Sept. 29 (Bloomberg) -- The New York Sun, the six-year-old newspaper that has never made money, plans to publish its final edition tomorrow, spokesman Michael Moi said in a telephone interview.

The Sun, begun as a conservative alternative to the New York Times and funded by Bruce Kovner and Michael Steinhardt, warned readers this month that it needed ``tens of millions'' of dollars to cover losses. Top editor Seth Lipsky said on Sept. 4 that he needed more investors, even after the original backers provided additional cash.

The Sun's distress came during a credit crisis that has stymied fundraising and led to the bankruptcies of Lehman Brothers Holdings Inc. and Washington Mutual Inc. Starting in 2002, the newspaper went up against the New York Times and the Wall Street Journal in New York. The Sun made gains in print advertising sales in recent years, Lipsky said this month. Industry ad revenue has posted record declines this year.

Lipsky didn't return a phone call or e-mail seeking comment today. He broke the news to employees this afternoon and read to them a letter that will appear on the tomorrow's front page, the New York Observer reported, citing an unnamed staff member.

The five-day-a-week publication has a print readership of 113,300 in Manhattan, and 2 million unique Internet visitors a month, according to its media kit for advertisers posted online.

In an interview this month, Lipsky said he needed money to cover a ``medium-term business plan.'' He wouldn't disclose the size of the Sun's losses or identify potential investors.

Steinhardt, Kovner

Kovner is chairman of the hedge fund Caxton Associates LLC, and Steinhardt is the chairman of Steinhardt Management Co.

Steinhardt said in an April 2002 interview, just before the Sun printed its first issue, that he invested because the newspaper would be ``a great product,'' not to make money. Kovner and Steinhardt were among 12 investors who put up more than $15 million.

Former Hollinger Inc. Chief Executive Officer Conrad Black also invested the company's money in the Sun at its founding. Lipsky said earlier this month that Hollinger sold its interest before Black was convicted of fraud last year.

Lipsky is married to Amity Shlaes, a columnist for Bloomberg News, which is owned by Bloomberg LP.

To contact the reporter on this story: Sarah Rabil in New York at srabil@bloomberg.net

Last Updated: September 29, 2008 19:05 EDT