Is America’s Oldest Newspaper on Its Deathbed? : Media: Contract negotiations continue as the New York Post faces what could be its final deadline on Friday.

The management and unions of the cash-strapped New York Post labored Wednesday through a second day of contract negotiations that could permanently stop the presses at the city’s third-largest and loudest daily newspaper.

As they worked toward a Friday deadline, each side hailed what they said was the other’s good-faith efforts. But it wasn’t clear that the unions would be willing to make the sacrifices that owner Peter S. Kalikow says are necessary for him to save $17 million a year and continue operating the flashy tabloid.

“We may finally have reached the point where the economics of the business just don’t work,” said one union member, recalling that the Post has faced intermittent financial crises since the 1940s.

The Post, founded by Alexander Hamilton in 1801, is the nation’s oldest continuously published daily.

Kalikow, one of the city’s wealthiest real estate developers, bought the 189-year-old paper from media and entertainment magnate Rupert Murdoch for $37.6 million in 1988, and has so far lost $93 million operating it. The paper, which is known for such eye-grabbing headlines as “Headless Body in Topless Bar,” cut staffing sharply under the new owner.

But amid a deepening regional recession, advertising has fallen 16% in the past year, and circulation has declined 30,000 to 504,720. The Post faces heated competition from the tabloid New York Daily News, the New York edition of the Long Island tabloid Newsday (owned by Times Mirror Co.), the New York Times and the region’s other daily and weekly newspapers.

Kalikow, who says he is under pressure from his banks, has claimed that he will lose $27 million this year and has invited the unions’ accountants to review his books. Officials of the Allied Printing Trades Council, which embraces 10 Post unions, acknowledge that the Post is losing money rapidly, but say they want a major ownership stake in the company in return for givebacks.

The members of the Post’s Newspaper Guild, who account for 352 of the paper’s roughly 850 unionized workers, were particularly jolted last week when Kalikow asked for 30% pay cuts, which, according to one knowledgeable union member, would reduce average pay to $580 a week.

Members of the guild voted without dissent to oppose such a cut.

“It was completely unacceptable,” said a member of the guild, which represents editorial and advertising staffs. “We have to live in this expensive town.”

Late Wednesday afternoon, Barry Lipton, president of the guild, told union members that management had dropped demands for concessions in such areas as severance pay and sick pay, but had not eased demands for steep pay cuts.

Kalikow’s representatives contended in talks Wednesday that $91,000 a week was needed in salary concessions from guild members. And they said that because of prior staff cuts, the paper simply couldn’t continue functioning if it lost more than 10 to 20 guild members.

“Right now, everything is up in the air,” Lipton told guild members.

A spokesman for management, Gary Lewi, said late Wednesday that the two sides “will continue to negotiate, and we are confident the paper will continue to publish.”

Negotiators were to resume their work at 1 p.m. today. Union officials said they hoped that by Friday afternoon they would have a contract proposal to present to the membership for a vote.

Kalikow has declared that he will shut the newspaper down immediately if the deadline isn’t met. On Tuesday evening, he moved the deadline from midnight Saturday to 8 p.m. Friday, to enable him to publish a final editorial explaining the reasons for the shutdown in Saturday’s editions if the two sides fail to agree.

Watching the drama with a keen interest from the sidelines are officials of the Daily News, which faces financial difficulties of its own and has been battling its unions over a contract for most of the year.

A Daily News official announced this week that the News would expect the same terms from the unions that the unions give the Post. The statement was promptly denounced by Theodore Kheel, a negotiator who is advising the unions, as “one of desperation.”

John Morton, a newspaper consultant in Washington, said the Post’s failure would probably not provide a great boost to the prospects of any other New York newspaper, because the Post carries relatively little advertising and because many of its readers are already reading another newspaper.

But “to the extent anybody’s helped, the Daily News would probably be the natural beneficiary,” he said. As it picked up readers, the News could raise advertising rates.

On the other hand, the Post could be a big winner in circulation and advertising if the Daily News were to fail, many industry observers believe.