Sun-Rise In St. Louis

By WILLIAM A. HENRY III

The dream of becoming a latter-day Citizen Hearst seems emblazoned upon the American entrepreneurial psyche. Over the past half-century, dozens of metropolitan papers have shut down and few have been salvaged. None have been launched successfully since New York's Newsday in 1940. Yet would-be publishers keep emerging; the example of others' failures seems only to add to the imagined glory.

Three things make next week's debut of the St. Louis Sun a little different. First, owner Ralph Ingersoll II, 43, is no self-deluding newcomer but a crafty revamper of smaller papers whose privately held companies have sales that place them among the top dozen U.S. newspaper groups -- and whose biggest concentration of holdings is in the suburbs of St. Louis. Second, Ingersoll has inherited knowledge about the trials of a big-city start-up: his late father Ralph, a onetime general manager of Time Inc., founded the critically acclaimed New York City daily PM, which lasted eight years in the 1940s. Third, the Sun is not reaching for the stars.

The city's Post-Dispatch, founded in 1878 by Joseph Pulitzer and controlled by his descendants, seems entrenched (circ. 378,255). The competing Globe- Democrat, which announced its closing three times in three years, finally folded in 1986. But Ingersoll contends that the P.D. fails to serve the market. "Two-thirds of the households do not read the Post-Dispatch," he claims. "The great challenge is that two-thirds, the unwashed, if you will, who are simply not interested." To reach them, the Sun will be a color- splashed tabloid "for today's video world." Post-Dispatch chairman Joseph Pulitzer Jr., who disputes Ingersoll's figures, declares, "We defend our franchise, and we will be vigorously competitive."

Ingersoll splurged $20 million on such items as a printing plant, electronic facsimile equipment and 5,000 scarlet vending machines, but he is spending relatively little on a reporting staff because the paper's emphasis is on packaging news more than on unearthing it. Advertisers were promised a circulation of 75,000; some 41,000 subscribers are said to have signed already.

The 40 Ingersoll dailies and 200-plus weeklies are mostly undistinguished moneymakers. An intellectual who counts Samuel Beckett as his favorite writer, Ingersoll nonetheless publishes papers that condescend; they entertain more than educate or inform. He blasts other newspapers for giving reporters free reign to pursue investigative and analytic stories he considers of limited interest. Says Ingersoll: "There has been a general breakdown of discipline in American newsrooms in the past generation. It got to the point by the early '80s where you couldn't get the best young reporters to aspire to be editors anymore."

The Sun, he decrees, will be "top-heavy with editors." Much of their role / will be to imitate editors elsewhere, notably those of the British tabloids (one of Ingersoll's heroes is Rupert Murdoch) and the breezy, chipper Toronto Sun, whose owners flirted with investing in the St. Louis project. Ingersoll is borrowing blatantly from USA Today, to the extent of labeling the new paper's sections Money, Life and Sports. Pages of USA Today are taped on a wall next to a sign reading YOUR GUIDE TO EXCELLENCE. Despite the Sun's derivative quality, Ingersoll describes the paper as "my PM, in the sense that it's creative and no one else has had the gumption to do it."

Gumption or no, skeptics perceive an Oedipal element behind the enterprise. After joining the small-paper business launched by his father, the younger Ingersoll clashed with him early and often, tried to break free, then forced him out of the partnership in a financial settlement that the elder Ingersoll considered unfair. Thereafter, father and son spoke infrequently. Ingersoll blames the tension largely on his stepmother; at his father's funeral in 1985, the widow and the namesake son held separate receptions.

One major conflict was over financing. The father was cautious, the son a plunger. Says Ingersoll: "He was still thinking in hundreds of thousands when I was thinking in millions. He never really understood the fungibility of debt and equity." Later, capital for some deals was assembled by indicted Drexel junk-bond financier Michael Milken, whom Ingersoll regards as a close friend. Says media analyst John Morton of Lynch Jones & Ryan in Washington: "From all we can learn, the company is healthy, although heavily leveraged. The small papers are cash cows. I admire him for taking this risky venture. But I'm from Missouri on this one -- he'll have to show me."

Though Ingersoll concedes there is some financial risk, he argues that "launching the Sun is likely to turn out on an investment basis to be the best deal we've ever made. For the same amount of money, I could buy something boring that I've done umpteen times over that has the potential to earn, pretax, perhaps $2 million. The Sun has the potential to earn 15 times that. So from a risk-reward viewpoint -- which isn't why I did it -- it makes sense. From a creative viewpoint, it has a lot to do with how our newspapers will operate in the '90s."

With reporting by Staci D. Kramer/St. Louis