NEW YORK (Reuters Breakingviews) - Maybe third time is a charm for Michael Ferro. The chairman of Tronc bought the New York Daily News from real-estate mogul Mort Zuckerman for $1 and the assumption of its liabilities. It’s a victory of sorts for the Chicago publisher, whose stock hovers near the price at which it fended off a takeover from Gannett. But it’s another sad marker in the decline of print newspapering.
Zuckerman, who has owned the Daily News since 1993, flirted with selling the paper before only to pull it off the market two years ago. That New York still supports both the Daily News and its cross-town rival, Rupert Murdoch’s New York Post, in the digital age is a near miracle. Many American cities can barely support one local newspaper, let alone two tabloids.
Perhaps that is why this go-around Zuckerman offloaded the Daily News - famous for its “Ford to City: Drop Dead” headline - for chump change and a nearly 50 percent stake in the New Jersey printing facility sitting on valuable waterfront property. Tronc is assuming nearly $30 million in pension liabilities and other obligations. The paper has endured bruising layoffs yet won a Pulitzer Prize it shared with ProPublica last year.
Tronc tried to buy gossip magazine US Weekly and a Chicago competitor the Sun-Times but failed. Snapping up the Daily News adds another big city to a portfolio that includes the Los Angeles Times and the Chicago Tribune in a bid to go after national advertising dollars. Yet that strategy eluded Tronc’s predecessor, Tribune.
Ferro managed to swat away Gannett’s entreaties last year. The largest U.S. newspaper chain offered to buy Tronc for $15 a share, and might have gone higher. It pulled its bid after Tronc’s foot-dragging and its own prospects began to turn. Gannett could possibly return.
Trouble is Tronc’s results have been dismal. Total revenue for the second quarter fell nearly 9 percent to $370 million on a 15 percent drop in advertising revenue. Adding a New York outpost may have some long-term appeal, but time is no friend to the fast-extinguishing print newspaper industry.
The New York Daily News “Drop Dead” headline has been corrected in the third paragraph.