A Manhattan real estate developer has agreed in principle to buy the financially troubled New York Post for $37 million, provided there are "substantial" concessions by the newspaper's unions, a spokesman for Post owner Rupert Murdoch said yesterday.
The anticipated sale of the paper and its valuable waterfront property to Peter Kalikow came after Democratic Sens. Ernest F. Hollings (S.C.) and Edward M. Kennedy (Mass.) attached a surprise amendment to last December's omnibus spending bill that in effect required the sale by early March.
The amendment forbade the Federal Communications Commission to extend a waiver of its rules outlawing ownership of two media properties in the same market. Murdoch must sell the paper to retain New York television station WNYW, which he purchased more than two years ago. Murdoch plans to sell a television station in Boston to keep the Boston Herald.
Although Kalikow has said in a statement that he wants to keep the paper open, Murdoch spokesman Howard Rubenstein said that Kalikow was not required to sign a three-year agreement to keep the 187-year-old paper operating at its present site in downtown Manhattan. Editorial employees of the Post were told Friday that Kalikow would sign such an agreement.
Rubenstein said because of a recent advertising decline caused by the amendment, Murdoch decided it was "too much to ask" that Kalikow promise to continue operation of the paper for three years.
Kalikow, with no newspaper experience, said in a statement yesterday that he "sincerely wanted the Post to continue publishing."
He said he expects to keep most of the staff, but added, "There must be a realistic look at the economics of the New York Post."
Rubenstein said Murdoch plans to meet with union leaders at 10:30 a.m. today to lay out concessions Kalikow believes he needs. Rubenstein said the concessions by the unions must be "substantial."
The Associated Press reported that the unions would be asked to approve a "wide-ranging package of cutbacks that would include eliminating the newspaper's 250 delivery drivers," replacing them with independent wholesalers. Dropping the drivers would save $6 million a year, according to the AP.
Joy Cook, chairman of the Newspaper Guild, the Post's largest union, said Kalikow must not expect the unions to agree to major cutbacks.
"I think they've approached the problem from the wrong direction," she said. "They've approached it from the direction of concessions before we know anything about long-term obligations of the buyer."
Cook said there are other potential buyers besides Kalikow, including the employees themselves.
Rubenstein said yesterday that despite the contract for the sale to Kalikow, Murdoch's lawyers plan to appear before a U.S. Appeals Court panel of judges here on Thursday to argue that the Kennedy-Hollings amendment that affected his New York and Boston media properties is unconstitutional.
Under Murdoch, who purchased the Post in 1976 for about $30 million, the paper has lost more than $100 million, including $17 million last year, according to sources close to the sale negotiations.
Murdoch told prospective buyers of the paper last month that the real estate was worth about $35 million. Because the property is prime waterfront between the Manhattan and Brooklyn bridges, some New Yorkers fear Kalikow might close the paper, pay off contract obligations -- estimated at $30 million -- and develop the site.
Kalikow's lawyer said yesterday that Kalikow, 44, is not interested solely in the real estate but wanted to expand his influence in New York City through the newspaper Alexander Hamilton founded.
In 1987 Forbes magazine listed Kalikow among the 400 richest Americans, estimating his net worth at about $500 million.