The Washington Post Co. said yesterday that it is selling its half-interest in the Paris-based International Herald Tribune to the co-owner, the New York Times Co., after the Times threatened to start a competing publication if The Post refused to give up its stake.
The Times priced the sale at less than $75 million and hoped to conclude the deal late this year or early in 2003, said Times Vice President Catherine Mathis.
The International Herald Tribune runs news stories and editorials from the two U.S. newspapers, under editors from both publications who alternate at the helm. The Times said it has no plans to rename the newspaper or change its management and operations. But it made no secret of the newspaper's importance to its future expansion. "The IHT will become our international newspaper voice," Mathis said.
The Times, in a statement, portrayed the change as evolutionary. Describing The Post as "an exceptionally good partner," the Times said it was ready to pursue a new strategy.
But Post executives made it plain that they were forced into the sale. In a message to employees today, Washington Post Co. chairman and chief executive Donald E. Graham and senior executives said the decision to sell "was made with great reluctance and sadness -- and little choice."
Graham's note said the Times had warned that in addition to launching a competing publication, the New York-based company would withhold any cash infusions into the International Herald Tribune, threatening the future of the newspaper and the jobs of its staff. Under those conditions, the IHT's operations would have soon become untenable, the Post said.
Mathis did not respond to The Post's statement beyond saying: "It was a mutually agreed-upon decision. We felt the IHT would benefit from the full commitment of a single owner."
Times executives said single ownership would make the newspaper more efficient and justify greater investment.
"I think the Times was increasingly frustrated because they wanted to have a presence in the international market with the New York Times brand, which the IHT was not able to deliver," said Alex S. Jones, a former Times media reporter who now is director of the Shornstein Center on the Press, Politics and Public Policy at Harvard University.
"It goes to the different ambitions of the Times and The Post," Jones said. "The Times is a national newspaper and wants to be international."
Although The Post has concentrated on its regional readership, Post executives point out that the newspaper has had an important international presence through the IHT, its extensive foreign staff, and its Web site, whose national and overseas audience has been growing. "We expect that presence to continue to grow," Graham said.
The Post said it offered to buy the Times' share for the same price offered by The Times and was willing to place the IHT under Times business control while keeping joint editorial control. The Times rejected those alternatives, The Post said.
The forced sale of the IHT leaves The Post "in an aggressive frame of mind" concerning future international journalism ventures, Graham said in his message to employees. "The Post will explore all options for international journalistic outlets, including possible arrangements with newspapers and other technologies for delivering Post news."
Washington Post Executive Editor Leonard Downie Jr. said no decisions had been made about possible moves. "This happened suddenly," he said.
The International Herald Tribune was founded as the Paris Herald in 1887 by the flamboyant American publisher James Gordon Bennett Jr. and won a unique niche as the favorite newspaper for Americans in Europe. It became the Paris Herald Tribune after Bennett's death and the merger of New York's Herald and Tribune newspapers.
"It was a lifeline to America," said columnist Art Buchwald, who talked his way onto the staff of the newspaper in 1949 and remained until 1962. It was also a Parisian institution, known for its editorial independence -- and its "Golden Girls," the young women in bright and close-fitting Herald Tribune T-shirts who sold copies along the Champs Elysees.
In the mid-1960s, The Washington Post and the New York Times each acquired one-third of the newspaper from Whitney Communications. In 1991, The Post and the Times bought out the Whitney interest, becoming co-owners.
"The fact that it was The Post and the Times doing it together added to its convenience and status and value," said David Ignatius, a former Post editor who is now executive editor of the IHT. "It's a shame to see that come to an end, because it was such a marvelous partnership."
The acquisition was the first by the late Katharine Graham after she became president of The Washington Post Co., and despite the complications surrounding a venture run by the two rival media companies, it formed a link between the families of the Grahams and Sulzbergers, controlling owners of The Times.
After Arthur Sulzberger Jr. succeeded his father as Times publisher in 1992 and the Times accelerated its evolution into a national newspaper, old family bonds weren't strong enough to trump business goals, Jones said.
"I don't think he has any desire to go to war" with Donald Graham, Jones said of Sulzberger. But, he added, "Arthur is a tough guy. He is not afraid of confrontations" that his father would have avoided. "And the financial pressures on the company are different."
Last year, the Times began an experiment selling a weekly supplement of The Times published in English in the French newspaper Le Monde -- over the objections of Post executives and IHT management. "That was a depth charge on the relationship," between the two media companies, Jones said.
The IHT reached a record circulation of nearly 264,000 last year through its combined European and Asian sales, but like its competitors, the Wall Street Journal's international editions and the Financial Times, its advertising revenue was badly hurt by the global economic slowdown and the loss of travel and tourism advertising following the Sept. 11, 2001, terrorist attacks. The IHT lost about $5 million last year, according to people familiar with the newspaper's operations.
"You could see why The Times would want to have a greater international presence," said John Morton, a media analyst with Morton Research Inc. in Silver Spring. "They have had great success" creating a national newspaper. Now, he added, they want to take the next step.
Still, Morton said, the new strategy poses some risks. "The International Herald Tribune is a long-standing, revered brand name. I suspect they would be hesitant to change that," Morton said.