'NY Times' Faces Challenges With 'IHT'

By: Jamey Keaten, Associated Press Writer (AP) Once a staple for American businessmen and homesick expatriates, the International Herald Tribune (IHT) is up against a lot of competition these days.

Cable news broadcasts are now global and 24-7. Sports scores and hometown news are available on the Web. Newspapers and magazines simultaneously publish in Europe, Asia, and the United States.

So when The New York Times Co. announced plans last week to take full control of the IHT, billed as "The World's Daily Newspaper," loyal readers wondered if its days might be numbered.

The Times Co., which already controls half of the Paris-based paper, said it would buy out the 50% stake owned by The Washington Post Co., ending a 35-year alliance. The parting between U.S. rivals was acrimonious. In a company memo, Post executives said they agreed to the deal only because the Times had threatened to start a competing international edition.

The sale was for less than $75 million -- a considerable price tag for a paper with less-than-rosy vital statistics. The IHT is poised for a third straight year of losses, amid declining advertising revenues and increased competition. Over the past year, it has reduced its newsroom staff by about 20%.

But the paper's managers and industry analysts say the Times Co. might know what it's doing. Even though the IHT has lost money in the last two years -- mainly because of the advertising slump -- it posted record circulation last year, nearly 264,000, and boasts a readership from Spain to Lebanon to Japan. The paper also has more than 20 printing sites worldwide.

And the global market has created advertising and business opportunities that didn't exist before. In the past, few companies sought to spread their message beyond national markets. But in a world where soft drinks, cell phones, and computers are hawked internationally, a newspaper with a more global reach is appealing.

"It's an interesting strategic development and an opportunity to make more of the franchise," said Goldman Sachs analyst Peter Appert. He envisions the Times Co. selling package deals for ads in both the IHT and The New York Times.

The deal also gives the Times a chance to expand its audience.

"Now more than ever the IHT becomes our international print voice," said Catherine Mathis, vice president of corporate communications for the Times Co. She said there were no plans to change the management, operations or name of the International Herald Tribune.

Still, there are doubts about the paper's future. The IHT has an expensive home base in worker-friendly France. The New York Times also has a mixed track record in the international market: a money-losing European edition disappeared in the mid-1960s -- followed by its IHT investment in 1967 -- and its ill-fated effort to market a Russian-language edition in the 1990s.

"It's obvious that The New York Times has international ambitions of its own," said Herald Tribune Executive Editor David Ignatius. "How that's going to shake out ... is something we just can't know."

The paper's roots go back 115 years to the New York Herald Tribune, its predecessor and once a key source of news for Americans abroad. That paper was immortalized in Jean-Luc Godard's 1960 movie "Breathless," with Jean Seberg playing a gamine American peddling the paper on the Champs-Elysees. Today, with only about a dozen full-time reporters, the IHT relies on Washington Post and New York Times articles for about two-thirds of its content.

For U.S. expatriates, the IHT has long been a link to Americana that they left behind -- humor columns of Dave Barry or Art Buchwald, baseball scores, comic strips like "Peanuts" or "Doonesbury," domestic U.S. news, and op-ed pieces from its parent publications. Foreign readers get a window into the mindset of American policy-makers and how Americans view themselves and the world.

But now there are other choices, ranging from USA Today to The Wall Street Journal Europe and Newsweek magazine.

"With the seasoned traveler we probably do compete with them," said Tom Kelly, vice president for circulation at USA Today, which has a daily circulation of nearly 60,000 in Europe. "We've created an audience there, and who knows what the IHT would be doing if we weren't there?"

The Washington Post is also interested in continuing to have an international presence, although the newspaper has said it's still too soon to announce any specifics.

For the Times Co. to succeed, it must find a line between showcasing its own stories without alienating faithful Herald Tribune readers, said Appert, the analyst.

Indeed, there is some anxiety about the deal, which could be completed by the end of this year.

American actor Peter Coyote, who escaped a Parisian downpour in the famous Left Bank cafe Les Deux Magots, an IHT tucked under his arm, fears "they'll simply turn it into the international edition of The New York Times within a year."

Others worry that the unique perspective of the paper's staff will disappear.

"Most are expatriates who've been here a long, long time and understand things from the perspective of each side of the Atlantic in their guts," said retiree Alfred Rossum, a New York native who has made France his home. "That something you can't buy."