Influential newspaper-union lawyer Theodore W. Kheel said today he will recommend that New York Daily News unions put a scheduled March 31 raise into an escrow account that could be used to buy stock in the morning tabloid if its owner, Tribune Corp. of Chicago, cannot find another buyer.
Officials at the Daily News and the Chicago Tribune reportedly want to eliminate the proposed March 31 increase of about 10 percent for the News' unionized employes.
However, since any union concession made to the News would have to be made to the profitable New York Times and the News' arch-enemy, the New York Post, unions are reluctant to grant concessions to the News, the nation's biggest circulation morning newspaper that last year lost about $12 million.
Kheel said the 10 percent increase due to the News union employes would generate about $15 million in additional wages this year, all of which he proposed to put into the newly created News Employees Stock Ownership Trust.
The trust would not buy any shares of the Daily News unless the Tribune could find no other buyer. The unions and Kheel would prefer that the Tribune continue as owner, and would rather have another owner than the employe stock trust.
One reason might be that the stock trust will not have enough assets in the near future to make a serious bid for the Daily News.
In many respects, because of the lucrative East 42nd Street site where the News offices and half its printing facilities are located, the newspaper is more valuable dead than alive, Kheel said. He said one way to preserve the News would be to move its Manhattan printing facilities to another borough, probably Brooklyn.
Much of the space now occupied by the News could be converted to office rental space at $30 to $35 a square foot. The News now occupies 37 percent of the 987,000 square feet available in the News building.
But the prospect of building such a plant--estimated to cost $50 million--reportedly is the chief reason the Tribune last December decided to sell the paper.
Last week, New York City Deputy Mayor Karen Gerard told the Tribune Co. that if the News wants to move its printing facilities, the administration of Mayor Edward Koch "can bring together a set of tax incentives and other financing tools that will help make a new location cost-effective."
Several potential buyers have talked to the Tribune Co., including Warner Communications and Arthur Levitt, current head of the American Stock Exchange. News and Tribune officials have agreed to bring the unions together with any potential buyer to talk about increasing productivity at the tabloid, which sells 1.55 million copies a day.
So far, News and Tribune officials said, no buyers have become serious enough to warrant talking with unions.
News employes worry that the Tribune will shut the paper by the end of March if no buyer is found, although Tribune and News officials say no such deadline exists. The News, which has been losing circulation for years, failed to make a profit for the first time last year.
In January, the News reported a jump in circulation--from a nadir of roughly 1.4 million last fall to 1.55 million daily--and said it will announce another increase for February. Even so the News is selling 600,000 fewer papers each day than it was several years ago.