The Newspaper Guild stalled for time in an attempt to block massive pay cuts at the Boston Globe, but it strategy may have ultimately backfired, reports The New York Times. In a behind-the-scenes look at the machinations that preceded Guild members’ June 8 rejection of a proposed package of salary and benefit cuts, the Times concludes that the Guild knew about the depth of the newspaper’s financial problems a year ago but adopted a strategy of stalling and secrecy for reasons that aren’t clear. The Guild even refused to sign a confidentiality agreement that would have given it a look at the Globe‘s financial data a year ago.
As a result, Guild members, which include most of the Globe‘s reporting staff, were unaware of the depth of the paper’s financial problems when the New York Times Co. announced on April 3 that it would shut down the Globe unless the union made significant wage concessions. The Times Co. has unilaterally imposed a 23% salary cut while negotiations continue. A vote on a new contract postal is set for next month, and it appears that this one has a better chance of passing, but the Times article basically concludes that the Guild members will get a worse deal as a result of their union’s intransigence.
How much is the Boston Globe worth? Ken Doctor suggests it’s one buck. That’s the price of a gentleman’s agreement in which a buyer agrees to assume the seller’s liabilities in hopes of future profits. The Times Co. has said that the Globe is for sale, but hasn’t named a price. Doctor sees any buyer assuming huge liabilities, including expensive union contracts, ongoing losses and a declining ad market. However, he sees some upside next year when the economy begins to turn and advertising recovers with the help of government-subsidized programs for home and car buyers. This should give a buyer some breathing room to make structural changes hopefully revive the Globe as a profitable entity, whether in print or some other form, Doctor believes.
Meanwhile, the lesser entity in the Times Co.’s 1993 acquisition of its New England — the Worcester Telegram & Gazette — is also for sale. The T&G was reportedly valued at about $300 million in 2000, but now carries an estimated price tag of $10 million to $50 million. The paper does not appear to be in as dire financial straits as the Globe, but it is at best a break-even proposition. the T&G speculates on potential buyers, including a former publisher and financial heavyweights in the area, but no one is saying much of any substance. There is broad agreement that the T&G fills a critical role as the only major news source in New England’s second-largest city.
Journalism Vets Seek New Revenue Streams
A team of veteran journalists and news technologists have joined forces to create a technology that they hope will enhance the Web browsing experience while creating a new revenue stream for content producers. Called Circulate, the tool has elements of social networking, intelligent filtering and subscription management. It basically learns from the user’s online behavior and delivers recommendations for content the user might like. People can easily share information with each other and Circulate will deliver notice of new information as it becomes available.
What may appeal to publishers is the tool’s flexibility to adapt to any payment model, ranging from subscription fees to per-item pricing. Circulate will also become a more valuable tool for targeted advertising as it learns about a user’s behavior. Executives behind the venture have extensive credentials in the news business and the board of directors includes three top officials from the Donald W. Reynolds Journalism Institute at the University of Missouri, where Circulate was incubated.
The Minneapolis Star Tribune plans to exit bankruptcy in the fall, but with a market value of nearly zero. The company, which fell into bankruptcy under the weight of nearly a half billion dollars in debt, has received approval for a plan under which it would emerge from Chapter 11 with $100 million in debt and a market value of no more than $144 million, including real estate. All the current owners would basically exit the business and a new board of directors would be formed to appoint new management.
A new poll by Zogby International finds that only one in 200 people believe newspapers will be a dominant source of information in 2014. What’s more, 56% of adults say that if they were only allowed one source of news, they would choose the Internet, compared to 41% for television, newspapers and radio combined. What amazed us is that 38% of the more than 3000 respondents said they believe news from the Internet is the most reliable, followed by television at 17% and newspapers at 16%. So the idea that the Internet is a vast cesspool of misinformation does not appear to be deterring public trust. (Via Mark Potts)
The Gannett Blog, which will be shut down permanently on July 19, is going out with a bang. Editor Jim Hopkins is reporting that Gannett plans to lay off 4,500 people in its newspaper division and cut salaries in its broadcast division. The bright spot: no new furloughs the rest of this year. Hopkins says the ax is due to fall on July 8. Gannett has already cut 4,000 positions, or about 10% of its workforce, over the last year. This would be the biggest round of layoffs yet.
About 500 unionized workers at the Cleveland Plain Dealer will take an 8% pay cut and 11 unpaid days off as a way of avoiding further layoffs. Meanwhile, the paper is launching yet another redesign that the editor says will make more efficient use of dwindling space (below).
The Albany Times Union is set to cut as many as 45 jobs in a bid to reduce operating costs by 20% after it failed to come to terms with the Newspaper Guild on a new contract. The proposed contract would have allowed management to outsource any job and lay off workers without respect to seniority. It was rejected 125-35. The union says the new layoffs are a punitive step and vows to challenge them.
The government of France has stepped up its novel rescue plan for the French newspaper industry, offering to give 18- to 24-year-olds a free newspaper once a week for a year. The original plan, announced in January, applied only to 18-year-olds. The government is investing €600 million in its newspaper rescue plan.
Is Walter Cronkite near death? CBS News was reportedly told a week ago to update the legendary newsman’s obituary, but friends are now saying rumors of Cronkite’s impending demise are greatly exaggerated. Commentator Andy Rooney stopped in to visit the 92-year-old Cronkite recently and says “Walter’s going to live for a while.” A family friend says America’s most trusted man is losing his memory and is confined to a wheelchair but the death is not imminent.
Garrison Keillor is going to miss The New York Times, so he’s adopted a strategy of reading every word of every issue, forsaking all other activities in the meantime. He’s up to 1999 and should be busy for quite a while. Keillor spins his story in typical Prairie Home style, and an audio version is also available.
This entry was posted on Monday, June 22nd, 2009 at 12:03 pm and is filed under NewMedia, Newspapers. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.