked about the expanded national digital advertising platform that could be created by tying The Daily News to the company’s other major-market print and online holdings.

“When they were asked specifics about the future, they said, ‘We’re looking into that,’ basically,” the staff member said. “The message was that they had no plan as of yet, which we found hard to believe, because how do you buy one of the largest newspapers in the nation and assume our enormous debts, and not have a plan?”

No cash is changing hands in the deal. The real estate mogul Mortimer B. Zuckerman paid $36 million for The Daily News in 1993, after the brief, turbulent ownership of Robert Maxwell, the 290-pound British press baron who had bought the newspaper from the Tribune Company. Mr. Zuckerman said The Daily News remained profitable for many years after he bought it.

The economics of the Tronc deal are fuzzy.

Tronc, in part, is betting on the operational advantages. With the purchase of The Daily News, the company is trying to create a national advertising play, which has been difficult without a hub in New York. Tronc can cut costs at The Daily News, potentially by creating a single sales staff and other moves. And Tronc will also use The News’s printing plant in Jersey City for The Hartford Courant and The Morning Call of Allentown, Pa.

But the calculation also depends on some significant variables.

The deal includes a 49.9 percent stake of the Jersey City property. It is unclear what the property is worth or whether Tronc will leverage the real estate to pay off The News’s pension liabilities. The extent of those liabilities are unknown.

“Of all the things Tronc could’ve done, I’m scratching my head a bit at this one,” said Douglas M. Arthur of Huber Research Partners. He added, “The digital audience they’re gaining is big, but how are they going to monetize it? I’m concerned that the upside from the digital potential is more than offset by increased exposure to a very troubled print paper as well as liabilities that, while not huge, aren’t going away.”

Lance Vitanza, an analyst at the financial research firm Cowen , said that The Daily News would fill what had been “the obvious gap in Tronc’s footprint,” a presence in New York. By taking over The Daily News, Tronc — which also owns The Los Angeles Times — will control newspapers in the nation’s three largest cities.

Still, The News’s circulation is a fraction of what it once was — an average of 271,163 copies a day in September 2016, down from 722,583 copies a day in September 2002, according to the Alliance for Audited Media.

Stephen B. Shepard, the founding dean emeritus of the graduate school of journalism at City University of New York, said that even with investment, The Daily News is “never going to get back to its former glory.”

“It can fill a niche for working class people and people who are interested in sports coverage,” he said. “Print advertising is going away, and they’ve got to get their digital game up.”

New York had more than 20 newspapers when The News made its debut, 14 in Manhattan. “There were millions of readers — immigrants eager to learn English, housewives hunting for sales, job seekers, theatergoers, men in gray flannel suits commuting from the suburbs each morning,” Mara Bovsun wrote in “Big Town, Big Time: A New York Epic, 1898-1998,” a compilation of articles from The News.

But by the time Mr. Willse arrived, “the paper was always sort of the rogue child of the Tribune Company,” he said, adding, “The idea of the paper, a rock ’em, sock ’em, no-holds-barred tabloid, I think, always seemed somewhat alien to the more staid ownership in Chicago.”

Even so, for generations The News was perhaps the quintessential New York newspaper. But it had its origins somewhere in France during World War I, according to “American Journalism,” a history of newspapers and newspapering by Frank Luther Mott.

It was there that two grandsons of Joseph Medill, the founder of The Chicago Tribune, encountered each other. One of them, Joseph Medill Patterson, described a conversation with Lord Northcliffe, the English press baron, who said his Daily Mirror in London was selling a million copies a day and that the United States was ripe for a tabloid. “Then and there the two cousins agreed that as soon as the war was over they would start such a paper in New York,” Mott wrote.

They called it The Illustrated Daily News, published by a subsidiary of the Tribune Company. The 150,000 copies of The News’s first issue sold out. The impressive numbers did not last and neither did the word “Illustrated” in the name.

But The News’s formula did last: big, black headlines; tell-all stories; and, before long, attention-grabbing photographs. For decades, The News’s large circulation gave it the clout to shape the conversation in the city, as it did with the classic headline “Ford to City: Drop Dead” in October 1975. But the exodus to suburbia had weakened its citybound base of working-class readers, and its circulation was in a long slide.

Mr. Browne, the editor in chief, said that no immediate changes in the newspaper’s staff were contemplated because of the deal. He will serve as publisher as well as editor and plans to leave at the end of the year. Mr. Browne, 67, started at The Daily News as a copy boy in 1973 and except for a couple of years at Bloomberg News has spent his entire career there. He said that when he was offered the editor’s job in October, he said he would remain for 18 months.