BUSINESS PAPER OFF TO ROCKY START:U.K. SUNDAY START-UP PLAGUED BY LEGAL, MONEY PROBLEMS

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[london] Advertisers and readers in the U.K. have shown very little interest in Sunday business newspapers, and the latest entry, Sunday Business, doesn't look like an exception. In fact, Sunday Business is rapidly becoming a case study of how not to launch a newspaper.

From the first issue on April 21, the publication has been dogged by financial problems, legal disputes and lack of advertiser support. An ad campaign was canceled as its agency, Arc, quit.

National Sunday newspaper publishing is more developed in the U.K. than in other European countries. But the field is overcrowded.

"In the U.K., people want a more relaxing read on Sunday, and we're already seeing a decline in readership on Sunday," said David McMurtrie, director of international media at MediaCom, the media-buying arm of Grey Advertising.

But it has not discouraged maverick media entrepreneur and editor Tom Rubython from setting up Business Newspapers Publishing (UK) to launch Sunday Business. Previously, Mr. Rubython had founded and edited several business-related publications.

Contributing about $3 million of his own money, Mr. Rubython, 40, has hired 120 journalists and media executives to create the newspaper.

But despite an original $15 million planned investment, including a $4.5 million marketing budget for the launch, the publisher was immediately hit by financial and legal woes.

The first issue's print run dropped to 350,000 copies from a planned 600,000 because the original printer, West Ferry Printers, quit when Business Newspapers failed to pay in advance.

Arc, hired to create the TV and outdoor launch campaign, also pulled out when no money was forthcoming. The publisher is in negotiations with agencies such as Knight Leach Delaney and John Ayling & Associates to take over the campaign.

The biggest blow came with the pullout of a major investor, a company owned by India's Hinduja family (who are shareholders in India's Zee TV channel).

Meanwhile, Sunday Business Post in Ireland was granted an injunction to stop Sunday Business from coming out in Dublin. The Irish paper complained that the similar title and typeface would confuse readers. Sunday Business' Irish edition will now be called Business on Sunday.

Circulation for Sunday Business' first issue failed to reach the 150,000 minimum guaranteed to advertisers.

Sunday Business Marketing Director Phil Lawlor, 39, remains optimistic. "I've worked for several media moguls, [including] Rupert Murdoch, and .*.*. I don't plan to make a career mistake at my age," he said.

Agency executives, however, are not convinced.

"I don't think Sunday Business is going to set a trend. Most businesspeople have a sufficient diet of information through existing media," said Tony Manwaring, managing director of Initiative Media:London.

CIA MediaLab, the research subsidiary of CIA Medianetwork, said its survey among Sunday newspaper readers concluded that 89% are unlikely to read a specialist business Sunday title.

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