So Much For This New Year’s Resolution For Trying To Write Only Positive News About Newspapers – The Year Is But Two Weeks Old And Its Mayhem Out There

Philip M. Stone January 13, 2009

Hearst says it is going to close its Seattle Post-Intelligencer if it doesn’t find a buyer real soon (it won’t find one), E.W Scripps says the same about the Rocky Mountain News (it won’t, either), union give-back discussions are off in Minneapolis with Chapter 11 bankruptcy expected any day (it will), there’s more news sharing in Dallas and Ft. Worth (when, not if they consolidate) and newsstand prices rise everywhere. And it’s only mid-January.

Hearst’s news about its Seattle newspaper might have a silver lining, it could just save the competing larger circulation Seattle Times.  If the Rocky Mountain News was to close that sure would also help Dean Singleton’s flagship Denver Post.

The newspapers in Seattle and Denver function under joint operating agreements approved by the Department of Justice (DOJ) which bypasses anti-trust laws. The JOA allows most functions, except for editorial, of two competing newspapers in a city to be combined to save costs, and therefore ensure survivability of competing editorial products. The DOJ does not take kindly usually to newspapers benefitting under a JOA for years and then declaring they are sold or will be closed, so nothing is certain in either of these cases until the DOJ says it is certain.

While JOAs are credited for saving many newspapers, Frank Blethens, publisher of the Seattle Times doesn’t see it that way. “The JOA structure is inefficient and has been a significant part of the deep losses experienced at both newspapers,” he said.

And he then goes on to say what many analysts have been saying for some time now – that the days of American cities supporting more than one newspaper may be short lived. ”Long term, post-recession, we believe single metro newspapers/Web sites will be a stable business, and more importantly, significant community assets providing a sense of place, news, community connection and watchdog journalism.  While we have always believed that a locally owned newspaper is a special asset to a community, The Seattle Times has limited resources to ride out the recession. We have committed to do everything we can to preserve the Seattle Times as a local independent newspaper.”

With these two announcements it makes one wonder what future might be in store for such metros as the San Diego Union-Tribune that Copley has put up for sale and The Miami Herald which McClatchy is reported to have been shopping around although it has made no announcement to that effect. If they can’t get sold do they survive?

In Minneapolis negotiations have broken down in management-initiated talks asking the union for $20 million more in cuts on top of the $50 million the newspaper has taken since being bought from McClatchy in December, 2006. Next step most likely is a Chapter 11 bankruptcy as per Tribune before the New Year.

And according to the Teamsters Web site, Minneapolis management was looking for some pretty hefty pay and benefit reductions.  “In the case of the Teamster pressmen, Avista proposed 13% wage cuts that included slashing wages, rescinding a $1 an hour wage increase that took effect in December, and eliminating another $1 an hour increase, set to go into effect in a year. The pressmen’s health benefits, 80% company-paid, 20% member-paid, would have dropped to nearly a 50/50 split. “Also, Avista sought to cut the pressmen’s work force by 16 members to 76, making them so weak, it would be increasingly difficult to win decent contracts in the future. Teamster mailers’ pay would have been cut to non-union levels, from $25 to $15 an hour…

“Avista wanted to eliminate overtime pay to assistant city editors in the Newspaper Guild of which there are many. By eliminating overtime pay, it would make it easier for Avista or another owner to get the National Labor Relations Board to declare them supervisors who don’t belong in the union.

“Teamsters drivers’ pay would be reduced from $27.10 to $18.50 an hour. ‘It would cut my pay 32%, from $53,700 to $36,500,’ said 30-year driver Rick Sather. ‘It breaks the union when those jobs are replaced by $13-an-hour, part-time workers who get no benefits.’”

It may, however,  just be a matter of time before the union has to agree to such reductions because if the newspaper does go into Chapter 11 then all outstanding contracts are tossed aside and renegotiated at far lower levels for approval by the bankruptcy court.

The kind of  reductions the Minneapolis Star Tribune was looking for brings to mind a recent quote by the CEO of one of the larger US newspaper groups (said in an off-the-record appearance so he can’t be named) that newspapers today are drowning in legacy costs and if newspapers were to fold they could easily be replaced within two weeks by new newspapers with wages and benefits far lower than those being paid by the legacy papers and they would be profitable.

Barring that, newspapers are busy raising their newsstand prices, in some cases having doubled them within a year or less. The Washington Post went from 35 cents a copy to 75 cents a copy within 12 months, The Dallas Morning News that last May raised its newsstand price from  50 cents to 75 cents says it is raising it to $1 come February 9. 

In Miami The Herald doubled  its price in neighboring Broward County from 25 cents to 50 cents and from 35 cents a copy in its own Miami-Dade County to 50 cents. It was the first price increase in Miami-Dade County in 18 years and the obvious question is what took them so long? Even at 50 cents a copy that paper is still less expensive than most large metropolitan newspapers.

And the editorial sharing continues. In Dallas  and neighboring Ft. Worth, The Morning News and the Star-Telegram have now increased their editorial co-operation to sports with the Morning News using Ft. Worth’s coverage of the Texas Rangers baseball team, while the Star-Telegram will use Dallas’ coverage of the Dallas Mavericks basketball team and the Dallas Stars ice hockey squad.  They’ll also share coverage of some college teams but columnists remain separate.

Not included is coverage of the Dallas Cowboys – proclaimed in the Dallas-Ft. Worth Metroplex as God’s team. One would not want to offend God, would one!