Employees May Try to Buy Daily News

The adviser to striking unions at the Daily News said Tuesday that he was working to buy the strikebound paper in a last-ditch effort to save it from closing.

Veteran labor leader Theodore Kheel said Lazard Freres, the investment house that represents Daily News owner Tribune Corp., has been notified that he is making a serious offer.

“I will be devoting my efforts exclusively to find a way in which the Daily News can be saved by purchase through an employee stock ownership plan,” he told a news conference at the offices of the Newspaper Guild, one of the unions on strike against the company.

Kheel, with approval of the striking unions, said he has been recognized as a potential buyer and “will be given information any potential buyer needs to put a deal together.” He did not disclose any possible terms or conditions of a sale.

Nine unions representing more than 2,000 Daily News workers have been on strike since Oct. 25.

“The main hope is that the Daily News will be saved,” Kheel said.

Daily News Publisher James Hoge said “it is too early to tell if Kheel is a qualified buyer,” but that he would be treated “like any other potential buyer.”

A Tribune Co. spokesman said the investment bankers had not yet determined whether Kheel was a qualified buyer for the embattled tabloid and therefore would not comment.

In response to accusations that management wanted to close the paper, he said the Daily News “would try anything to save the paper.”

Hoge also denied rumors that the paper would close on Thursday.

“We would have to have negotiations with the unions and give our reasons to close,” even though the paper’s heavy losses could constitute a reason, he said.

The tabloid has been operating with replacement workers. However, boycotts by readers and advertisers have taken a severe toll. Few newsstands carry the paper that was once the nation’s largest metropolitan daily.

Among those who have indicated a willingness to talk are New York Post owner Peter Kalikow and British publishing magnate Robert Maxwell, Kheel said.

Howard Rubinstein, a spokesman for Kalikow, said the two had spoken and that Kalikow was willing to consider anything that would “secure a healthy financial future” for the Post, including entering a joint-operating agreement with the News.

Under such an agreement, the two papers would merge advertising and production operations but keep separate editorial staffs.

According to an independent survey made public Monday, the News has lost 42% of its regular readers in the borough of Queens, once a News stronghold.

Kheel emphasized that under an employee stock ownership plan, the unions would not own the paper. The ESOP could become the owner or a part-owner with another entity.

The News has given employees a 60-day warning, which expires March 20, that the paper will close.