Have I got news for New York

For decades, New York has been a knacker's yard of newspaper dreams for owners, reporters and readers alike. Time and again, New Yorkers have watched bemused as new dailies launched, fluttered and died with enormous losses - bemused as much by the hubris of each venture as anything else.

In 1995, New York Newsday, the metropolitan edition of the successful Long Island newspaper, closed after 10 years with $100 million (£70 million) losses. In the 1980s, the Daily News attempted an evening paper which died within three years. In the 1970s, The Trib tried to surf the end of an historic newspaper strike and lasted three months. To this day, Rupert Murdoch's New York Post is said to lose $30 million (£21 million) a year.

Yet they keep trying: media buzz rages over the recent New York Observer scoop that a new daily, the New York Sun, will be launched in the first quarter of 2002. Response to the revelation was, at first, almost entirely negative due to the slump in newspaper advertising. The participants were apparently caught off-guard by the leak, and most have refused to comment.

It was the name of Conrad Black among the investors that raised eyebrows. His company, Hollinger International, admitted a 12.5 per cent stake, rising to $2 million (£1.4 million) over two years, with 10 investors ponying up $16 million (£11 million). Hollinger spokesman Paul Healy played down Lord Black's role, describing it as merely a "toe-hold investment", with Black acting as "one of seven directors" of the paper. Still, the punters wondered, what could he be thinking? Surely he knew that the venture was bound to fail. Neither he, nor fellow arch-conservatives and investors Michael Steinhardt and Robert Hertog, renowned in New York for their hard-nosed business savvy, would willingly court public humiliation. So what is their game?

According to Lucianne Goldberg, the one-time agent for Linda Tripp, now neo-conservative radio host, who knows many of the players as political allies and friends, "it's just a game that rich boys play - it's not going to cost them much and they want to shape political opinion in New York. The key is starting small. It's almost like a local shopper (free-sheet) which Conrad Black himself could deliver." With the paper's format planned as a six- to eight-page broadsheet, and a 6,000 to 10,000 print run, the newsprint cost is held to a minimum, according to Bartle Bull, one-time publisher of the Village Voice. Others applaud the peculiar timing, saying that the depressed business climate will lower expectations. "If they all fall flat on their face, nobody will laugh," says Goldberg, "but they would lose money even in a boom economy, only they'd lose more. They expect to lose money - look at the [weekly] New York Observer, everybody knows it loses money. That's not the point. The point is being in the game."

Based on the known protagonists, speculation has it that the paper is intended to carry a strongly pro-Israeli message. The two editors, Seth Lipsky and Ira Stoll, are known for their hawkish views on matters Jewish. Lipsky, now a columnist for The Wall Street Journal, was the editor of The Forward, a Jewish journal of opinion from which he parted over his strong conservative views. His colleague, Stoll, publishes the website, smartertimes.com, as a daily critical commentary on The New York Times. Both believe that the Times is too liberal and critical of Israel. Both have studiously refused comment: Lipsky, reached by phone, denied the speculation, and pointed out that Stoll's website has already posted information on the paper's intention to be a commentary on local state and city politics.

What then is Black's motivation? He can hardly be an avid follower of New York's municipal affairs. And it's hardly a secret that Black has wanted a piece of the city's newspaper industry. He courted the New York Observer over many months and finally walked away empty-handed last year. Insiders say that its owner, Arthur Carter, had long floated the asking price of $110 million (£77 million), a vast amount for a paper estimated by some to lose around $10 million (£7 million) a year. The story goes that Arthur Carter and Black had agreed to just under $100 million (£70 million), and the deal was set to close on a Sunday at Carter's Upper East Side residence. With the pens poised, inside sources say, Carter suddenly introduced new deal-breaking conditions.

According to Sam Shulman, former publisher of the New England Monthly, the Observer and the New York Sun will draw the same readers and advertisers. In other words, Black's new venture will put pressure on Carter's finances. Carter may even be forced to sell - this time with no deal-breaking conditions.