The Daily, Downsized (4:51 PM): Peter Kafka at All Things D dropped a bombshell this afternoon: According to "people familiar" with the plans, Rupert Murdoch's iPad-only newspaper, The Daily, is planning to lay off one-third of its staff (or: "The publisher plans to tell its workers today that it will fire 50 of its 170 employees").

That publisher is Greg Clayman, who with his wife, just closed on a $1.2M co-op in Brooklyn Heights. This comes on the heels of Daily editor-in-chief Jesse Angelo's recent reassurance to the iPad-paper's staffers of their own sturdiness, in spite of "haters" who would argue otherwise: "As for the latest misinformed, untrue rumors of our imminent demise, I would urge you to ignore them," he wrote in a published memo on July 13. They may now be slightly more difficult to ignore.

That said, (despite what some higher-ups at The Daily might think of the "haters" at The Observer), we wish them and their staffers the best of luck going into today's Big Meeting, which we hear just ended. And that said? If you're at The Daily, and know anything about what's going inside their conference room right now, or if you're not at The Daily any more, feel free to fill us in on what's going on. You can also call or text this reporter at 646-784-0038 with any details.

4:55: Another public memo has been published by Jesse Angelo, addressed to the publication's "Readers and Friends," this one explaining that the sports and opinion sections are being changed.

We believe our Opinion and Sports sections created fantastic and engaging original content, and we know they had many fans (myself included). But they also garnered the lightest traffic and reorganizing them will allow us to focus on the areas that have proven most popular, like original reporting, visually-impacting stories, great photographs and video, infographics and award-winning design.

In other words, the Opinion and Sports sections as they were staffed internally are dunzo. They're also locking The Daily in "portrait" mode on the iPad, which makes us wonder who on the design and coding teams—two of the most crucial components of the operation—got handed pink-slips today.

4:56: A tipster tells us that everyone who got laid off still gets to keep their News Corp-issued iPad, if they had one. So...there's that.

5:00 PM: One associate sports editor, Emma Span, Tweeted out earlier: "Yep, first found about my own layoff via Twitter. I feel just like an MLB player!" To make it even worse: "No venting to Gawker for me though. I liked it there."

5:05 PM: We're now told that it's the entire sports and opinion staffs that got hit, as well as some people on the primary news staff. Those names include: Deborah Hastings (news writer/producer), Melissa Arseniuk (multimedia producer/writer), Carmel Melouney (news reporter), Emily Canal (news) Elizabeth Semrai (news/travel editor), Chavie Lieber (news reporter), and Josh Bernstein (investigative correspondent). We hear that those names are news side-cuts, and that there shouldn't be many more where that came from.

5:16 PM: Hearing that Jesse Angelo is holding a staff meeting at 6PM. Also, side-benefit of getting laid off from The Daily? "I have to say it's a relief to be able to publicly mock Fox News again." The Power of Optimism.

5:18 PM: The Daily's national sports columnist, Dan Wolken: "To answer questions, yes, The Daily laid off sports staff today, including me. I'll be fine. Enjoyed the opportunity tremendously."

5:23 PM: We're hearing the severance package details leak out as well. One tipster got two months. Curious to hear what others got. This could be as a result of Worker Adjustment and Retraining Notification (WARN) Act mandates, or good will! We're not lawyers enough to know.

5:32 PM: The press release from Rubenstein PR reads: "A total of 50 full-time employees, 29 percent of the full-time staff, will be released." It also confirms what we've been hearing about the opinion and sports sections. Still no word on whether or not the fates of The Daily's office in L.A. (including former Page Six maestro Richard Johnson) have been affected or not.

5:55 PM: The D.C. bureau—which, really, was two people (Laura Parker and 18 year-old White House reporter Myles Miller)—is done.

6:01 PM:: We've now heard the "two months severance" number multiple times. Also, from a now-former Daily employee: "They [management] started to look really at all the finances of everything. Everyone thought it was going to be fine. Everyone said 'all this talk [about potential layoffs] is not true.'"

6:21 PM: Buzzfeed's John Hermann files a story about The Daily where one staffer notes that "edit was understaffed." Another tipster writes in to ask two questions: Will senior staffers be taking a pay cut? And will laid off staffers be released from the non-compete agreement that bars them from working for the USA Today, the New York Times, and People for a year after employment with The Daily has ended? Michael Calderone at the Huffington Post noted of the non-compete in May:

Upon joining The Daily, staffers agree to not work for the following "directly competitive” outlets for at least one year if they leave or are fired: USA Today, People, and The New York Times/New York Times Magazine.

6:35 PM: A source familiar with the situation tell us that the L.A. office of The Daily is closing, but that Richard Johnson will remain with the company, and in L.A. No word on the rest of his staff.

7:15 PM: Meeting's out. In it, Jesse Angelo and Greg Clayman insisted that News Corp backs The Daily, and that it is a success, but that the numbers simply weren't there for sports and op-ed (though no word was given on the news side-cuts). Sports editor Chris D'Amico (who one tipster called a "BEAST" in a complimentary manner) will be staying on as managing editor. We also heard The Daily's copy desk got hit hard, and that the L.A. bureau staffers who worked with Richard Johnson have been laid off, as well (as previously noted, Johnson will be staying with The Daily).

Everyone hit by layoffs at The Daily, however, will be receiving a "discretionary bonus" (taxed at the higher bonus rate) from the company in addition to their two-months severance pay. When the benefits run out, Daily staffers are eligible for unemployment benefits. It comes to many as a surprisingly sweet severance package on behalf of News Corp, but it's worth noting that layoffs hit some staffers right before the equity in their 401Ks could vest. They are also being encouraged to apply within News Corp. for new gigs, but most people probably won't considering that they'll lose the two months severance if they take a different job with the company.

The NDA/non-compete agreement will not be enforced for the laid off staffers, who are free to apply to jobs at USA Today, People, and The New York Times/New York Times Magazine, as well as CNN, The Guardian, and Huffington Post/AOL (which were also named in the non-compete). The non-solicitation agreement remains intact. Meanwhile, as it turns out, some people do not get to keep the iPads, while others do.

- - -

Elsewhere, in today's media news:

The DNA of DNAinfo: What's it like to work in the blisteringly exciting nu-newsroom of hyperlocal startup DNAinfo?

"Check your parks/playgrounds and see whether the sprinklers are on," wrote Billy Gorta, a senior editor who came to DNAinfo from the New York Post, in an email to staff on June 20. "Need outraged parents if they're off or pics of happy kids if they're on."

Joe Pompeo at Capital New York has the most in-depth piece on DNAinfo written yet. Other revelations: They'll be opening up shop in Chicago this Fall, there remains no great theory for why their incredibly rich backer Joe Ricketts is funding a hyperlocal news other than 'he thinks there's money to be made,' they took James "Jim" Fanelli from his job as assistant city editor at the New York Daily News earlier this month, and Ricketts isn't a fan of Obama. It is a wonderful read and should leave you with very few questions as to how that happened and how it's going to continue to happen. [Capital New York]

Pulitzer-Nom Pete Non Times: Sports reporter Pete Thamel is leaving The New York Times for Sports Illustrated after nine years.  Thamel was nominated for a Pulitzer by the Times in 2006, FBNY notes. [The Big Lead]

Hoda-unnit? The New York Daily News made a big fuss on their front page today about Hoda Kotb, NBC's fourth-hour-of-Today anchor and one-half of the reigning on-air boozing championship team with Kathy Lee Gifford. They claimed that Kotb, who was supposed to be on vacation, was called off vacation to be flown into her Today chair to save the tuchus of Savannah Guthrie, currently hosting for Today at the Olympics. But Hoda was always supposed to be going to the Olympics, an NBC flack told Fishbowl NY. They even had a Facebook poll about what Hoda should do when she's there ("Make a Drinking Game Out of The Changing of the Guard" was, sadly, not an option). Whoops? Who knows. Fishbowl NY filed the post on the Daily News story at 11:09 AM. The Daily News—which had posted the story at 2AM—updated it at 2:01 PM. The new penultimate graf on the story: "Our network insider maintains that Kotb's actual departure was up in the air and that Thursday's call came because of the sub-par ratings for the pre-Olympics coverage against the 'Today' show's rival." [FBNY, NYDN]

Tips, whatever? Put 'em here. But we're going to spend the rest of the day updating this Daily news.

fkamer@observer.com | @weareyourfek

After congratulating the staff on its new weekend magazine, Mr. Angelo wrote:

"As for the latest misinformed, untrue rumors of our imminent demise, I would urge you to ignore them. Since before we launched, our dear friends at competing media outlets have done their best to wish us ill and gleefully 'report' on what they think is going on here. The truth is we have over 100,000 paying subs who are renewing their subscriptions at a 98% rate and fantastic advertisers who love our brand and keep coming back for more because they get results. Pay attention to them, not the haters.

This is the truth about the modern media business - all outlets, including the ones writing about us, are under pressure to prove themselves as businesses.  We are no exception, and to be sure, we will need to continue to evolve, adapt and change in order to compete and be successful.  As something new and different, we are an easy target for erroneous wishful thinking. But make no mistake, we will be nimble and we will compete."

Now The Daily staffers can stop "freaking out."

During the first week of Newsstand--the Apple iOS 5 feature which is making marketing iPad publications much easier--News Corp.'s Daily was the top-grossing app.

“It’s intriguing that an upstart publication is beating Condé Nast titles and the New York Times,” editor Jesse Angelo told Keith Kelly yesterday.

Indeed, The Daily outsold National Geographic, WIRED, The New Yorker, The New York Times, GQ, Cosmopolitan, Martha Stewart Living, Popular Mechanics and Popular Science, which have both much larger print circulations and a higher monthly price point.

The confidence is contagious.

Today the Daily's Tumblr posted a screenshot of The New York Times iPad app, which had not been updated to include the breaking news about Qaddafi's death.

"It’s 1:00pm. Something is missing from the front page of the New York Times’s iPad app…" they wrote.

Mr. Angelo also told the Post that of the 130,000 readers of The Daily (10k more than Edmund Lee reported last month), 85,000 pay for it, and they convert free trial-ers to subscribers at a rate of 12-15%.

Mr. Frere-Jones's deputy, Claire Howorth, formerly of The Daily Beast and Vanity Fair (and powerfully linked to The Daily's news editor Mike Nizza), will take over the day-to-day duties of editing the Arts & Life section. In an internal memo, editor Jesse Angelo lauded Ms. Howorth's Fashion Week coverage.

He explained that Mr. Frere-Jones will become an editor-at-large. Mr. Angelo thanked him for his vision and friendship, and said he will remain part of The Daily family. He said that Mr. Frere-Jones sought more flexibility in his schedule.

Perfection? Half a year ago, Mr. Allan had a less sublime quarry in his sights: the Daily News. But then, after years of slow-closing pursuit, he overtook it—the rowdy pirate ship of Rupert Murdoch’s News Corp. passed Mort Zuckerman’s wheezing steamer in daily circulation. For those who missed the news splashed on a Times Square jumbo screen, Mr. Allan’s paper went from being known as No. 2 in the New York tabloid market to being No. 5 among American dailies.

Now the Post editor—who was never shy about lobbing cannonballs and flaming pitch when the Daily News was in front—was reluctant to speak ill of the competitor.

“The Post’s circulation continues to grow,” Mr. Allan, 53, said by phone on Feb. 20. “I think that I’m hopeful that the March numbers will show some further growth.”

With a new year on hand and open seas ahead, Mr. Allan moved some officers up on the quarterdeck. On Jan. 25, metro editor Jesse Angelo, 33, became a managing editor and Mr. Allan’s second in command; business editor Dan Colarusso, 40, took Mr. Angelo’s place on metro. The evening of the newsroom announcement, Mr. Allan took the two to dinner at Elaine’s.

The same day that Mr. Angelo and Mr. Colarusso moved up, executive editor Colin Myler left to edit Mr. Murdoch’s News of the World in London.

“These changes were not brought on by the departure of Colin Myler,” Mr. Allan said. “I intended to make these appointments back in early December.”

Mr. Angelo is a young man, but an old Murdoch hand: He got to know Mr. Murdoch’s son James in kindergarten, at the Trinity School in Manhattan, and he served his early years in the journalism trade under Mr. Allan at Sydney’s Daily Telegraph.

Mr. Angelo came to the Post as a Page Six freelancer in 1999, then advanced through the ranks in the business department. In June 2001, Mr. Allan—shortly after taking charge of the Post—promoted Mr. Angelo to metro editor, coinciding with the firing of five senior staffers in what was dubbed the “Friday morning massacre.”

“I think his instincts are very good,” Mr. Allan said. “He is a New Yorker by birth and life. He’s had tremendous newspaper experience abroad. He’s the kind of young man who would be successful anywhere. The instincts that he has, and the leadership abilities he has, make him uniquely able to be a terrific newspaper executive.”

Mr. Allan said that Mr. Angelo isn’t a direct replacement for Mr. Myler. “Colin Myler was an accomplished newspaper editor in the U.K. before he came here,” Mr. Allan said. “So I think Jesse’s role is a little more different that Colin’s was. He’s running the back bench, and he’s working with the other editors.”

Officially, Mr. Angelo is one of three managing editors. The others are Joe Robinowitz, who divides his time between the Post and News Corp.’s community-newspaper group in Brooklyn and Queens, and Chris Shaw. “Chris works with Lauren Ramsby on the weekend section,” Mr. Allan said. “He has principal carriage on our Web site.”

Mr. Angelo declined to comment on his new duties.

“It’s a bit like the military,” said the 40-year Murdoch-veteran reporter Steve Dunleavy. “When there’s a vacant spot, and there are people who have proven themselves brilliantly, they move up.”

“There was no gossip around the water cooler,” Mr. Dunleavy said.

(Water cooler, Mr. Dunleavy?)

There has been some staff grumbling about deputy metro editor Michelle Gotthelf missing out on the top metro spot—though a staffer made a point of not criticizing Mr. Colarusso, who is widely viewed as a very capable editor.

“Michelle’s been in the seat and doing the job,” the staffer said. “She probably deserved it.”

But a senior Post staffer had a different take. “People who work on the [metro] desk, including Michelle, have sat in that seat, and had many opportunities to prove they could do the job,” that staffer said. “I’d be surprised if anyone felt that really, truly, she was more capable than the person who got the job.”

“Michelle’s a star,” Mr. Allan said. “She’s really a terrific editor. Her career in this place has not peaked by a long shot.”

Regardless, Mr. Allan appears to have the crew he wants for the Murdoch flagship.

“I think News Corp. has a deep newspaper culture,” Mr. Allan said. “A lot of companies have a good newspaper culture, but they have not been as successful at selling newspapers.”

Prodigal Sun Staffer to Launch Politics Site

Ryan Sager is a young conservative in a hurry. The 27-year-old journalist published his first book this past August, on rifts within the Republican party, and already has another one in the works: a John McCain biography due later this year.

But at the same time, Mr. Sager is going back to where he started: He has been hired as the online editor of The New York Sun—the daily broadsheet where he was one of the founding staff members in April 2002.

The previous online editor, Daniel Freedman, vacated his post on Feb. 14. That was also the date of his last post on The Sun’s “It Shines for All” blog.

Reached by phone on Feb. 19, Mr. Sager said that he wouldn’t be taking over Mr. Freedman’s blogging duties. Instead, he’s planning to launch a new political Web site next month, NYSunPolitics.com.

Managing editor Ira Stoll said that Mr. Sager’s original job interview at The Sun predated the arrival of office furniture.

“I think we were sitting on cardboard boxes,” he said.

Mr. Sager, whose author photo displays near–Christopher Hitchens–grade rumpling, joined the fledgling Sun as a news assistant a year after graduating from George Washington University. His duties at the startup included writing editorials, editing copy and proofreading pages.

“In typical Sun fashion,” Mr. Stoll said, “we had one person doing about five jobs.”

After ascending to the position of editorial-page editor at The Sun, Mr. Sager decamped for the New York Post, where he spent two years on the editorial board. In 2005, he signed a contract with John Wiley & Sons for his first book, The Elephant in the Room: Evangelicals, Libertarians and the Battle to Control the Republican Party. When the publication date was moved up to before the 2006 midterm elections, Mr. Sager said, he had to leave the Post to write full-time.

According to Nielsen BookScan, The Elephant in the Room has sold 1,300 copies.

Mr. Stoll described the process of rehiring Mr. Sager as a “longtime mutual courtship.”

“We’ve been trying to get him back since he left,” Mr. Stoll said.

Mr. Sager said he approached Mr. Stoll and editor in chief Seth Lipsky in December with the idea of an all-politics Web site. He described The Sun as “a young, nimble paper.”

Mr. Sager said he expects the site to include political blogging, dispatches from political correspondent Josh Gerstein and writing by Sun columnists. He plans for it to compete not with the other New York dailies, he said, but with the sites aimed at politics junkies, such as RealClearPolitics.com and the recently launched, lavishly bankrolled Politico.

“We certainly come at things without the immense backing that Politico has,” said Mr. Sager. “It’s a more specialized site, trying to take advantage of our connections in New York.”

What advantage might a New York perspective give in the 2008 election?

“[A]ny New York newsman worth his salt,” Mr. Sager wrote in an e-mail, “has to be pulling at this point for the perfect home-state storm: Rudy for the Republicans, Hillary for the Democrats and Bloomberg for the yet-to-be-formed Michael Bloomberg Party.”

And what about that other free-range Republican? Mr. Sager’s McCain book is slated for publication in October 2007, with Palgrave Macmillan. He described it as “the first non-hagiographic book ever published” about the senior Senator from Arizona.

That gives Mr. Sager’s past and future boss eight months to get through his previous volume before the new one arrives. “I have to admit, I haven’t read every word of his book,” Mr. Stoll said. “Not because I don’t want to, but because I’m busy running the newspaper.” (Mr. Stoll also became the father of twins earlier this month.)

However, Mr. Stoll said that he’s acquainted with the book’s premise of a conflict between religious and economic conservatives. “Personally, I’m not as sure as he is that the conflict is irresolvable, or guaranteed to result in some great schism,” said Mr. Stoll.

“There is room at The New York Sun for people who disagree with me,” Mr. Stoll added later.

Portƒolio Still Expanding

With only two more shopping months till Portƒolio launches, the Condé Nast business glossy is still grabbing staff off the shelves of other media outlets. Latest in the cart: Bob Roe, most recently an assistant managing editor at Sports Illustrated.

“It’s the chance to do a great magazine,” Mr. Roe said.

It’s also a chance to leave the cost-chopping old titles of Time Inc. for Si Newhouse’s spend-money-to-make-money startup. Was Mr. Roe drawn by the pioneer spirit of a magazine launch? The chance to be there at the beginning?

“No,” Mr. Roe said. “I wouldn’t mind coming over here after they’ve slayed every dragon and it’s widely acknowledged as the best magazine ever published.”

Portƒolio editor Joanne Lipman (the ƒ is for ƒavings!) declined to comment on the latest acquisition.

Before going to Sports Illustrated, Mr. Roe was executive editor of Los Angeles Magazine.

Metro editor Jesse Angelo and politics editor Gregg Birnbaum must be particularly pleased with the cover story, which actually manages to make Al Pirro look even worse: we knew he had mis-spent business funds to fight, and lose, a paternity suit; now we learn that he bought his previously-ignored daughter a car the day Jeanine announced her Senate run, a "glaringly obvious" move, as his ex-lover helpfully explains.

And then there's this, sure to impress Mike Long: "She said the two split after she told Al Pirro that she was pregnant and he told her to get an abortion. "

Then there's Dicker's report -- which mirrrors what I've been hearing -- that there are senior Republicans basically rooting for Pirro to fail, also an important story. Along the way, Leslie Snyder gets savaged, Margarita Lopez takes another hit, and we read a nice little tidbit about Hillary.

Enough of the rewriting; it's an impressive paper today. Which isn't to say we wouldn't mind a little credit when they take our stories.

UPDATED: At the urging of an enraged Postie, this item was updated to spread internal credit around a bit more fairly.

It was a Thursday night in June 2001 when New York Post editor in chief Col Allan asked a young editor on his staff to come out for a drink. The next day was to become known at the Post as the "Friday-morning massacre," when Mr. Allan-who had just been brought to town from Australia to remake the tabloid daily-fired five senior staffers, including columnist Jack Newfield and Stu Marques, managing editor for news.

Did his 27-year-old deputy business manager, Jesse Angelo, want Mr. Marques' job?

Mr. Angelo said he was "gobsmacked" by the meeting. He never thought he'd get this kind of chance-not this soon, anyway. And these people-the ones who were being fired-were colleagues, even friends. He told Mr. Allan he'd think about the offer, but he knew he was going to take it.

"There was no way I was going to say no to it," Mr. Angelo said.

The next day, before leaving the newsroom for good, Mr. Marques pulled Mr. Angelo aside and gestured to the noisy warren of cubicles that is the Post's newsroom.

"You take care of them," Mr. Marques said.

"That had a big impact on me," Mr. Angelo said. "There's a difference between getting good stories-and breaking news and putting out good front-page pieces and selling newspapers-and having to look out for people, to make sure they have what they need to live a good life. That's what I try really hard to do. It's not an easy thing."

Today, Mr. Angelo, now 30, is an essential part of the team brought in by publisher Lachlan Murdoch to do one thing: surpass the Daily News in circulation and make the Post the best-read tabloid in New York. With six consecutive quarters of 10 percent circulation growth, things are looking pretty good for Mr. Murdoch and Mr. Angelo.

Research showed the paper was considered too conservative by some readers, so the new Post ran local stories-the kind of pieces that don't easily divide the readership over political sensibilities-and saw impressive gains. Mr. Angelo's instinct for local news has been a big part of it. "He's just a very smart young guy," Mr. Allan said. "I was impressed with his confidence and his ability to lead a conversation and to motivate people."

Mr. Allan said the decision to elevate Mr. Angelo was his, not the Murdochs'-even though Mr. Angelo's life and career have been tied to the Australian clan since kindergarten, when Mr. Angelo first met James Murdoch, the younger of Rupert Murdoch's two sons, at the Trinity School in Manhattan.

Best friends since then, they both went on to Harvard, where, during his sophomore year in 1993, a restless, bored Mr. Angelo wrote to Rupert "begging" him for a job. The one he got was at Mr. Murdoch's splashy London tabloid, The Sun. Fetching coffee to start, he began reporting and then one day called his mother to tell her that he didn't want to go back to school. This is where he wanted to be, where he'd have his real education.

"It was the only time I heard my mother curse at me," Mr. Angelo recalled. "She said, 'You got into Harvard-you're going to get your fucking degree!'"

So he did. But he was back in the Murdoch fold soon enough, working under Mr. Allan at The Daily Telegraph in Sydney, where he stayed for two and a half years. There he reported from the general-assignment desk, covering "crime, death, disaster, murders … the fun stuff."

When Mr. Angelo returned to his hometown of New York-he's a native Upper West Sider-he had no job and ended up screwing around for a couple of months before the call came. The New York Post wouldn't hire him as a reporter, but he soon parlayed freelance work at Page Six into a full-time job just the same.

"It takes more than one 'no' to deter me," he said. Once in-house, Mr. Angelo did time on the Sunday paper, then spent a year covering Wall Street. He was one year into his job at the business section when Mr. Allan tapped him for his current gig.

It was hard at first: a young man-a shrimp with less than a decade of experience-directing people in their 50's and 60's. But Mr. Angelo said both sides have made it work. And Mr. Allan seems pleased.

Asked about the chatter that he will someday replace Mr. Allan, Mr. Angelo would only repeat the company mantra: "I don't think about things like that," he said. "Right now we're focused on beating the Daily News."

His boss, however, seemed a bit more willing to take that look forward.

"Jesse will determine where Jesse goes," Mr. Allan said. "He will decide that. He's not going to be looking for handouts anywhere."

-Sridhar Pappu