For now, St. Louis is one-paper town. 134-year-old daily has new management, but no funds to publish

Two days before the St. Louis Globe-Democrat suspended publication, it published a front-page story about its competitor's plan to eliminate 90 union jobs. The St. Louis Post-Dispatch published nothing about its simmering labor negotiations. The Globe's coverage, a product of competitive pique, illustrated St. Louis's advantage of having more than one independent newspaper.

That advantage may have disappeared last week, although efforts are being made to resurrect the 134-year-old conservative voice. On Dec. 6, Jeffrey M. Gluck -- the last person to attempt saving the Globe from the daily-newspaper graveyard -- was unceremoniously removed as publisher. He was charged by a bankruptcy judge with ``incompetence and gross mismanagement.''

Judge David P. McDonald appointed retired bank executive Edwin S. Jones trustee of the Globe, but not before the paper's credit line with Citicorp Industrial Credit was severed, halting publication on Saturday, Dec. 7. An effort by the paper's independent carriers association to resume publication with a volunteer editorial crew was unsuccessful.

Mr. Jones is one of the city's senior corporate statesmen, serving as a director of a number of blue-chip St. Louis firms, including McDonnell Douglas and Anheuser-Busch. His appointment was hailed by lawyers who pressed for Mr. Gluck's removal, but Jones is circumspect about the chances to revive the daily. ``It is too early to make any statement about the fate of the paper,'' Jones told reporters Monday. ``We're just beginning to learn what all is involved.''

If the paper is to publish again, Jones is going to have to arrange the financing. He has not yet commented on this aspect, making further publication tenuous. There is the possibility of selling the paper, but satisfying the creditors could complicate such a move.

According to a financial inventory filed with the court in mid-November, the Globe's liability exceeded $8 million as of Aug. 19, the day 14 employees filed a petition to force the newspaper into involuntary reorganization. The newspaper anticipated less than $3 million in advertising and circulation income to cover these charges. The employees took the unusual step of forcing the newspaper into bankruptcy because of a blizzard of bouncing payroll checks issued by the paper in July and August. Globe che cks were dishonored more than 5,600 times during the first eight months of 1985.

The paper's difficulties continued after the filing of the petition. In testimony Nov. 26 on motions to remove Gluck, Globe financial officer David Metzler acknowledged the paper was already five weeks behind in wages, contrary to an order by Judge McDonald to bring payroll for the paper's 318 employees up to date. Metzler said the paper lost $1.7 million in 1984, and $1.4 million in the first eight months of 1985.

Satisfying creditors' claims will complicate prospects for a sale. In a move that suggests such a sale is still possible, a newly formed company, Veritas Corporation, bought a minor interest against the Globe in order to join the effort to oust Gluck. Lloyd A. Palans, an attorney representing Veritas, will not disclose the identities of individuals involved in the company, but the group is said by sources to represent investors who sought to buy the newspaper from Gluck earlier this year.

John Morton, a newspaper analyst for the Washington-based investment firm of Lynch, Jones & Ryan, said in a phone interview: ``There shouldn't be a buyer for the property now.'' Mr. Morton contends the St. Louis market cannot support two competing dailies.

The Globe, once the circulation leader in St. Louis, was published until 1984 in conjunction with the Post, flagship of the Pulitzer Publishing Company. The two papers were united in a joint operating agency, a legal monopoly sanctioned by the Newspaper Preservation Act of 1970. The morning Globe was slated to close at the end of 1983, but pressure from the US Department of Justice forced the Newhouse chain to find a buyer. The paper operated independently after Newhouse sold it to the Glucks for $500,0 00 -- $50,000 down, according to reliable sources. Newhouse retains a profit-sharing interest in the Post.

The St. Louis dailies were the first of 46 jointly operated newspapers to return to competition because of government intervention. Gluck's purchase of the paper raised hopes that a daily newspaper monopoly could be avoided, but under his management circulation slumped from 221,000 in March 1984, to less than 162,000 in October 1985. The rival Post has reported unaudited daily sales of over 306,000 in October, according to a Post spokesman, up from about 250,000 in March 1984.

Stephen Barnett, a professor of law at the University of California, Berkeley, and a longtime critic of joint-operating agencies, argues that ``it remains to be proven that markets like St. Louis can't support two daily newspapers.''

Mr. Barnett faults the Justice Department for not making Newhouse sell its interest in the joint agency, which would have given a new owner access to the Post's printing records and business staff. Instead, Gluck was required to rebuild all noneditorial departments and contract with commercial printers.

Morton said that the Globe's collapse suggests a different lesson for the future: ``The Justice Department isn't doing someone like Jeffrey Gluck a favor by forcing that newspaper on the market and allowing somebody who is not sophisticated about the newspaper business to sink his personal fortune into it and lose it.''

Three former Globe employees charge that Gluck may have lost prestige, but not money. They allege in a suit filed in US District Court Nov. 14, that Gluck and his wife, Debra, violated federal racketeering laws by scheming to loot Globe assets. The Glucks have acknowledged taking more than $550,000 in compensation and other payments since they took over the newspaper, but they also contend they have invested more than $750,000 into the company.

A deflated, soft-spoken Gluck told a television interviewer Monday, ``I think Jeff Gluck didn't bring enough money with him, and that he should be faulted for that.''