Battle for the Enquirer

When the Cincinnati Times-Star offered to buy the 111-year-old Cincinnati Enquirer for $7,500,000 five months ago, the deal seemed as good as signed. Washington's American Security & Trust Co., trustee for the Enquirer ever since Owner John R. McLean died in 1916, was glad to sell at the top of the newspaper market. For his part, Times-Star Publisher Hulbert Taft, 74-year-old cousin of Senator Bob Taft (who owns a 5% interest in the paper), knew he was getting a good buy. The Enquirer is not only Cincinnati's biggest and most prosperous daily (circ. 185,283); it is also the city's only morning and Sunday paper. But the Tafts ran into unexpected opposition. The Enquirer's staffers, vigorously opposing the sale, decided to buy the paper themselves.

Headed by Jim Ratliff, a veteran Enquirer reporter, a committee of staffers quickly pledged savings, insurance and cash to raise more than $1,000,000 as a start towards buying the paper.

"Cruel Hoax." Ratliff and his committee, scurrying around in a hunt for outside capital, were forced to do most of their fund-raising after the paper was put to bed. During working hours, Ratliff himself dug up a series of beats on a local income-tax scandal that resulted in an indictment and a jail sentence for a Cincinnati doctor, Sidney Lange (TIME, April 21). But he was less successful with his own financing case.

When he went to the court which must approve the sale, with his pledges, the bank called the employees' bid only "a piece of paper." One witness for the bank pointed out that it would be a "cruel hoax" to let the staff burden themselves with such an enormous debt. Ratliff and his lawyers answered that it was the employees who had made the Enquirer a successful paper, and that there is no reason why it will not continue to make money and pay off the debt. As a clincher, they offered to pay $7,500,000 in cash. The argument won them a delay. Soon Ratliff went back to the court with an agreement from Halsey, Stuart & Co., investment bankers, to issue $6,000,000 in bonds to help buy the paper. A Cincinnati brokerage house also offered to underwrite a $1.5 million stock issue. The money would be cash on the barrelhead, said Ratliff, where the Times-Star offered only $1,250,000 down. The Times-Star countered that its offer was solidly backed by Times-Star bonds; the offer of Ratliff's group was based on promises.

A New Entry. Last week, just as the court was to hand the paper over to the Times-Star, a new figure entered the scene. Cleveland Financier & Industrialist Cyrus Eaton, a big contributor to the Democrats in Ohio and an old enemy of Senator Bob Taft's, announced that his Portsmouth Steel Corp. would back the employees. Eaton sent the trustees a check for $1,250,000 as a deposit, was ready to sign a contract to pay the remainder. If the paper is sold to Portsmouth Steel, it will immediately sell it to the employees, collect when the bond & stock issues are floated. The court decided to reconsider. When all the complexities of the Taft and Ratliff bids were taken into account, it looked as if the Enquirer employees were actually offering $7,600,000 v. $7,586,000 by the Taft group. Said Reporter Ratliff happily: "Most of us are Taftmen, but we don't want to work for the Times-Star."

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