New York March 2002

The Birth of the Sun

New York is littered with the carcasses of failed newspapers. What are the chances for the latest upstart?
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On the chilly last day of a very bad year in Lower Manhattan, Seth Lipsky headed into an office building on the corner of Church and Chambers and took an elevator to the second floor. The space, which Lipsky inspected with his colleague Ira Stoll, was in the midst of a build-out, with aluminum rails marking spaces that would soon be inhabited by employees of their nascent business. In the midst of the dot-com boom the scene would have been typical to the point of cliché: proprietor of a much anticipated new enterprise walks through unfinished downtown office space trailing his loyal sidekick, etching the future as construction proceeds.

But Lipsky is not reprising a dot-com reverie. A man who wears a hat, favors well-worn trench coats, and writes out messages with a ball-point pen is hardly an avatar of new technology. He's responding to the darkest year in New York's history and the worst publishing economy in decades by launching a five-day-a-week newspaper, the New York Sun, in a move so ill-timed and audacious that it leaves even some of Lipsky's investors hard put to describe the risks. A journalist who was encouraged to leave his position as editor of The Forward, a Jewish-centric weekly, after its board tired of his unrelenting conservatism (and his steady push to make the weekly a daily), Lipsky will be up against three well-funded dailies, two of which—the New York Post and the Daily News—lose gobs of money every year.

Lipsky, a free-market absolutist who occupies the far reaches of the far right, believes that there's room in the city for a daily that isn't afflicted, as he sees it, by the genetic liberalism of The New York Times. His strategy, which calls for a metro-focused broadsheet with a single section that will run no more than twenty pages daily, to be circulated Monday through Friday at around 20,000 or 25,000 copies, probably will not worry the Sulzbergers much. But it would be silly to dismiss the effort. Lipsky is not a frivolous man. He assisted in the development of the Asian and European editions of The Wall Street Journal, and he took what had been a tiny Yiddish-language weekly to English-language prominence. "He understands the dynamics of publishing, and he will be more aware of the risks than anybody else," says Peter Kann, the publisher of The Wall Street Journal and Lipsky's longtime friend. "He will have thought them through. I think it has a reasonable chance of financial success, and I'm certain it will be an artistic success."

Under Lipsky, The Forward published a number of important scoops: the discovery, when Lani Guinier was a Clinton nominee, of Guinier's legal writing in support of what critics saw as racially based quotas; the revelation that Hillary Clinton had a Jewish step-grandparent; and the fact that many Jews were finally about to recover property and money lost in the Holocaust. These stories, produced by a hardy young group of reporters, were followed up by major newspapers at the time.

But Lipsky drove the historically progressive Forward Association meshuga with right-field editorializing on such hobbyhorses as the benefits of tax cuts, the pitfalls of the Arab-Israeli peace process, and the status of Ronald Reagan as one of the nation's most accomplished Presidents. He was finally forced to resign in 2000. Lipsky then started putting together $15 million from a team of eleven investors that includes Michael Steinhardt, a retired money manager and a former member of the Democratic Leadership Council with a long interest in Jewish affairs; Roger Hertog, a vice-chair of Alliance Capital Management, the chair of the Manhattan Institute, and a trustee at the American Enterprise Institute; and Lord Black of Crossharbour, the chair and CEO of Hollinger International, which owns the Chicago Sun-Times, the Jerusalem Post, and The Daily Telegraph of London, among other papers. It's one measure of the bereft state of the Web that a group of men seeking a bit of Manhattan mindshare feel they have to plunk broadsheet pages onto New York's streets. And just in case a new New York daily doesn't make the money disappear efficiently enough, Steinhardt and Hertog are, as of this writing, negotiating an agreement to assume two-thirds ownership of The New Republic, the Washington political weekly known for generating lots of interesting ideas and very little profit. Steinhardt knows what to expect, having already sunk $5 million into The Forward in support of Lipsky's tenure. So does Hertog. "The experience of starting a daily paper in New York will probably bring new meaning to the word 'humility,'" he says.

Lipsky, a careful student of newspaper history, understands that the path he is about to tread is littered with newspaper carcasses. The attraction of a daily place at the table in the densest media environment in the world isn't hard to understand, but the price is dear. The last attempt at a new Manhattan-based daily, New York Newsday, lost $100 million over a decade before closing in 1995. The Trib, funded by a conservative cabal, was launched in 1978 and burned through $4 million in just three months before imploding.

Elsewhere on the Web
Links to related material on other Web sites.

"Journalism"
An overview of newspaper journalism and publishing in America through the Civil War. By Mark Canada, a professor at the University of North Carolina.

"The Sun and the Herald Are Born"
The story of the beginnings of New York's Sun and Herald newspapers in the early nineteenth century. Posted as part of a PBS children's education exhibit.

Lipsky thinks that by contracting out for printing and distribution and keeping circulation small and expenses down, he can gain a toehold. He finds inspiration in the penny press of the mid-1800s. "New York was a sink of pro-slavery sentiment, and it was crawling with Copperhead Democrats," he told me, tucking into a waffle at a nearby restaurant after our short tour of the offices. Horace Greeley was putting out the staunchly abolitionist Tribune, but "he wasn't willing to go to war." One of his editors, Charles Dana, was, and they eventually split over the issue. Dana served as an assistant secretary of war under Abraham Lincoln, covering the war for an audience of one. In 1868 he became the editor and part owner of the New York Sun, a penny-press paper started in 1833 by Benjamin H. Day, a printer looking to increase business. (Greeley called the Sun "the slimy and venomous instrument of Locofocoism, Jesuitical and deadly in politics and grovelling in morals.")

"Dana set the paper on a trajectory of limited government, equality under the law, free markets, pro-growth, strong foreign policy, integrity in government," Lipsky says. It's a constellation of issues that makes Lipsky entirely comfortable, which is why the name of the Sun—the old paper was folded into the New York World-Telegram in 1950—will rest atop the new enterprise. (The old Sun gave the editors of the world "Yes, Virginia, there is a Santa Claus." It also published, in 1835, one of the greatest paper-selling hoaxes in journalism history: a new and powerful telescope revealed that the moon was populated by winged men who spent time "collecting various fruits in the woods, in eating, flying, bathing, and loitering about upon the summits of precipices.")

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