Alasks's only morning daily newspaper, the Anchorage Daily News, which has lost more than $4.5 million since 1967, appears to be on its last legs unless it can find a major souce of cash to stem a $35,000-a-month financial hemorrhage.
The progressive, six-day-a-week newspaper won a 1976 Pulitzer prize and a citation from the Associated Press Managing Editors Association, both for public service, for a series it ran on questionable activities of the state's Teamsters union local.
In debt to its more conservative evening competitor, the Anchorage Times, which prints, distributes and sells advertising for the Daily News for a fee under a joint operating agreement, the News has received a two-month breathing spell by borrowing money from the Bristol Bay Native Corp., and Indian and Eskimo business group set up under the Alasks Native Claims Settlement Act.
The News' financial plight came as a surprise to most residents of Anchorage, the state's largest city - which took pride that, with a population of 175,000 it was the smallest metropolitan area in the country served by two completely independent dailies until the papers merged business functions in December, 1974.
Daily New publisher Katherine Fanning went public with the paper's financial problems Oct. 29, writing in a front-page article that she and her three children by her first husband, Chicago newspaper heir Marshall Field IV, could no longer subsidize the newspaper and asking for community support.
The News "always has been a marginal operation financially, but we saw it as a public-service operation and we always wanted to get it into the black figures," she said in a subsequent interview.
With a paid circulation of 16,000 (the Times has 45,000), the News is the third largest of seven Alaska dailies. It's biggest obstacle to becoming self-supporting, she conceded, is difficulty in attracting advertising.
The paper has shown far less restraint than the more conservative and lucrative (up to 70 per cent advertising) Times in voicing criticism of the business community.
In one instance, she conceded, a News story about a grocery store that labeled previously frozen meat "fresh" cost the paper advertising revenue. "We got a lot of heat" about the paper's stories on grocery store prices, she said.
But, she added, "I thought we got a lot of good points with businesses locally as a result of the Teamsters stories."
Indeed, the News has endeared itself to many readers for its aggressive reporting of subjects ranging from the growth of massage parlors to the power of Teamsters Local 959 boss Jesse Carr.
Readers who value the New's voice have formed The Committee for Two Newspaper to try to increase the morning paper's circulation in order to attract advertisers and keep it financially afloat.
Eight of the newspaper's 21 employees, including a member of the News' three-man Pulitzer prize-winning team, have been laid off. A second member has since resigned. The News' Washington correspondent also was laid off, as were all local columnists, most of whom now write for free. Newsroom overhead reportedly was pared by more than 40 per cent.
The News has struggled for survival since its founding in 1946. Founder Norman Brown, a former Managing editor of the Anchorage Times, subsidized the News with a lucrative contract to print the Anchorage telephone directory. He sold his 79.4 per cent interest for $450,000 to Fanning and her husband, Larry, in September, 1967. Brown received his final payment in 1976.
Mrs. Fanning had come to Alaska in 1965, two years after she and Field were divorced, to visit a Smith College classmate, Tay Thomas, wife of Lowell Thomas Jr. She liked Alaska so much that she moved here permantly in 1965. The next year, she married Larry Fanning, a former Chicago Sun-Times executive editor and adviser to field Enterprises, Inc.
The Fannings purchased the News for less than an earlier offer Brown received from Times owner Robert Atwood. The Fannings, wanting to publish only the newspaper and not do ancillary printing, did away with the non-newspaper printing work, even though it has kept the newspaper afloat financially.
Two years later the Fannings and Mrs. Fanning's and Mrs. Fanning's three children by Field began subsidizing the paper with funds given by the children's father and grandfather.
The paper was losing money at a rate of more than $625,000 in a year before Larry Fanning's death in February, 1971, according to documents fgiven to the Justice Department under an antitrust laws exemption called the Failing Newspapers Act.
Within two years after the purchase, the News installed a letter-press to replace one built in 1902. In an era when most papers were transferring to lower-overhead offset equipment, the decision was a costly one, Repairs frequently had to be flown up from the Lower 48 to fix the obsolete press.
"Nobody in the industry could believe it when they bought the press," said one Anchorage print shop owner. "It was like putting in a buggy-whip factory."
At that time, the News' greatest business strength was that it published the state's only Sunday paper, whoch attracted nearly half of its advertising revenue. "I would say [the Sunday edition] was very nearly profitable, if not profitable," Mrs Fanning says.
But the paper stayed in the red, and, after her husband's death, Mrs. Fanning took a step to save it. She approached Times publisher operating agreement, according to Justice Department documents. The Newspaper Preservation Act allows two papers to share one physical plant for their business functions. The News also rents office space from the Times for its newsroom.
But as its part of the agreement, the News had to give up it s greatest asset - its Sunday edition - to get the Times to print the morning paper. Atwood had, on numerous occasions, considered starting a competing Sunday paper, but had always backed off.
The News' advertising lineage and number of pages have increased since the agreement went into effect, but even that failed to put the paper in the black.
Surveys taken by both papers indicate that more than 90 per cent of the New's subsrcibers also take the Times, which is one obstacle in persuading businesses adn other to advertise in the News.
Bristol Bay Native Corp., one of a dozen Alaska native regional corporations funded by $962.5 million from the state and federal treasuries to reimburse Alaska's Indians and Eskimos for land taken from them, has hired an Oregon consultant to advise it on any further investment in the paper.
Fanning says she will consider selling only minority interest in the paper to try to save it.
The native corporations, which own segments of such Alaska industrise as hotels, shipping lines and construction firms, are rapidly emerging as political and business forces in the state. The groups are sympathetic to the News for its longstanding support of native claims, which the Times never endorsed.
The Committee for Two Newspapers is studying the possibility of creating a nonprofit foundation to support the News that could attract tax-deductible donations.
Recently, another complication entered the picture. The International Brotherhood of Electrical Workers petitioned the National Labor Relations Board on Nov. 15 to represent the 200 nonunions employees of the Times, who are seeking a major salary increase. Such an increase could result in a larger bill to the News for ad sales and delivery of the paper. A strike would close both papers.