How New York Newsday Died—And Why It Didn’t Have To

New York Newsday had be­come the most enterprising and in many respects the best daily newspaper in New York City. In investigative reporting, liveli­ness, experimentation, in serving the New York City urban core, just as New York Newsday‘s advertisements said, it was “ahead of the Times.”

But on July 14, 1995, the parent com­pany of New York Newsday, the Los Angeles-based Times Mirror Co., an­nounced that the paper would no longer be published. As The New Yorker put it in a lengthy memorial (7/24/95): “It is bad enough when mediocre papers fail…but when one of the best papers in the country folds it is time for something close to despair. New York Newsday was the best, by far, of the three tabloids, promoting a consistent combi­nation of investigation, accuracy, speed, civility and humor, and its ownership stayed properly aloof from the news columns and from city politics.”

To understand the end of New York Newsday, it’s important to comprehend fully why it began, and that is marbled in the politics of media. For its 10 years of journalistic life, New York Newsday was the more nationally visible offspring of Newsday, the Long Island, N.Y. tabloid founded in 1940 by Alicia Patterson. She was the independent-minded daughter of the New York Daily News‘ founder, Capt. Joseph Medill Patterson, and might have eventually inherited control of that paper. But rather than waiting, she struck out on her own on Long Island, the mostly suburban island that stretches east from New York City.

Long Island Newsday, launched in a converted auto dealership in Hemp­stead, was born in Patterson’s journalis­tic image. “Alicia wanted her paper to be feisty and willing to shoot at kneecaps—not stuffy and tied to the establishment,” Newsday reporter Robert Keeler wrote in his book Newsday: A Candid History of the Respectable Tabloid.

But with Patterson’s death in 1963, control of the paper was assumed by her husband and co-founder, Harry F. Guggenheim. Guggenheim, an avid avia­tor and race-horse owner, was the heir to the vast Guggenheim mining fortune. While Patterson was a New Deal liberal, Guggenheim was a conservative who served as President Hoover’s ambas­sador to Cuba.

Near the end of his own life, accord­ing to Keeler, Guggenheim was “con­sumed with the fear that Newsday was lurching leftward under Bill Moyers,” Newsday‘s publisher at the time. So in 1970, Guggenheim sold Newsday to the Chandler family’s Times Mirror Co., because, wrote Keeler, “Harry just knew that Norman Chandler would run News­day in the proud conservative tradition of the Los Angeles Times.”

Long Island Newsday changed with the Times Mirror takeover, becoming less interested in challenging power. For instance, in 1978 the newspaper itself set up a committee of “100 top-echelon exec­utives” to push for high-technology de­velopment of Long Island; the commit­tee was chaired by Long Island Repub­lican wheeler-dealer William Casey, soon to become President Reagan’s CIA director. Newsday became an unceasing promoter of nuclear power on Long Island, and became cozier and cozier with local development interests (Extra!, 9/92).

But the Chandlers may have had an­other motive besides dollars in acquiring Newsday: The family was still steaming over what they considered an attack on their turf when the New York Times had the nerve to start a West Coast edition in 1962. As Nicholas Coleridge wrote in his book Paper Tigers: The Latest, Greatest Newspaper Tycoons, “When the idea of New York Newsday was first suggested to Otis Chandler (Norman’s son and suc­cessor), the prospect of newsstands sell­ing one of his newspapers right across the sidewalk from the New York Times building gave him immediate gratifica­tion. He liked the idea that every morn­ing on his way into work, [Times pub­lisher] Punch Sulzberger would see the newspaper trespassing on his patch: It compensated for years of East Coast snobbery.”

And on an island with clearly finite borders, Newsday had a limited circula­tion base. In the 1970s it promoted con­struction of a bridge running north to Connecticut; that, like the nuclear power development Newsday pushed, never came about. So the paper began looking westward—toward New York City.

Newsday publisher David Laventhol, who “hatched” the idea of New York Newsday, wanted to create “a western growth corridor,” noted New York Newsday reporter Michael Powell (Newsday, 7/16/95). As a former editor of the New York Herald Tribune—a lively, innovative broadsheet that lost a fight for survival with the New York Times—Laventhol’s “mind played still with New York City, the Tribune‘s loss an unfinished chapter.” Several Herald Tribune veterans became part of the new paper, including columnist Jimmy Bres­lin, reporter Mickey Carroll, and Don Forst, who Laventhol made New York Newsday‘s editor.

Changing the Ribbon

While Newsday‘s bold journalistic per­sona—especially under Patterson—and the awards it won for investigative re­porting gave it a solid reputation among media insiders, it was not widely known elsewhere. It was a regional paper, es­sentially confined to Long Island’s sub­urban counties of Nassau and Suffolk. Reporters setting up interviews often had to explain that they were calling from Newsday “on Long Island.”

New York Newsday changed all that. The news ribbon on New York City’s Times Square, for many years naturally run by the New York Times, was taken over by New York Newsday: a metaphor for a big transition that was occurring in media power in the world’s media capi­tal. It made sense that the Australian hero’s love interest in the 1986 movie Crocodile Dundee was a Newsday re­porter; New York Newsday was becom­ing a symbol of American journalism.

New York Newsday—up against stiff competition in the New York City mar­ket and facing the often stuffy and very much establishment-tied New York Times—was a revival of the Alicia Pat­terson ideal, a feisty, independent paper that took on the powers that be. The only New York City newspaper to use color on its front page, its prose was also full of color and life; not just in the work of a bevy of columnists—many snagged from other city papers, like Sydney Schanberg, whose column was dropped by the New York Times for looking too closely at real estate interests—but in the work of its young and remarkably di­verse staff of reporters.

Starting a fourth newspaper in New York at a time when few cities have even two, and metropolitan dailies continue to expire, sounds terribly risky. But in 1985 it didn’t look like either the New York Post or Daily News would make it—and Newsday planners expected and contin­ued to anticipate that happening. Who could have expected that both the Post and the Daily News would be rescued?—with the Post returning to the media empire of Rupert Murdoch, who once again wanted to use it as the New York City instrument for his right-wing politi­cal agenda, and the Daily News being bought by Mortimer Zuckerman, who, not too incidentally, is neck-high in New York real estate development.

The Post and the Daily News didn’t disappear. But even in a crowded field New York Newsday was heading up. While Times Mirror lost $100 million on its new paper over 10 years, the invest­ment appeared on its way to paying off. Its advertising was slowly growing and circulation, which reached a weekday peak of 278,000 after the 1991 Daily News strike, was hanging in at 228,000. “The paper…was finally close to break­ing even,” former Newsday columnist Allan Sloan wrote at his new stand at Newsweek (7/31/95). “Confidential Newsday documents projected only triv­ial losses for New York this year.”

Cereal Killer

So why kill it? The magic words: profit margin. At the time of the New York Newsday closing, Times Mirror‘s profit margin (figured as a percentage of rev­enues) was 9 percent to 10 percent, about 40 percent lower than the industry average. Since stock traders look closely at profit margins when buying stock, even a breaking-even paper would de­press the stock price—and thus make the Chandler family unhappy.

As former New York Newsday colum­nist Jim Dwyer put it (Time, 7/31/95): “They wanted to do a ritual slaughter for the amusement of Wall Street. They’ve done it, and the 80 children of the Chandler family made lots of money.”

The instrument of the sacrifice was Mark Willes, Times Mirror‘s newly in­stalled chief executive. The former vice chair of General Mills—described by New York Newsday‘s Pete Hammill as “some guy who came from the cereal business” (7/16/95)—had no newspa­per or media experience whatsoever be­fore he came to Times Mirror in June 1995 and the next month ordered the close of New York Newsday. On a tour of the paper the day before, he had lifted spirits by accepting a button from a re­porter that said “New York Newsday: Too Smart To Die.”

In a post-closing editorial (8/14/95), The Nation contrasted Willes with

an­other Californian, Citizen Kane. Willes killed his paper because even though it was headed past the break-even point it would never earn “an appropriate rate of return.” Remember Kane? When told he’s losing a million a year he smirks and responds, “At the rate of a million dollars a year, I’ll have to close this place—in 60 years.” And that’s the difference between Rosebud and Raisin Bran.

The closing of New York Newsday cost Times Mirror some $150 million, in­cluding expensive buyouts for employ­ees—more than the paper had lost in its 10-year life. But at the same time, Times Mirror stock went way up. From the time Willes took over through the end of November, Times Mirror stock jumped from $18 to $31 a share, raising the com­pany’s market value by more than $1 bil­lion—mostly in the days following the closing. This fattens the portfolios of the company’s principal owners, the Chan­dlers—and Willes himself, who receives stock as part of his compensation.

Death for Taxes?

But for the stock to stay up, it needs to have entities with which to make money. “Times Mirror executives said much of the improvement in earnings needs to come from Newsday and the Los An­geles Times,” Newsday reported in its own piece on the $300 million loss (10/ 25/95). Can Long Island Newsday, with its tight circulation limits, and the in­creasingly challenged Los Angeles Times serve as the engines for profit-wild Times Mirror?

“Closing New York Newsday will ex­pose Newsday‘s Long Island heartland to the New York Times, which was so terrified by New York Newsday that it started to cover New York City better,” ex-columnist Sloan noted in Newsweek (7/31/95). “Now the Times can use the lesson to clobber Newsday in Long Island. Mark Willes’s short-term finan­cial discipline will cost Newsday dearly in the long run. An example, once again, of how following numbers blindly can lead you off a cliff.”

Newspaper financial analyst John Morton had a similar analysis (American Journalism Review, 9/95):

Newsday had spared little expense in establishing the paper, hiring numerous high-sala­ried columnists for example, and send­ing reporters from both Newsdays to cover the same events. Trimming some of the excess, rather than wielding a bolo knife, is the kind of management that might have kept a valuable prop­erty—and an excellent paper—alive until Times Mirror‘s original strategy finally paid off. Creating a new media franchise is always a long-term investment. USA Today, for example, took 10 years to turn a modest profit. What Times Mirror did, in effect, was to decide to ‘sell low’ when it killed New York Newsday.

And it’s a murder that didn’t have to happen—even to satisfy Wall Street’s de­mands. The Washington Post Company came up with an offer to rescue New York Newsday by buying it and, if necessary, all of Newsday, “and all of Times Mirror‘s Eastern papers,” as former Newsday columnist Sloan reported in Newsweek (7/31/95), a Post Co. publication.

Martha Goldstein, Times Mirror‘s di­rector of corporate communications, told FAIR that Long Island Newsday “was not and is not for sale,” and that New York Newsday is “not a stand-alone edi­tion of Newsday” and thus could not have been separately sold.

But according to Newsday sources, Times Mirror rejected the Washington Post offer because earlier in the year Times Mirror sold its cable TV systems in a $2.3 billion deal to Cox Com­munications. Thus Times Mirror needed a tax loss, not more money coming in—which prevented the rescue of New York Newsday.

Vanishing Voices

So it may have been for the sake of a tax write-off that New York was deprived of a chorus of unique voices. Times Mirror‘s buyout offer resulted in an exodus of more than 200 journalists from the remaining Newsday staff—including columnists Schanberg, Dwyer, Gail Coffins, Nicholas Karas, Marilyn Goldstein, Lars-Erik Nelson and Mike Lupica, among others.

Newsday editors by the score said goodbye. So did cartoonist Tom Darcy, art critic Amei Wallach, a dozen photog­raphers, Washington correspondents Saul Friedman and Susan Page. All this knowledge—and New York Newsday—gone. There was irony in some of the de­partures: Award-winning investigative re­porter John McDonald, for instance, headed off to the Orange County Register, the chief competitor of the Los Angeles Times.

But perhaps the most important voice lost is the voice of the urban core. As City Hall reporter Michael Powell wrote in Newsday (7/16/95), New York Newsday “all but rediscovered the mil­lions of New Yorkers who live below the poverty line.” It showed “a willingness often rare in an American journalism in­creasingly corporate and safe, to snub noses at the very powerful.”

Or in the words of former New York Newsday reporter David Holmberg (let­ter, Columbia Journalism Review, 11/12/95), a veteran of the deaths of other papers:

The death of New York Newsday was perhaps the saddest—next to the Washington Star—because it made such an enormous contribution to the city in such a short time. Perhaps it’s romantic and ahistorical to say that no newspaper deserves to die. But New York Newsday certainly didn’t. It de­served to live and flourish in the city it defined so well.

Karl Grossman is a professor of journalism at the SUNY College at Old Westbury and a reporter and columnist for the defunct Long Island Press.