Flash: Businessman Rescues N.Y. Post - At Least For Now

NEW YORK residents are once again witnessing a cliff-hanger drama to rescue one of their four daily newspapers from bankruptcy.

Just a few weeks ago, the paper at risk was the Daily News. The News was saved - for the moment at least - through a takeover by real estate developer Mortimer Zuckerman, who also owns US News & World Report and The Atlantic. Now the paper under the gun is the long-time rival of the News, the New York Post.

Earlier this week New York businessman Steven Hoffenberg announced a package of up to $2.5 million to keep the Post going for four weeks while he examines the paper's financial records to determine if the tabloid can be salvaged. Mr. Hoffenberg hopes to attract other investors to help save the Post.

Press experts say the challenge will be substantial.

"What we seem to have here is a very unfortunate zero-sum game," says Mitchell Stephens, chairman of the journalism department at New York University. "Good news for one paper, the Daily News, for example, seems to be bad news for another paper, in this case, the Post. More and more Americans are turning away from newspapers altogether - to other forms of information and entertainment, from radio and television to video games, magazines, and movies."

The New York Post is the oldest continuously published daily in the United States. Founded in 1801 by Alexander Hamilton, the Post has gone through a succession of owners over its 192-year history, in the process often changing its underlying political identity. Immediately after World War II the paper was considered one of the most liberal editorial voices in New York. In recent years the paper has veered to the right, first under Australian press magnate Rupert Murdoch, and then, since 1988, under Pete r Kalikow, a real estate magnate who filed for personal bankruptcy in 1991.

Throughout the past few years, the Post has struggled to hold its circulation at around 500,000 and attract advertisers. Most of the city's larger retailers have been more inclined to buy ad space from the New York Times, the Daily News, or Newsday, owned by the Times Mirror Company, publisher of the Los Angeles Times.

The Daily News, although in bankruptcy proceedings in past months prior to its acquisition by Mr. Zuckerman, has managed to retain its position as the city's second largest daily, behind the Times.

The Post has reportedly been losing more than $250,000 a week. It was kicked to the edge of extinction last weekend when Bankers Trust Company threatened to cut off its credit line and seize assets.

Over the weekend a majority of the Post's 700 employees voted to accept a 20 percent pay cut - their second in the past three years - to give Mr. Kalikow time to line up a buyer. The newsstand price was increased to 50 cents from 40 cents.

Hoffenberg, the potential buyer, is chairman of Towers Financial Corporation, a $1.5 billion debt-collection service and financial company. Hoffenberg has said that if he strikes a final deal to buy the paper - which could come in the next three or four weeks - he would use his bill collectors as advertising sales people. Hoffenberg and his collection agency have been the targets of a number of probes by federal and state regulatory agencies.

THE big question is who will be the right person to take over the paper, Mr. Hoffenberg or someone else," says popular Post columnist Cindy Adams. "But survive we will - and must. The Post is a tattered, scruffy, loud-mouthed voice in a town that is exactly the same thing." It is, she says, a paper "with heart. It is essential for New York that the Post be saved."

"This is the third time that I've been through" a crisis about saving the Post "in the six years that I've been with the paper," says Sue Daglian, a member of the Post's Newspaper Guild, the union that represents Post editorial and administrative personnel. "There's been a lot of unhappiness here because we're all working under such limited conditions. We're understaffed. We've all had to take pay cuts in the past, and we work very hard to turn out this paper. But we all love the Post and we want to keep

it going."

Demographic studies show that many upper-income businessmen buy the Post on their way home from work. Recent immigrants tend to buy the dozen or so foreign-language papers published here.

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