R. Robert Linowes, former president of the Greater Washington Board of Trade, said yesterday that he and other area business leaders are working with labor unions and potential investors to determine the feasibility of pruchasing The Washington Star and continuing its publication.
"The paper is not dead," said Linowes, a zoning lawyer and civic activist.
He said it was "necessary to be realistic. I don't want this to be another 'we're bringing a baseball team to Washington' situation. But it's not all garbage. There has been some activity."
The involvement of Linowes, who has considerable financial and personal connections, gives credibility to the effort by Star employes to save the paper. He heads a group of Montgomery County investors who are partners with the Times Mirror Corp., publishers of the Los Angeles Times, in bidding for the Montgomery cable television franchise. He is a member of the board of Peoples Life Insurance Co.
Linowes also is the brother of former Carter administration diplomatic troubleshooter Sol M. Linowitz, who is a member of the boards of both Time and The Star and who represented The Star in its unsuccessful negotiations with The Washington Post over a possible joint production agreement.
Linowes' effort on behalf of the unions appeared yesterday to be the only active attempt to save The Star.
Louis Slovinsky, a spokesman for Time Inc. in New York, said "we have had some more inquiries" in addition to the 10 he reported over the weekend, but "I don't want to characterize any of them as serious. We don't want to raise any false hopes."
Time Inc., which owns the 128-year-old publication, announced last week the newspaper would cease publication Aug. 7, in large part because the newspaper was losing about $20 million a year.
Linowes acknowledged in telephone interviews yesterday that the task of saving The Star grows more difficult with each passing day as employes, subscribers and advertisers abandon it.
He said he and his partners, whom he declined to identify, hoped to decide within two or three days "how much money we need, and in what form. It's possible that we won't make a proposal when we see what the numbers are."
Time Inc., which bought the newspaper in 1978, has set no price for it, and it is not clear how much money would be needed to buy the paper and keep it operating. In the period that it has run the newspaper, Time spent $85 million and in return racked up $35 million in after-tax losses.
But Time spent lavishly in an effort to build readership and advertising. Losses might be less under a more frugal management -- especially if the unions representing workers at The Star decide to invest money in it and to accept reductions in salary or benefits.
"The impression has been given that if Time couldn't do it, it can't be done," Linowes said. "We don't believe that."
Stephen D. Harlan, a partner in the accounting firm of Peat Marwick Mitchel & Co. who is working with Linowes, said he is beginning to look at the costs involved in running the paper.
"We are doing some discussion of financial feasibility to see if tis is viable," he said. "There are a lot of variables. We're attempting to get numbers in a hurry," he said, because "retaining key people is a problem as the scheduled execution draws nearer."
The 11 unions that represent most of The Star's 1,427 employes said over the weekend that they were drafting a plan to save The Star through joint ownership by employes and investors.
Linowes confirmed that such an arrangement is under consideration, but he said that the so-called Employe Stock Option plan, known as ESOP, is legally complex and may take more time to work out than remains before The Star is scheduled to close.
Charles A. Perlik, president of The Newspaper Guild, said that "labor interest was not going to be enough" to save The Star. "Investment would have to be hooked to employe ownership, and there hasn't been a scintilla of interest in that in this country," except in Kansas City where employes formerly owned the Star and Times.
Robert Peterson, president of the Greater Washington Central Labor Council, said he had four or five different offers from business groups to become joint owners with Star employes. But, he said, all of the proposals would require the unions to first put up $5 million or $10 million. "We don't have that kind of money," he said.
Mayor Marion Barry is scheduled to meet with union representatives on Wednesday to offer his support and assistance for their effort to save the newspaper.
Since Time announced the imminent closing of the newspaper, several other possible purchase efforts have surfaced, but quickly died.
Richard Viguerie, the conservative fundraiser, who said last week that he wanted to keep The Star going, said yesterday, "There is nothing happening right now and I don't want to get involved. I want somebody else to do it."
Suggestions that Edgar Bronfman, head of the Seagram's distillery empire, might put up the money to save the paper, were dismissed by a spokesman yesterday as being without foundation. "He would not want to sustain losses like that," the spokesman said.
The amount of loss that would be entailed in taking on the Star is what Linowes and Harlan are trying to determine.
A potential purchaser could probably acquire The Star for little more than the approximately $12 million value of the paper's plant at 225 Virginia Ave. SE, financial analysts said. That amount could be raised in a loan secured by a mortgage on the property, but the real question is whether the paper could then break even.
According to Harlan and others, it is difficult to calculate the cost of running paper for several reasons.
It is not clear how many of The Star's 323,000 daily subscribers would continue to take the paper. No firm figures are available on how much productions costs could be reduced by cutting out Saturday or Sunday editions. New owners would take on the contracts with the unions, but those might be renegotiated if the unions had a financial stake in the paper.
In addition, scores of Star employes, assuming that the newspaper will fold, have already accepted jobs elsewhere, and it is not yet clear if the paper could be published with a drastically reduced work force or if replacements would have to be hired.
The advertisers who failed to utilize The Star under Time ownership might respond favorably to a locally-owned paper concentrating on local issues. But there is no assurance of that and in any case it would take time to build revenues.