Joe L. Allbritton, former owner of the Washington Star, has signed a tentative agreement to buy the New York Daily News, it was announced today.
Jumping in where other financiers and major corporations have feared to tread, Allbritton made his offer for the 63-year-old tabloid only hours after New York real estate developer Donald Trump dropped out of contention. The purchase price was not disclosed.
The offer is contingent on Allbritton's ability to get major concessions within 30 days from the 11 unions representing some 3,800 full-time employes at the News.
It has been estimated that any buyer would seek to cut the workforce by about 1,500.
Allbritton, who is now chairman of Riggs National Bank in Washington, issued a prepared statement in which he called the News "a great and vital New York institution" and said he was "deeply committed to the survival of the News and its growth, prosperity and service to this city."
He said, "I am optimistic that agreements with the unions can be concluded that will permit the News to continue publication on a sound business basis." Allbritton, who has the reputation as a tough bargainer with unions, said he would "personally" conduct negotiations with the unions.
Allbritton was born in Mississippi but made his fortune in Texas where his family moved.
A millionaire by the time he was 33, Allbritton has demonstrated an ability to increase his holdings at a rate that makes heads spin. In 1975, fighting off a challenge to his acquisition of a major portion of the stock of the Washington Star, he put his net worth at more than $100 million. Six years later, he told a court that his net worth could be "conservatively valued" at $200 million.
Stanton Cook, president of the Chicago-based Tribune Co., which put the News up for sale Dec. 18 just before the newspaper announced an $11 million loss for 1981, expressed confidence that Allbritton "can negotiate successfully with the unions." He added, "Joe is the most qualified purchaser we found for this purpose."
Former Washington Star editor James Bellows said, "I sent him a note of congratulations and told him if he wanted any abrasive consulting I'd be glad to help." Bellows, who once served as editor of the New York Herald Tribune, has not been offered any job at the News by his former boss, he said in a telephone interview from Los Angeles.
With 1.5 million daily circulation and 2 million on Sunday, the News is the largest general circulation daily newspaper in the country. The Allbritton announcement, broken to the News staff by editor Michael J. O'Neill, was greeted with scattered applause. "It's the first concrete news we've had after months of rumors," said reporter Neal Hirschfeld, who said the mood in the newsroom was "definitely up--more than in a long time."
Details of the complex deal remained sketchy and much of the final outcome depends on what the unions decide.
The Tribune Co. will retain the valuable 37-story art-deco News building on East 42nd Street and its 11-story wing. Real estate experts value that property at between $100 million and $135 million. Allbritton will lease space in the building necessary to publish the paper.
Allbritton will acquire the remaining assets of the newspaper, the Newspoint plant on about 35 acres on the East River in Queens where the newspaper's comics and Sunday magazine are printed and an aging plant on three acres in Brooklyn, which the Tribune estimated would take $50 million to modernize.
Left unanswered is the question of the newspaper's massive unfunded debt, including pensions and severance costs, which is estimated at between $80 million and $100 million. These don't come into effect, however, unless the newspaper closes, but they surely will figure in any final agreement between Allbritton and the Tribune Co.
One possibility is that the Tribune Co. will retain the liabilities temporarily in exchange for keeping the 42nd Street building.
Trump, like Allbritton, was not looking to acquire the 42nd Street building, but neither did he want the big debt burden. "The property in Queens is not going to bail anyone out of that one," he added.
"I wasn't going to guarantee liabilities under any circumstance," he said in a telephone interview. "We had a handshake deal on this. But then they called me and said they had another deal. When I shake hands, it usually means something."
George McDonald, president of the Allied Printing Council, which represents the unions at the News, said at a press conference that "we are ready to cooperate with a buyer to restore and preserve its profitability." He said he expects Allbritton to inform the unions before negotiations begin of anticipated changes in the "terms and conditions of employment." He also said that each of the 11 unions would negotiate separately with Allbritton.
Among the problems facing Allbritton is that the New York newspaper contracts contain so-called "me-too" clauses. If the unions make certain concessions to the News, the same concessions automatically are extended to the rival New York Times and Post.
Staff Writers Joyce Wadler and Martha Hamilton contributed to this report.