Trendsetting British Tabloid Closes p. 13

By: Alan Harman Rupert Murdoch shuts down money-losing newspaper sp.

THE CLOSURE OF Rupert Murdoch's British national daily tabloid newspaper, Today, has left a political vacuum that has analysts intrigued.
Today was the only national newspaper supporting the opposition Labor Party, which is expected to form the government when the next general election is called within a year.
The final issue of Today carried a lift-out from the Sun, another title in News International's stable, inviting readers to switch. The sales pitch from the traditionally anti-Labor Party Sun even carried a message from Labor Party leader Tony Brown saying the Sun was the way to go for Today readers.
The Sun has been passionately pro the ruling Conservative Party, but the lift-out in the final issue of Today had observers predicting a change of political alliance for the Sun.
More immediately, Murdoch's News International, parent company of Today, set up a special unit to help the paper's 200 staffers cope with the closure ? and find new jobs. The company said many would be moved to the group's other titles that include the Sun, the Times, News of the World, and the Sunday Times.
The 10-year-old Today had been a trendsetter in British journalism.
It was the first British national daily newspaper to be produced totally electronically, and the first to use full color. It was also the first to use simultaneous printing at satellite presses throughout Britain and it used trucks to speed the paper around the country instead of relying on the rail system.
Brian MacArthur, founding editor of the newspaper and now an associate editor of the Times in London, said Today had revolutionized British newspapers.
He said British newspapers now are "bigger, brighter and, mostly, more profitable" because of Today.
The paper was founded in 1986 by Eddy Shah, the owner of a string of free newspapers. It was then sold to the owners of the Observer for $15.8 million. New owners, Lonhro, spent another $15.8 million trying to develop the paper, but were about to sell it to the late Robert Maxwell when Murdoch preempted that sale and bought it in 1987 for the equivalent of about $79 million.
News International spent an estimated $230 million seeking to develop Today, but the newspaper ? which was launched with a circulation of 300,000 ? was never profitable. When it was closed, circulation was just 573,680, down eight percent in the previous 12 months.
In the 12 months before it closed, its losses were put at $17 million.
Some analysts saw the closure as Murdoch making his point with the government over its plans to introduce cross-media ownership laws that would prevent him further expanding in Britain.
There was also talk in the industry that Murdoch had closed Today so that he could buy 20% of its main rival, Express Newspapers, but News International executive chairman Les Hinton denied this.
Hinton was anguished by the closure decision, stating, "With a modest circulation, insufficient growth and rapidly rising costs, we have no alternative. I feel dreadful. I have been working in the media and newspapers for 35 years and I have not had a worse day than this."
Hinton said Today's failure had not been for the lack of trying.
"Scores of millions of pounds have been poured into the paper for editorial and promotion during the past eight years without the necessary result," he said.
"With newsprint costs running 50% higher and rising, we had to take decisive action."
He said there had been no credible buyer for the newspaper, dismissing reports of an attempt by Mohamed Fayed, owner of the famed Harrods department store in London, to buy the paper.
Ironically, the day before the closure of Today, the Times, another title owned by News International, had raised its price five pence (7.9?), a move matched the next day by the rival Telegraph.
That move put the cover price of the Times at 47 pence and the Telegraph at 63 pence.
The Telegraph said a previous 7.9? increase in the cover price, earlier in the year, had been offset by a 30% increase in newsprint prices.
Chief executive Dan Colson said the latest increase is likely not to be enough to offset the rapidly increasing price of newsprint.
But, unlike Today, the Telegraph ? with a circulation of 1,064,717 daily ? remains profitable. In the first nine months of its current financial year, its operating profit was $9.64 million.
It was the first British national daily newspaper to be produced totally electronically, and the first to use full color.
?( Harman is a free-lance writer.) [Caption]