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Rising Price of Newsprint Forces Papers to Cut Costs

Just as they are recovering from a slump in advertising, newspapers in the United States are struggling with a new problem: how to manage the impact of double-digit increases in the price of newsprint, their basic raw material.

Newspaper publishers have long known that newsprint prices would rise. Still, many have been surprised by the speed and magnitude of the inflation. Some are shrinking the size of their papers and the stories printed in them. Some are raising newsstand and subscription prices. Others are cutting costs, from the mailroom to the newsroom. Layoffs are on the rise.

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A robust economy has fueled a growth in newspaper advertising, which had languished for many years. But the economy's vibrancy also has increased demand and prices for newsprint.

Newspaper ad revenue grew in 1994 for the third year in a row: by 7.5 percent, to $34 billion. That was the steepest rise since 1985, and a further rise of 7 percent is expected this year, according to the Newspaper Association of America, based in Reston, Va.

The price of newsprint, which represents about 20 percent of a newspaper's expenses, rose more than 33 percent in 1994.

By some industry estimates, the price of newsprint will grow another 25 to 30 percent this year - to near or above $600 per ton. That's about $200 more than in 1992.

Two of the country's largest newspapers are cutting staff because of newsprint inflation. The Wall Street Journal is laying off close to 100 people, while The Miami Herald is eliminating 30 to 40 positions through attrition.

Newsprint manufacturers slashed prices and closed mills during the recession in the early 1990s as demand dropped. That tightened supplies. Aggravating the shortage were strikes last year that shut four paper mills in Canada.

Some newspapers have tinkered with raising newsstand prices - a delicate move, because it could drive away readers at a time when the industry is battling to maintain or increase circulation.

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France's Le Monde gets a makeover

There are still no photographs. But a splash of red in a front-page political cartoon signals that Le Monde, the admired but often stodgy mainstay of French newspapers, has followed the industry trend with a new format.

News briefs set off by blue bullets grace the previously gray front page. The type is cleaner and easier to read. Articles are shorter, and there are more of them. New sections deal with business, science, and sports.

These are cautious but noticeable changes for the 50-year-old newspaper, which has been losing readers for the past decade.

Some younger readers who grew up with all-news radio and television say they have been turned off by the paper's often ponderous style and laborious coverage of national politics and that the paper often neglects more down-to-earth issues.

Le Monde's editors hope that the new format at the old price - about $1.30 - will win back former readers, lure new ones, and once again make the paper required reading in elite intellectual circles.

Possible changes in tax break could obstruct huge Viacom deal

US cable-television giant Viacom Incorporated's plan to sell its cable systems to a minority-controlled partnership could hit a snag if congressional tax-writers make good on proposals to change a longstanding tax break.

Yet to be completed, the estimated $2.3 billion deal with entrepreneur Frank Washington, who is black, would create the largest minority-owned cable TV system in the US.

House Ways and Means Committee Chairman Bill Archer (R) of Texas says he is considering retroactive changes or even repeal of the Federal Communications Commission's tax certificate program designed to bolster minority ownership of communications outlets. Viacom is expected to defer between $280 million and $400 million in capital-gains taxes under the program. People involved in the deal say there are no immediate plans to restructure the transaction.

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