Tag: Boston Globe

Depending on how things go, this could be a very big day for the future of the Boston Globe and its employees. The Newspaper Guild is sending in its national president, Bernie Lunzer, to try to work out an alternative deal with New York Times Co. management. (Boston Herald coverage here; Globe coverage here.)

It’s easy to say the Times Co. is going to stick with the 23 percent pay cut it imposed last week, but there are reasons to think that management would be amenable to negotiations. Management’s chief aim is to extract $10 million in concessions from the Guild, and to do it in a manner that paves the way for selling the paper.

The 23 percent pay cut accomplishes the first goal but not the second, since the Times Co. is now dealing with building full of seething employees. And about 190 Guild members still have lifetime employment guarantees, which will make it more difficult for a new owner to do the sort of drastic restructuring that’s needed.

It wouldn’t surprise me if the two sides reach an agreement that looks quite a bit like the one that was narrowly rejected last week: a pay cut of around 10 percent; cuts to retirement and other benefits; and an end to the lifetime job guarantees. If Times Co. executives have any sense at all — a debatable proposition at this point — then they will sweeten the pot a little bit so that Guild members can feel that they actually got something out of last week’s “no” vote. As long as it adds up to $10 million, then it really doesn’t matter.

New York Times columnist David Carr today, meanwhile, checks in with a group of outside analysts to try to put a price tag on the Globe. It proves to be a futile exercise, as the prices range anywhere from $250 million to the Times Co.’s actually having to pay a new owner as much as $25 million to make the Globe go away. Nor does the longer online version add much.

The takeaway quote comes from the venerable analyst John Morton, who writes to Carr:

Should a private buyer be found I suspect that any Globe employees still employed after the deal goes through will recall the contract they have just rejected as paradise compared with what a new owner will impose in cost-cutting.

Times Co. executives have behaved badly enough through this crisis that it’s easy to forget the larger truth: the newspaper business is coming apart at the seams, and what’s happening at the Globe is no different from what’s happening to major metropolitan dailies across the country. Morton’s assessment is a reminder of that reality.

There’s an ugly symmetry to the news that the New York Times Co. is soliciting bids for the Boston Globe.

Having paid $1.1 billion for the Globe in 1993, half the market capitalization of the entire Times Co., the Sulzberger family may now find there is virtually no interest in what once once its second-most-prized asset after the Times itself.

After the Boston Newspaper Guild narrowly rejected a proposal to cut salaries by about 10 percent and eliminate about 190 lifetime job guarantees, the Times Co., as expected, imposed a 23 percent pay cut. And the Guild, as expected, has appealed to the National Labor Relations Board.

What’s unclear today is the status of the lifetime job guarantees, widely thought to be a major stumbling block to any effort to sell the paper. Today’s Globe story, by Keith O’Brien, isn’t quite as explicit as I’d like it to be, but the gist seems to be that the guarantees remain in effect at the Guild — at least for the time being — and the paper’s other unions have given them up.

In the Boston Herald, Jay Fitzgerald and O’Ryan Johnson interview Poynter Institute business analyst Rick Edmonds, who wrote an excellent post the other day suggesting that the Globe was closer to break-even than is generally assumed.

Edmonds tells the Herald that the lifetime guarantees and the ongoing labor crisis remain major stumbling blocks to a sale: “Having these different things going on makes it considerably harder, if not impossible, to sell this newspaper.”

So says Poynter Institute business analyst Rick Edmonds.

In a revealing post — made all the more interesting following the Boston Newspaper Guild’s narrow defeat of a package designed to save the New York Times Co. about $10 million — Edmonds reports that Times Co. spokeswoman Catherine Mathis has clarified some of the murk. (Via David Folkenflik.)

Edmonds writes that the $85 million operating loss the Globe is said to be ringing up in 2009 actually “includes depreciation, amortization and special charges.” His best guess: the Globe is on track to lose about $20 million this year, and the concessions demanded by the Times Co. would roughly cover that.

Of course, following today’s Guild vote (the deal lost by a heart-stopping margin of 277-265) management only has $10 million in hand, in the form of concessions agreed to by unions other than the Guild. Management has threatened to impose a 23 percent pay cut, which the Guild, in turn, says it will appeal to the National Labor Relations Board.

It’s impossible to know what’s going to happen next, at least not tonight. But one thing that ought to be acknowledged is that the folks at 135 Morrissey Blvd. have continued to put out a very good newspaper despite months of uncertainty, even chaos, with respect to the Globe’s future. I’m sure that will continue.

Update: The Globe itself made some of the same points on April 24, though Edmonds’ main argument — that the paper’s true operating loss this year is likely to be $20 million — doesn’t quite emerge.