Col Allan declares himself MacArthur, as the ‘New York Post’ roils

Allan, Murdoch, Thomson, Angelo. ()
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"Like MacArthur I shall return."

That's what Col Allan, the New York Post's pit bull of an editor-in-chief, wrote in an email to Capital earlier this week, likening himself to Gen. Douglas MacArthur, the World War II hero who escaped to Australia in 1942 as Japanese forces were bearing down on him, in order to regroup and lead the Allies to victory in the Pacific Theater.

The reference seemed well chosen, if a little self-aggrandizing. Allan was, after all, writing from his native Australia, where he's been on a rescue mission for the Post's parent company, News Corp. Or at least that's how his trip was described to Post employees: In a July 25 memo obtained by Capital, News Corp. C.E.O. Robert Thomson said Allan had been asked to "provide extra editorial leadership" for Murdoch's struggling Australian newspapers for "to two three months." While he's away, Jesse Angelo, a longtime loyal Post soldier and the paper's current publisher, will "oversee our very talented journalistic team."

For the most part, however, Post employees took Thomson's memo to mean that Allan was being "sent down," and that his days at the Post were over.

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"The common consensus is: I don't think there's anybody who thinks Col will be returning," one insider told Capital. "Most people are expecting that it's not a temporary change," said another. "The obvious message is that Jesse's in charge," said a third, adding: "The website is what's important now. Jesse is the future, Col is the past."

The palace intrigue over who will run the New York Post at a decisive point in the paper's battle for survival mirrors larger forces.

Conversations with nearly two dozen sources, including current and former employees of the Post and News Corp. and people familiar with the inner workings of both entities, revealed a centuries-old news brand whose future is on the line as it grapples with the pressures of an increasingly competitive digital landscape and an owner, News Corp. chairman Rupert Murdoch, who can no longer afford to spill gobs of red ink on his beloved though troubled American tabloid.

As a result of News Corp's recent split into two separate publicly traded entities, the Post is now a creature of a newly formed media company that has shown early signs of volatility in its leadership structure, making it difficult to know what will happen next. And with Allan a hemisphere away, the paper is undergoing significant change under the interim leadership of Angelo, who has reportedly long coveted the top masthead slot.

It's a climactic drama that will continue to unfold in the coming months. And the ending is anyone's guess.

ANGELO'S GROOMING AT NEWS CORP. HAS BEEN two decades in the making, and his stock at the Post has risen even when he wasn't employed at the paper full-time.

Last fall, when Angelo was still editor of News Corp.'s much ballyhooed tablet publication, The Daily, he led a "digital off-site" for Post editors inside the Windgate Room of The Garrison, a stately 300-acre property overlooking the rolling hills and reddening foliage of the Hudson Highlands.

The idyllic setting seemed a world away from Langan's, the dim Irish pub about an hour south where Post staffers are known to congregate after deadline. There was a breakfast spread of assorted pastries, bagels and seasonal fruits. The lunch buffet included shaved fennel and orange salad; rigatoni mezze al forno; and roasted free-range chicken with lemon and garlic. Cocktail hour was held on an adjacent patio.

The two-dozen or so Posties who'd schlepped up to the bucolic Putnam County hamlet of Garrison for the mandatory all-day retreat on Saturday, Sept. 29, were there for a crash course in digital journalism.

For a long time, the paper had been dealing with its mess of a website and an atavistic relationship to the news cycle. Compared to most other large news outlets, it seemed like a dinghy bobbing in the wake of warships.

At the beginning of the event, Allan offered a rare mea culpa from his perch at the back of the room.

"As most of you know, there was nobody less interested in the Internet at this newspaper than me," one person who was there recalls him saying. "It seems I was wrong about that."

Starting now, said Allan, in his '50s and dressed in jeans and a casual shirt but looking all business, it was time for the Post to really get on board with the web.

But it was Angelo, along with Remy Stern, hired last April to run the Post's digital operation under Angelo's supervision, who taught everyone how to go about doing it.

For starters, they acknowledged the paper's abysmal web chops while emphasizing the Post's brand value. There were tutorials about traffic and readership patterns and the like. Alan Murray, who at the time was the online boss at The Wall Street Journal, which also is owned by News Corp., had been brought in to give some pointers, such as examples of how reporters could use their iPhones to file quick turnaround video dispatches from breaking news events. (This was amusing to some of the assembled Post editors since the company phones being issued to their journalists were BlackBerries.)

Since that meeting, gestures have been made to highlight the importance of the web-news cycle over print production. Large monitors displaying live traffic stats were installed near the news and city desks, for instance, a feature familiar to journalists who work for Stern's former employer, Gawker. And the daily 11 a.m. news meeting is being moved up so editors can get an earlier jump on the heavily-trafficked online morning news rush, sources said.

All of it suggests the Post is taking the web seriously in the face of declining circulation and staggering annual losses. Total weekday circulation, which includes digital editions, was down 9.9 percent on average to 500,521 during the six months that ended on March 31, according to the Alliance for Audited Media, which also showed an 18.5 percent drop in the Post's Sunday circulation. Print copies numbered less than 300,000 on average, a far cry from 850,847 during the same period in 1985, or 669,063 in 2005, a few years after Allan took the helm. It's been estimated that the paper has hemorrhaged as much as around $100 million a year, and at least one Murdoch obsessive has already written its obituary.

"The message has gone out," said Ken Doctor, a media analyst. "It's clear that as a company, they need to significantly reduce the losses at the Post and to get on with a digital transition. There are going to be continued pressures on [News Corp.] as a standalone company and there's going to be a much more intense view on what they're doing."

At the center of the Post's digital ambitions is a long-overdue overhaul of the archaic nypost.com. Stern, who holds the dual titles of online managing editor and head of digital strategy and product, is the person overseeing the makeover day to day. The redesign itself is being handled by Hard Candy Shell, a well-regarded firm whose client list includes The Wall Street Journal, The New Republic, Newsweek, The New York Observer and Gawker. Previously slated for the first week of August, the relaunch was pushed back to early September, according to sources with knowledge of the schedule.

Thomson vaguely emphasized the web revamp as central to the Post's strategy in a recent interview with The Financial Times, promising the new site would battle with digital bounders like Buzzfeed for national market share.

What he didn't mention was that the Post just lost a bunch of troops.

Long insulated from the type of big budget slashing that has become a trademark of the modern news industry, the Post recently implemented a rare round of buyouts and layoffs—the paper's first in some 20 years—that reduced the newsroom headcount by 10 percent. The culling targeted old-timers, and therefore erased a good bit of institutional memory in the process. It was carried out in the weeks leading up to News Corp's corporate split on June 28, in which the company's publishing titles were extricated from the television and film cash cows, like Fox News and 20th Century Fox, that had always been there to break their fall. (Those brands are now part of a separate company called 21st Century Fox.)

And there are signs that more belt-tightening is to come, like the recent termination, due to "budget cutbacks," of freelance film critic and 40-year Post veteran Vinnie Musetto (of "Headless body in topless bar" fame).

Several other longtime Post journalists recently resigned to pursue other jobs, including TV critic Linda Stasi (who plans to write a novel while freelancing for the Post) and deputy features editor Isaac Guzman (who will begin a new job as Time magazine's culture editor starting in September). Even fire-breathing columnist Andrea Peyser is on an extened hiatus (although sources said her leave of absence was taken for personal reasons.)

"I think if I went back there now I would know very few people," said Musetto, who retired from his full-time job at the Post in 2011. "Most of the old-timers are gone."

It's not clear how many new people (if any) the Post will recruit to work on the website. A representative for the Post declined to comment on hiring plans. Angelo and Thomson declined to be interviewed for this article and did not respond to questions sent to them through spokespeople for the Post and News Corp.

But if the strategy is hazy, the challenge isn't. The first step, of course, will be to get traffic up: nypost.com had roughly 6.92 million unique visitors during July (an increase of 25 percent from the same month last year), according to the web measurement firm comScore. That leaves them far short of the Buzzfeed goal, but also far short of the Post's more traditional rival, the Daily News, for which comScore counted 15.73 million users (a 31-percent increase) in the same period.

Step 2 is to make some money from it. Mastering the type of audience-targeting technologies that can fetch higher rates is key, said Doctor, as is striking the right tone with the new site.

"In the case of the Post," he said, "they've got a lot of readership but it's a downscale market. That's not particularly helpful since a lot of digital advertising is upscale. So the application of advertising technology will be hugely important."

IF THE POST'S FUTURE IS TIED TO PIXELS, NOT INK, then Angelo, with his deep News Corp. history, innate tabloid sensibilitIies and experience running a digital publication (albeit one that failed), seems like the most logical inside candidate to usher in that new era.

The 40-year-old's rise has been a product of his laser-focused ambition and a lifelong affiliation with the world's most powerful media dynasty: He's been best friends with Murdoch's younger son, James, since they were in Kindergarten.

Nepotism aside, the mustachioed Harvard grad and Manhattan native worked his tail off. He enrolled in News Corp. boot camp as an eager Ivy Leaguer in his early 20s, climbing his way up the tabloid totem pole from coffee-fetcher at The Sun of London, to cub reporter at The Daily Telegraph of Sydney (where he first worked under Allan), to stringer, general assignment reporter, business reporter and, by 2001, deputy business editor at the Post.

Not long before Allan was imported from The Telegraph that same year, Xana Antunes, Allan's soon-to-be-ousted predecessor, asked Angelo what he wanted to do next.

His reply, according to a 2011 profile in Women's Wear Daily: "I want to do whatever I need to do to get into your job."

Angelo's promotions under Allan to metro editor and executive editor followed. But his big break didn't come until late 2010, when Murdoch needed an editor for his $30-million experiment in making a tabloid for the iPad: The Daily.

It didn't go according to plan: With fewer subscribers than expected and a mountain of debt on its back, The Daily was going downhill by last spring. Around that time, Angelo was reconsolidating his influence at the Post—where he'd held onto his executive editor title (just in case)—by becoming more involved in the paper's flailing web operation.

By the time The Daily imploded last December, the writing was on the wall: Angelo would become publisher of the Post while continuing to oversee the direction of nypost.com. And when Allan sailed back to Oz, it was obvious that Angelo would man the ship while he was gone. Two sources told Capital they've heard he's working on a print redesign in tandem with the web relaunch. If true, it would mean that Allan will have been absent during the most momentous period of change the Post has seen in recent years. (A spokesperson declined to comment on the print-redesign rumor.)

On the other hand, Allan's task in Australia may be less insignificant than many of us parochial New York media watchers imagine it to be.

Reading the Australian press documenting his time there, it's clear the difficulties in Murdoch's Australian publishing group are as severe, and as important to the company, as the Post's.

According to one article, in the Australian Financial Review, it was Allan who set his own homecoming in motion. The story is that Allan—or Col Pot, as Aussie journos like to call him—balked at the state of News Corp's tabloids down under during a family holiday earlier this year. So he decided, with the blessing of fellow Aussies Murdoch and Thomson, that he "should head home for a few months to shake things up."

The Australian papers have become a trouble spot for the company, whose recent earnings reports have singled them out for "lower advertising revenues."

But perhaps more importantly, there's a heated federal election on Sept. 7, and Murdoch's papers will be damned if they don't play a role in the defeat of Australia's Labor Party. Allan was not satisfied that the papers were biting hard enough.

The very executive whom Allan was sent back to advise has already resigned after just two years on the job, replaced by an old Murdoch lieutenant. And the Australian tabloid fronts are screaming. ("KICK THIS MOB OUT," wailed the headline on the Sunday, Aug. 4 edition of The Telegraph, referring to the party of Prime Minister Kevin Rudd, who famously spent a memorable evening with Allan at the west-side strip joint Scores in 2003.)

"Col Allan is not a huge power in Oz, he's just the guy whose opinion Rupert trusts most about how News Corp. Australia is running," said Neil Chenoweth, a Murdoch chronicler and columnist at the Australian Financial Review. "Col Allan's target demographic is one old guy in Manhattan."

But within the new News Corp., that's precisely the question. How much larger does one's target demographic have to be to wield power in the company? Does it matter what Thomson thinks of you if Murdoch is on your team?

It's an important question. Sources familiar with their dynamic told Capital that Thomson looks down on Allan. The former is an erudite broadsheet guy reared at venerable titles like The Sydney Morning Herald, The Financial Times and The Wall Street Journal, where he was named managing editor amid the 2007 News Corp. acquisition. The latter's name is synonymous with low-brow tabloidism. Privately, Thomson has made disparaging remarks about Allan, said a source who knows the C.E.O.

One former News Corp. executive put it this way: "Thomson sees himself as a serious journalist and Col as not a serious journalist who doesn't make any money for the company either. So what good is he?"

Rather, what good is he in Manhattan?

"While Australian attention has been concentrated on the local implications of Allan’s return," wrote Rodney Tiffen in the Australian current affairs magazine Inside Story, "its greater significance in Murdoch corporate politics may be that it removes the champion loss-maker from New York. One can imagine Robert Thomson and the accountants, fervently telling him, 'Col, mate, Australia really needs you…'"

With the lines of power so difficult to discern, it's hard to tell what Murdoch could mean to do next with the Post. He could always pull out a wild-card if and when Allan were to step aside. But Chenoweth, speaking of News Corp's Australian editing bench, said he "can't see any of them as likely for the Post." Roy Greenslade, a London-based media commentator and journalism professor, likewise said there's "no obvious candidate" in the U.K., where The Sun also recently saw a shakeup in its leadership.

Allan, who didn't respond to a series of questions from Capital beyond his MacArthur bon mot, has endeared himself to Murdoch by excelling as a tabloid auteur.

Sure, his boozy, colorful history has made him a sort of punchline about anachronism among the New York media cognoscenti—the loud louche presiding over tens of millions of dollars in losses every year for the past 12 years.

But Allan's always resisted the idea that he is nothing more than a Murdoch pet, suffered by the mogul's more successful consiglieres.

“I’ll get fired not because Rupert doesn’t like the stories I put in the paper," he told New York magazine in 2007. "I’ll get fired because we don’t sell newspapers. And that judgment is made not by Rupert, but by the market, and by the audience. And I think that’s pretty democratic. I like that deal.”

We'll know soon enough if that really is the deal, and whether Allan still has reason to like it.