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Toronto Sun’s Owner Confirms Exploratory Talks on Buying L.A. Paper : Canadian Firm Interested in Herald Examiner

Times Staff Writers

The owner of the Toronto Sun, a saucy Canadian tabloid heavy on pictures and crime stories, confirmed Thursday that it is exploring the purchase of the Los Angeles Herald Examiner.

Toronto Sun Publishing Corp. stressed that its discussions with Hearst Corp., the media giant that owns the Herald, were exploratory. “There are no ongoing discussions,” said John Rowsone, executive assistant to President J. Douglas Creighton. “At this point, it is all quite premature.”

For the record:
12:00 AM, Mar. 11, 1989 FOR THE RECORD
Los Angeles Times Saturday March 11, 1989 Home Edition Business Part 4 Page 2 Column 5 Financial Desk 2 inches; 40 words Type of Material: Correction
In a story in Friday’s Business section, the financial results of Canada’s Sun newspapers for 1987 were incorrectly converted from Canadian to U.S. dollars. At current exchange rates, the papers posted operating earnings of $25.8 million (U.S.) on revenue of $150.9 million (U.S.).

According to a report in Thursday’s editions of the Toronto Globe and Mail, the discussions between Hearst and Toronto Sun executives at least partly concerned the possibility of converting the Herald Examiner to a tabloid.

“Hearst has been looking at changing the Herald Examiner into a tabloid, and they’ve been up here and we’ve been down there looking at it . . . and to see the city,” Creighton said in the Globe and Mail.

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One alternative said to be under discussion would have the Sun teaming up with Hearst to jointly run the Herald. Hearst executives didn’t return telephone calls seeking comment Thursday.

Founded in 1971 by 67 reporters from the defunct Toronto Telegraph, the Toronto Sun is known for its racy style similar to Britain’s tabloids and the New York Post.

One of the Sun’s best-known features is a provocatively attired “SUNshine Girl,” published daily on Page 3. The Sun also runs a daily photo of a “SUNshine Boy” further inside the paper.

The paper, Canada’s third-largest daily, focuses heavily on local crime stories, accompanied by blaring headlines. National and international events receive perfunctory, or decidedly unusual, treatment. For example, coverage of a recent economic summit conference in Toronto included daily horoscopes of the seven leaders.

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The formula is highly profitable. At current exchange rates, the Sun newspapers in Toronto, Edmonton and Calgary posted operating earnings of $37.2 million (U.S.) in 1987 on revenue of $2.17 million (U.S.) “They are aggressive and smart, probably the best tabloid publishers in the country,” said James Cole, a media industry analyst with the Canadian investment firm Brown Baldwin Nisker James Capel Inc. Cole estimated that 70% of the profits came from the flagship Toronto Sun, with daily circulation of about 306,000. Its parent company, Toronto Sun Publishing, is 51% owned by the big Canadian media firm Maclean Hunter Ltd.

Interest Called ‘Extraordinary’

Sun Publishing, which is also considering stepping into the Washington market, purchased the Houston Post in 1983 for $100 million. Four years later, it sold the paper for $150 million to publisher William Dean Singleton.

John Morton, a Washington newspaper industry analyst, said it was “extraordinary” that the Sun would be interested in the money-losing Herald. He said Los Angeles might not be receptive to the Sun’s tabloid style, which is so successful in Canada. “Tabloids are fairly dependent on street sales, and L.A. is not a street sales market.”

The Herald Examiner, once the nation’s largest afternoon newspaper, has never fully recovered from the effects of a bitter 1967 strike. Daily circulation, which was as high as 720,000 in the mid-1960s, is currently about 242,000.

The paper’s possible sale has been rumored for years. At the same time, Hearst has tried to boost readership by switching to morning delivery and by purchasing (and later selling) 28 community weekly newspapers in the Los Angeles area. Recently, Herald Examiner executives recommended to corporate officials in New York that the paper be converted to a tabloid.

Herald Examiner reporters contacted Thursday seemed wary of the prospects for working for a publication operated by the Sun. “If they want to run a classy tab, fine,” said one veteran reporter. “But if it’s (sleazy), I’m out of here.”

Earlier this week, 550 unionized Herald Examiner employees narrowly ratified a three-year contract. During the bitter negotiations, the workers had sought an agreement that the contract would remain in place if the newspaper was sold, according to sources. But that request was dropped after newspaper management assured union negotiators that there were no plans afoot to sell the paper.

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