The Last Stand of the Tabloids

At a time when most U.S. cities boast only a single large-circulation daily newspaper, New York City has four. While the broadsheet New York Times (circ. 1 million) has a comfortable lead in the scramble for local advertising dollars, three of the country's seven remaining big-time tabloids -- the New York Post (circ. 713,786), New York Daily News (1.3 million) and Newsday (633,119) -- are fighting a bruising battle for the rest. If old-style newspaper competition is dying nationwide, New York just might be the site of the tabloids' last stand.

This week the heaviest round yet in the newspaper war was fired when the Post unveiled a new Sunday edition in a $25 million attempt to fight its way into the black. The Sunday edition is the big gun of millionaire real estate , magnate Peter Kalikow, who bought the ailing Post from press lord Rupert Murdoch last year. Kalikow, 46, admits he did not know much about publishing when he took over the paper. "When you fly on an airplane," he says in his thick Queens accent, "you don't know how the plane works. You fly on it because it's going to take you someplace." So far, however, the Post has been speeding Kalikow toward a destination all too familiar to his predecessors: debt city.

In addition to the $37 million purchase price he paid Murdoch, who reportedly lost $150 million in the twelve years he owned the paper, Kalikow has already sunk $17 million into the Post. The Chicago-based Tribune Co., owner of the Daily News, has spent more than $100 million reviving the paper since it nearly folded in 1982, while the Los Angeles-based Times-Mirror Co. has invested about the same amount in its attempt to create a New York paper by expanding Newsday from its profitable base on Long Island.

Though Wall Street analysts are very pessimistic about the Post's future, they agree that a Sunday edition is the newspaper's only hope for survival. The reason: while daily newspaper readership has stagnated all across the U.S. in the past decade, Sunday readership has grown. Sunday editions account for 40% to 50% of the advertising revenue of many dailies. "It's a Hobson's choice," says Gary Hoenig, a veteran New York newspaperman who recently left Newsday to edit a new industry trade magazine called NewsInc. "The Post can't succeed without a Sunday paper, but it is very hard to win over Sunday readers."

Unlike weekday readers in the city, who may buy two papers or more, Sunday readers tend to stick with one. This is a serious obstacle for the Post, which shares many of its daily readers with the Times. Nonetheless, Kalikow is confident that many Times readers will also pick up the Sunday Post and that he can wrest others away from the Daily News. Projecting a 35% to 40% increase in revenue, Kalikow predicts that the Sunday edition will help the Post show a profit in 1989.

Whether or not that optimistic forecast comes true will ultimately depend on the quality of the paper, which is the province of editor Jane Amsterdam. A respected veteran of the glossy Manhattan Inc., Amsterdam has moved slowly since arriving at the Post last May. While she has curtailed most of the Murdoch-era excesses, revived the paper's credibility and boosted staff morale, the Post still retains much of its traditional gamy flavor. DEVIL- LOVING TEXAS TEEN NABBED IN MOM'S SLAYING was the headline over one story last week.

The Sunday edition, which features 30 pages of sports, a section of magazine-style local reporting, a travel section and a respectable book review, will be the real test of Amsterdam's abilities. She has succeeded in recruiting some experienced journalists as her Sunday lieutenants but has apparently had trouble persuading many of the writers she has befriended over the years to appear in the Post. "You do have this fear that she will put the loyalty test to you," says one.

The Post's rivals, meanwhile, are revamping their own Sunday papers. Both New York Newsday and the Daily News have added more sports, entertainment and opinion pages. When the Daily News learned that USA Weekend, the nationally syndicated Sunday newspaper insert, had done a profile of New York power broker Donald Trump especially for the Post's first Sunday edition, the News scooped the competition by rushing its own Trump profile to press a week earlier. The News has also hired three sports writers from the Post, which retaliated by recruiting the News's No. 2 sports editor. For its part, New York Newsday added Pulitzer-prizewinning editorial cartoonist Doug Marlette and bloodied the News by luring away popular columnist Jimmy Breslin.

So far, the only clear winner is the New York newspaper-reading public. By importing its tradition of top-flight local and investigative reporting, New York Newsday has forced the other papers, including the Times, to compete on a higher level, and new columnists introduced by the three tabloids consistently turn out first-rate work.

As quixotic a venture as reviving the New York Post may be, Kalikow enjoys the challenge. He has purchased bound volumes of every issue of the paper dating back to the year it became a tabloid in 1942, and acts as if he is the caretaker of a great American institution. "Why does it have to be a war?" he wonders aloud, walking down a corridor newly decorated with replicas of memorable Post front pages. "I just want to sell on the seventh day."