By Dan Kennedy • The press, politics, technology, culture and other passions

GateHouse reverses pay cuts

Despite having plenty of financial problems of its own, GateHouse Media New England will reverse pay cuts that had been implemented earlier this year. A little while ago Media Nation obtained a copy of an e-mail that president and CEO Rick Daniels sent to all staff members announcing the news. The full text follows.


Based on the strengthened cash flows over the last several months, I am pleased to announce that the temporary pay cuts that were implemented in June and July are coming to an end, and our pay rates will be restored to full, pre-cut levels. For those whose pay was reduced as of June 1, the first workday that will be paid using the original, “pre-cut” rates will be Oct. 5th. The first paycheck that will reflect your original rates will be Oct 23rd. For those employees who received paychecks on Oct. 14th, your “retroactive pay” (from Oct. 5th onwards) will be reflected in your first post-announcement paycheck. For those colleagues who are represented by unions, the restorations will be done in accordance with the terms of the relevant agreements. These dates have been communicated to union leadership and your respective managers will communicate these dates to you under separate heading.

First and foremost: Thank you all — for your work, your dedication and your toughness. NONE of us were pleased about the need to take this step, yet the vast majority of employees did not choose to do anything BUT to put in their very best efforts to do their jobs so that we could reverse these cuts as soon as possible. We believed then, and still believe that this step allowed us to preserve the core assets and capabilities our customers value most. While the members of the senior management team had hoped we could restore these cuts prior to year’s end, at least partially, we are heartened that the time spent under the pay cuts will prove to be shorter than expected; that said, even had it been a week or a month, it would have still been an onerous sacrifice. Ending these cuts is not only a major relief for all of us, but it’s also an important affirmation of our business model, and an affirmation of the quality and effectiveness of our collective efforts, and the results we have been able to generate. We are in a position to restore the cuts because GHMNE is again generating sufficient cash flows to be clearly and safely in the black. If you remember, when we announced these cuts, I said there were two kinds of companies: Those that produced positive cash flow, and those that didn’t, and we could not allow ourselves to be among those that didn’t.

I don’t want to create any misimpressions that the economy, and its powerful effects on our advertising revenues, is improving all that much. Ask any of our sales personnel. Most of our advertisers are struggling. For the most part, most of our cash-flow improvements are being generated by very stringent spending reductions, NOT a rapid return to great revenue performance — (although there has fortunately been some strengthening in revenue comparisons vs. the year over year declines we experienced earlier in the year). NONE of these cost reductions has been “easy”, and while we’ve turned over many stones to reduce the structural costs of GHMNE by several millions of dollars, we need to continue to take all possible steps to increase our efficiencies — and we will. Going forward, we need to continue to evaluate all aspects of our operations to help ensure that we are operating in a smart and efficient manner. ALL of us hope that we will never have to cope with pay reductions again (and I’m sure we all hope we never see another “Great Recession” in our lifetimes). We have, once again, proven that highly focused and very efficient local publications (both print and digital), that are produced by a very focused, talented and dedicated group of team members are extraordinarily durable, because they provide exceptional and truly unique value to readers and advertisers. We have a GREAT, and now very much battle-tested, group of employees and publications that will allow us to get back to the business of growth, and probably in the not-too-distant future. There are a host of new business initiatives, both at local and at GateHouse-wide levels that are being put into effect, and both I and the members of the senior team will be scheduling site visits and employee meetings in just over a month to share details on some of these, as well as answer your questions and hear your thoughts and suggestions. Again, thanks very much — you’re talented, dedicated and durable and a group that’s a true privilege to work with and lead.

Richard Daniels,
President and Chief Executive Officer

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  1. Newshound

    If this company survives employees deserve to be rewarded before stockholders.

  2. InsiderNegot

    Rick Daniels, former Globe President. Timing is everything!

  3. Newshound

    InsiderNegot – You’re can’t possibly be implying this is an emotionally driven reaction and response instead of purely financial?

    My goodness, how could anyone ever be so cynical!

    Anyway, whatever the motivation, this is good for GateHouse employees, spirit and morale, along with their personal finances – and of course why shouldn’t they be paid a decent wage for a decent, dedicated day’s work.

    GateHouse can’t possibly lose worse by not cheating employees, even if we can be suspicious of the timing of this event.

  4. recon

    how about the huge GHM debt load?

  5. InsiderNegot

    Hound and Recon:

    The GatehHouse debt load is huge, but GateHouse New England has relatively few employees. They outsource their printing, to the Globe BTW, and the raise was probably something that was either under consideration and was just moved up or was something that at little cost they could get some extra publicity on.

  6. Local Editor

    Raise? Our pay is just going back to where it’s supposed to be.

  7. newshound

    Local editor – noticed the same but didn’t want to be technically picky – however, would it be that you are now receiving last year’s pay scale as the revived pay?

    This week’s headline in BusinessWeek magazine: “What happens if the dollar crashes.” Oh my God, what a thought! It is frightening, and worse, likely.

    Just think of the taxes you’ll save this year with a smaller W-2 due to the summer cut in pay to help keep the GHS lenders from pushing your newspaper into more stable-financial ownership. Yes, the employees did pay for this to their own detriment and without choice. At least you’re in the 85% with a job and in the 40% that really has to work at it to earn every last dime, and then some, that you’re paid.

  8. to insidernegot, the weeklies are printed in house, not by the globe.
    to newshound, we’ll be back at the pay scale we were at before the cut and many of us are very happy about it.

  9. Newshound

    I.M Happy – nice to hear – count your well deserved blessings.

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