Lastly, on this Saturday, April 4, after using the Boston Globe, as so often in the past, to post to this blog, I am still in shock to tell OOTJ readers that the big headlines today are that the New York Times Company, which has ownership of the Globe, threatens to shut the Globe unless its many unions agree to $20 million in concessions. The Times is hurting, and sees the Globe bleeding red ink, hemorrhaging money.
Executives from the Times Co. and Globe made the demands Thursday morning in an approximately 90-minute meeting with leaders of the newspaper's 13 unions, union officials said. The possible concessions include pay cuts, the end of pension contributions by the company, and the elimination of lifetime job guarantees now enjoyed by some veteran employees, said Daniel Totten, president of the Boston Newspaper Guild, the Globe's biggest union, which represents more than 700 editorial, advertising, and business office employees.The article includes a grim roll call of the papers and companies that have recently shuttered or filed for bankruptcy. The article also includes quotes from journalism professors who talk about newspapers moving from cost-cutting such as wage freezes, buy-outs and into more severe areas like lay-offs, pay cuts, and cessation of pension contributions. The example of lifetime employment guarantees, which still exist at the Globe, are very unusual nowadays.
The concessions will be negotiated individually with each of the unions, said Totten and Ralph Giallanella, secretary-treasurer of Teamsters Local 259, which represents about 200 drivers who deliver the newspaper.
"We all know the newspaper industry is going through great transition and loss,"' said Giallanella. "The ad revenues have fallen off the cliff. Just based on everything that's going on around the country, they're serious."
Totten said the Times Co. officials wanted the concessions within 30 days or else the paper would be shuttered, but Giallanella said officials did not mention a specific timetable. (snip)
This week, the Globe newsroom completed cutting the equivalent of 50 full-time jobs. But the deteriorating economy has made the Globe's financial outlook much worse. Management told union leaders Thursday that the Globe will lose $85 million in 2009 unless serious cutbacks are made, according to a Globe employee briefed on the discussions. Last year the paper lost an estimated $50 million, the employee said.
The Times Co. is seeking concessions from the unions because the New York company, which is also suffering from the recession, can no longer subsidize the Globe's losses, said the Globe employee who is not authorized to speak publicly and requested anonymity. The Times Co. posted a net loss of $57.8 million in 2008.
In recent months, the Times Co. has taken steps to raise cash. It has been shopping its stake in the Red Sox, and recently sold most of its headquarters in New York, while leasing back the office space. It received $250 million from Mexican billionaire Carlos Slim, agreeing to pay 14 percent interest. It also suspended shareholder dividends to save about $130 million. New York Times shares closed at $5.05 yesterday, up 1.8 percent, but have fallen 74 percent in 12 months. (snip)
Lou Ureneck, chairman of the journalism department at Boston University's College of Communications, said he believed the Times Co. is hoping to get the concessions and keep publishing the Globe. But he said the Times Co. management seems to have decided that the flagship New York Times newspaper is its top priority and it will no longer subsidize its New England newspaper group, which has underperformed the company as a whole.
"The New York Times Co. has its back up against the wall, and it's looking at ways to survive," Ureneck said. "The Globe has become a drag on earnings at The New York Times Co. at a time when it can't afford it."
Ureneck said a shutdown of the Globe would be a catastrophe for the community. "It's a crucial part of life in Boston," he said. "This city would be diminished by the loss of The Boston Globe. I can't even imagine it."
The Globe is the 14th-largest paper in the country and by far the region's circulation leader.
Local leaders yesterday expressed shock at the possibility of the Globe's closure and trepidation over a future without it.
"I believe in good government, and I believe good government depends on a strong paper, and the Globe has served that role in Massachusetts for a long time," said Governor Deval Patrick, who had a Globe paper route while a student at Milton Academy. "It's hard to imagine starting the day or doing this current job without the Globe."
Mayor Thomas M. Menino of Boston said the city would lose a vital institution.
"The Globe helped build Boston," Menino said last night. "The Globe holds people accountable on the issues, and that's important. We might not like it sometimes. Sometimes we don't agree. But they ask the tough questions - backed up with real data."
The Boston Globe began publishing in 1872 when a half-dozen local businessmen, led by Jordan Marsh department store founder Eben Jordan, pooled $150,000 to launch the newspaper, according to a company history. The first issue, appearing March 4, 1872, cost four cents.
In August 1873, Jordan hired General Charles H. Taylor, a 27-year-old newspaperman and Civil War veteran, as a temporary business manager. Taylor helped pull the paper out of financial trouble and became a partner with Jordan, the only remaining investor. Taylor was later named publisher, and members of the Taylor family continued publishing the paper for over a century - during which it became the dominant newspaper in New England - until 1999. It was sold to The New York Times Co. on Oct. 1, 1993, for $1.1 billion.
The Globe has won 20 Pulitzer Prizes, including eight under the Times Co. ownership.
In recent years, the Globe, like papers throughout the country, has cut jobs in both newsroom and business operations as print circulation and advertising have declined. Even though many papers, including the Globe, reach more readers than ever through the Internet, newspaper websites are not generating enough advertising revenues to make up for the decline in print advertising.
While the unions are taking the demands very seriously, they are also calling for equal sacrifices from management level personnel. If they accept pay cuts, and cuts in benefits such as contributions to pensions and healthcare, the unions want to see management also take pay cuts. As long as the unions are convinced that this discussion is in earnest about the future viability of the Globe, and not a mere negotiating tactic, it seems that they will be willing to to consider working with the owners to keep the newspaper afloat. It would be a terrible loss for all of us if the Globe were to fold! If even the Mayor and Governor are willing to root for the paper, you know it's important in the life of the region.
The image is Jack Dempsey pounding Gene Tunney who's on the ropes in 1927, courtesy of http://www.sportplanet.com/sbb/apfas/20R.HTM replaying the 1920's in sport.