April 26, 2010 3:00 am

Manhattan showdown will be a bare-knuckle fight

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Rupert Murdoch's quest to destroy the New York Times - seen by the city's media establishment as its last great newspaper war - has taken on a 19th century flavour ahead of News Corp's launch of the Wall Street Journal's 12-page New York section today.

Representatives of both papers took the fight to the streets, with Times employees thrusting their paper at passers-by outside News Corp's offices. Blocks from the Times' headquarters, teams clutching Apple's iPad digital tablets fanned across Times Square like Dickensian newspaper boys, hawking subscriptions to the Journal's iPad edition.

For many, the ink-stained fight is quixotic after three gruelling years for US newspapers in which advertising has fallen 43 per cent, the publishers of the Chicago Tribune and Philadelphia Inquirer have gone bankrupt and titles from the New York Sun to the Rocky Mountain News have closed.

Yet the Manhattan showdown may only be the beginning of a nationwide fight for print readers.

Executives of Dow Jones, the News Corp unit that owns the Journal, have looked at launching editions in regions including Denver, Detroit, Seattle, Los Angeles and Chicago, whose local papers are among those struggling with heavy debts, high costs and a print advertising drought, one person familiar with the plans said.

The discussions at Dow Jones, which at one point flirted with shutting its unprofitable European edition, have been shelved after executives failed to find a profitable approach, according to two people briefed on the discussions.

Dow Jones declined to comment, but Les Hinton, its chief executive, told Advertising Age last week it would explore a broader regional expansion if New York proved a success.

In the 1990s, during frothier advertising markets, the Journal ran editions from Florida to the Pacific Northwest.

But the idea of rekindling a local print strategy now has baffled analysts, who have watched readers defect to digital platforms.

News Corp is said to be backing the Journal's New York edition with $30m over two years. "I'm not convinced they can make it pay," said Alan Mutter, a media consultant and former San Francisco Chronicle editor.

An upcoming book, War at the Wall Street Journal , says the title lost $80m last year, which two former employees confirmed. A Dow Jones source said the Journal is now profitable, however.

"I don't understand why they're doing this other than to give the New York Times a hard time," Mr Mutter said, adding that Mr Murdoch may hope to distract the Times from the national stage, where he has positioned the Journal to become the general interest news leader.

Scott Heekin-Canedy, president of the New York Times media group, said it would not be trapped into becoming a more parochial paper. "Our eyes are wide open and we're not walking into anything," he said.

According to one former News Corp employee, the next battleground could be California. Both papers have small sections in the San Francisco Bay area, even though it is the home of Craigslist, the website often blamed for killing metropolitan newspapers' classified advertising revenues.

"They are low-cost experiments," said Ken Doctor, an Outsell analyst and author of Newsonomics . "As metro dailies further falter, it will be a learning experience for both companies as to whether remaining print readers decide they want to keep getting two newspapers a day."

Back in New York, even as News Corp executives offer deep discounts to snatch advertisers away, the Times insists it will not get sucked into a price war.

But the battle could put further pressure on an industry just showing signs of recovery. The New York Times returned to profit in the first quarter, in spite of a 12 per cent year-on-year decline in print advertising. The Journal is expected to report a 25 per cent improvement in print advertising for the same period.

Janet Robinson, chief executive of the Times, said she was ready for the fight: "We don't shy away from the competition. We never have. We never will."

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