401(K)illed

As reported by Gary Scott, MediaNews Senior VP of Human Relations announced that the company is suspending their fund-matching program for employee 401(K) investments.

But all is not lost. From Janiga's email to Guild rep Vicki Di Paolo:

Based on the provisions of the collective bargaining agreement in effect for the Daily News and the status quo position of the collective bargaining agreement at the Press-Telegram the above is not applicable to the guild represented employees at those operations."Unless otherwise negotiated by the parties, the matching contributions will remain in effect."

It's unfortunate that this is happening to any employee, and you have to wonder just how much they could possibly save. The fund matching cap is low enough to minimize employer expenses already. But our members can be assured that their rights have been secured, and the provision remains unchanged for them.

An offer they couldn't refuse?

We found a link last weekend on Gary Scott's blog to this story from the Rocky Mountain News:

The Denver Newspaper Agency has issued an ultimatum to its six unions: Agree to $20 million in wage and benefit concessions by Jan. 16 or face even worse consequences.

The unions have asked to see the company's books, but so far no details have been released.

It's finally come to this. Driven to satisfy their $130 million in debt, the Denver Newspaper Agency (a joint venture between MediaNews and E.W. Scripps) is demanding that their employees sacrifice another $20 million from their wages and benefits.

$20 million also happens to be the amount the DNA's debt has decreased in the last three years. By one interpretation, that means the company is essentially asking the employees to shoulder 100% of the company's debt payments from that period.

It's worth pointing out that DNA heavyweights like MediaNews CEO Dean Singleton get a minimum 5% salary increase a year.

"You know, I'm not really into squeezing a few more million out. I'm not a money guy."

- Dean Singleton, 2003. (Columbia Journalism Review)

Unsustainable?

So the Detroit Media Partnership has finally decided that constant incremental cuts is a losing proposition.

According to media blogger Ken Doctor's Content Bridges blog, Detroit Media CEO David Hunke reportedly called the current model "unsustainable."

"And [Detroit Media Partnership CEO David] Hunke said, if we don't do this, the current model is unsustainable. So he'd rather take the calculated risk of going to a new format -- rather than sit back and do incremental cutbacks."

To prevent those small cuts, the Detroit News and Free Press are making one big cut - namely, home delivery has been reduced by four days, and the print edition will be reduced to 32 pages most days.

Scaling back print operations has been particularly supported by the tech sector, but it's uncertain just how beneficial the cuts will be.

To be sure, a segment of the newspaper industry is in real trouble. But cutting coverage further fails to capitalize on newspapers' strengths.

Obviously a strong Web presence is important, as is keeping up with the changing demands of a society that relies more and more on technology. But if your product (the news coverage) is only offered in print, are readers just going to give up on local news? People will always care about what's happening in their communities. The problem is, many newspapers aren't offering much to satisfy that need. Local newspapers have an insurmountable advantage when it comes to providing local news coverage. Focus on strengthening your product, and the packaging will be a lot less important.

To illustrate the point, let's compare the top Web headlines as of 1 p.m. today, from four random small and mid-market dailies, along with the headlines from four of the large-market papers.

Abilene Reporter News:
TV stations conducting blackout test prior to digital conversion

Helena Independent Record:
Forecast: Brrrrr

Adirondack Daily Enterprise:
Governor’s budget would close Camp Gabriels (third update)

Boca Raton News:
Boca Raton student continues his annual toy collection drive for needy children

Those stories have only two things in common:

1) They're boring as hell to anyone that lives thousands of miles away

2) No one else has those stories

Sure, the content might not be sexy and only appeals to a select audience. But most newspapers operate in a regional market. The nice thing is, they're the same people!

Now let's compare those headlines with the big boys...

Washington Post:
Federal Reserve Slashes Interest Rate to Historic Low

New York Times:
Fed Cuts Benchmark Rate to Near Zero

USA Today:
Fed cuts interest rates to near zero to combat economic recession

LA Times:
Fed cuts rates to record low: 0% to 0.25%

Now let's just look at one more news provider, this time a Web site

CNN.com:
Fed slashes key rate to near zero

Anyone see a problem here?

* Alan Mutter isn't a big fan of cancelling home delivery.

In the reports of not-every-day delivery are true, the papers in Detroit may be about to kick off a self-fulfilling cycle of decline that eventually may consume them.

Mark Potts is.

And if it does drive readers from print to online, then that's a good thing, because online is where the future is. The sooner the newspaper industry truly understands that–and begins paying truly serious attention to promoting online and working hard to find innovative sources of revenue online–the sooner the transition to the inevitable future will take place.

The future can wait

Our newspapers are listening to what readers want and we would expect there to be a continued extension of content, particularly online, as well as continued expansion of video, rich databases of local information and other content that is first and foremost useful to our audiences.

- Dean Singleton, 61st World Newspaper Congress, 2008. (BusinessWeek.com)


What a difference a few short months can make.

As usual, MediaNews' rhetoric fails to coalesce into reality. Once the newspaper of record for the burgeoning tech sector (and home of the first journlist blog), the San Jose Mercury News hasn't done much to gain an online audience, and now they plan on doing even less.

According to paidcontent.org, the plans for a strong Web presence at the Merc have been scrapped.

In order to compete with online, George Riggs, the paper’s former publisher, told the NYT that, “The answer for newspapers has to lie in building their Web sites better and better, and promote, promote, promote. We haven’t seen that.” But with others at the paper saying that “grand plans” have given way to day-to-day survival, the San Jose paper’s editor David Butler, online enhancements will have to wait. Butler: “Until or unless we see that those things pay for themselves, we make a serious mistake in focusing too much on that.” But the catch is, how can the website start attracting ad dollars and readers if Merc News doesn’t offer a better online environment?

Of course, this is the same company that scrapped the profitable San Pedro Magazine, arguably in an effort to keep ahead of their titanic debt. That decision, like the Los Angeles Daily News layoffs (and others) came without warning or preamble, stunning both staffers and readers.

When a company fails to capitalize on an opportunity, or abandons a lucrative product, it's never reassuring. What's even more troubling is that sacrifices like these don't solve the company's financial problems - it merely delays them. And in this case, that delay is likely to prove short-lived. The only real hope for MediaNews is a dramatic change in circulation or advertising. Unfortunately the odds of a resurgence decrease with each loss in content and coverage. How can readers and advertisers come back, when each day has less and less for them to return to?

Fortunately for San Pedro residents, former San Pedro Magazine editor Josh Stecker is taking matters into his own hands, launching the independent San Pedro Today to fill the void left by MediaNews. Gary Scott has the details.

One of our members was at a meeting with Stecker before the announcement, here's what he sent us:

...In the newsroom last week, just one day after an Pedro Magazine editor Joshua Stecker was told his services were no longer needed, Josh spoke to members passionately about his frustration with the cancellation of the magazine and the fact that it was making money. He was holding back when discussions came up about starting a publication and looked like he wanted to tell us something but didn't, and most likely couldn't. Guild members talked with him about the fact that the paper virtually has no food/ arts and entertainment section, despite the fact that Long Beach and the surrounding cities are loaded with talent waiting to have their story told. The travel section of the LA Daily news is now gone, and I'm sure the food section is on the block soon.

Experts: MN at risk of default

Moody's Investors Service has down-graded MediaNews because it "faces a heightened risk of near-term default ...." under Moody's definitions. From E&P:

Moody's said it calculates Denver-based MediaNews Group's leverage ratio as more than 8 times debt to EBITDA (earnings before interest, taxes, depreciation and amortization). When Tribune sought bankruptcy refuge earlier this week, it was widely reported it feared violating its credit agreement covenants of 9 times EBITDA.

MediaNews insists its "in compliance with all debt covenants, as has always been the case, and expects to do whatever is needed to stay in compliance during these difficult times."

Whatever is needed?

Singleton says MN “probably” won’t offshore copy desks

Well, at least not any time soon. During a series of outtakes from interviews for a feature story on the up-for-sale Scripps-owned Rocky Mountain News for Westward, a Denver-based alternative owned by Village Voice Media, MN boss Singleton said:

"We are doing pre-press work in India and have been doing it for more than two years -- and it's worked very well. We've explored outsourcing copy editing and page makeup in India, too, but we probably won't do that. I think we're finding we can consolidate within our newspapers and get the same savings we can offshore. We probably won't put any news operations there -- and we weren't talking about reporting and editing. We were talking about copy editing and page design, and I think we've found we can do it just as well ourselves here.

That's welcome news indeed.

Singleton's October revelation that the company is exploring outsourcing – even offshoring – copy desk and page makeup functions prompted California Guild-covered employees to issue a joint statement in which it pointed out that a "proposal to wipe out copy desks at newspapers across the country threatens not only hundreds of jobs, but also quality and credibility – values the beleaguered newspaper industry needs now more than ever".

If continued consolidation of newsroom functions is necessary to keep our newspapers viable, so be it. We can help make that work. We want our papers — and our jobs — to stay local.

Rumor becomes reality

In a matter of days, disputed rumors over layoffs at the Los Angeles Daily News have suddenly become sickeningly real.

An anonymous DN staffer described the details in an email:

Longtime prep sportswriter Gerry Gittleson, 11-year film critic Glenn Whipp and reporter Justino Aguila, who was a fairly recent hire, all got the hatchet. And Antelope Valley reporter Karen Maeshiro recently stepped down after the decision to no longer cover the AV. She was offered a reporting position, but would've had to commute from there every day. Her hand was essentially forced, making her decision a no-brainer.

Other news from today: The Travel section is folding. Pared-down travel news will, however, appear in Sunday's LA.com. Travel writer Eric Noland and LANG Sports Editor Kevin Modesti, both longtime DN employees, are being reassigned to News as reporters.

The news is especially shocking, coming on the heels of what appeared to be a denial by MediaNews rep Jim Janiga, who said that although layoffs were likely to happen at some point, there were no immediate plans in place.

It's hard to comprehend why or how things could happen the way they are. Actions like this not only hurt the quality of the product, but hurt the morale of the employees who are already suffering through a cataclysmic industry shakeup. At a minimum, you deserve to be treated like more than an entry on a budget spreadsheet, that can be erased at will. You deserve respect, just like any other hardworking professional, and this is not how a credible employer does business.

What's uncertain now is how the layoffs will affect the employees and the newsroom at the DN. The contract is explicit: "... in the event of a subcontract which may reasonably result in the layoff of employees, the Employer shall notify the Guild within two weeks of anticipated action and bargain the effects on employees to be laid off."

So we need everyone to pay attention to the workload. If the layoffs result in a freelancer or other outside source picking up the slack, we'll need information and details in order to enforce the contract.

How it's done

One of our loyal readers passed along an interesting piece of news from the Palm Beach Post today. According to blogger Bob Norman, management at the paper is freezing all management salaries, and giving regular employees a 2% raise.

"It is important for you to know that executives at PBNI will not receive pay increases during 2009," Franklin wrote. "This decision is reflective of the need to reduce expenses and demonstrate leadership as we confront our economic challenges together."

The cynics might argue that this is mostly a symbolic gesture, and they're probably right. But at a time when industry execs repeat the same baleful cries of falling revenues while hosting million-dollar parties and enjoy a mandatory 5% pay increase on a six-figure salary, even the little gestures can mean a lot.

And speaking of the DNC soiree, turns out that was notable for more than just fiscal irresponsibility - it was the inaugural debut of a partnership deal between MediaNews and the Politico Network. That partnership model has taken root, and the content-sharing company has just announced that their client list now includes almost 70 newspapers.

The growth spurt comes hot on the heels of recent complaints from newspapers about the Associated Press, whose new rate structure places an additional burden on businesses facing plummeting revenues and circulation.

Some of our members have suggested that the honeymoon deal, launched by MediaNews properties like the Denver Post (owned by Associated Press chairman Dean Singleton) is another example of big business eating its young. We disagree. Relevant, quality content is always a good idea.

Of course, if MediaNews and other papers hadn't slashed staff, thus forcing editors to rely on AP content, and giving the AP incentive to raise rates in the first place...

No layoffs (for now)

Rumors have been circulating regarding impending layoffs at the Daily News. Guild Rep Vicki Di Paolo has spent the last week tracking down the facts, and here's what she sent out to the membership:

In response to several inquiries about rumors of more lay offs at the Daily News, after one week, two email communications and a phone call Jim Janiga (Sen. VP of Human Resources) responded via email that there are no lay offs planned, but as the economy worsens we can expect there will be more. Also, he has no idea of what department(s) would be affected.

Not exactly an ironclad declaration one way or another.

Also, the Daily News announced that it is closing the Antelope Valley bureau and reporter Karen Maeshiro will leave the company after 20-years of service.

Telecommuting would have seemingly been an easy solution, but wiser minds decided to ask Maeshiro to commute from Antelope Valley to the Woodland Hills office. Maeshiro is said to have responded that "the prospect of that commute proved too daunting."

As always, the Guild will continue to investigate these situations and seek more information as it becomes available.