Tag: media business

After the deluge

Now that the Boston Newspaper Guild has decisively approved a $10 million package of wage and benefit cuts, it seems like anyone who’s been following this closely should be able to offer some thoughts on what’s next for the Boston Globe.

For the time being, though, everything that can be said has already been said several times over. It’s a sign of how long this has dragged on that Romenesko offers just the bare bones, and that the trade magazine Editor & Publisher goes with an AP story. A huge story has gotten smaller with the passage of time.

The Guild cuts, along with another $10 million agreed to by the Globe’s other unions, are going to be a bitter pill to swallow. Management never fostered a sense of shared sacrifice, which is why a similar package was narrowly defeated last month. Still, simply as a reader, I hope yesterday’s vote allows the paper to move forward rather than obsess over the Globe’s uncertain present.

More than anything, we should all hope that the vote leads to a quick sale by the New York Times Co. to local owners who will do what they can to preserve the Globe as a leading regional institution. I would argue that the Times Co. was a reasonably good steward until the last year or so. But it all got very ugly very quickly.

This relationship can’t end soon enough, provided the right buyers can be found.

Baron, too

Boston Globe editor Marty Baron just sent this e-mail to his troops:

To the staff:

I know how stressful the past several months have been for all of you. Still, despite the pressures and the tension, you have never wavered in your commitment to deliver journalism of the highest caliber.

I want to say thank you.

Thank you for the depth of your dedication. Thank you for your consummate professionalism, even in times of discord and difficulty. And thank you for demonstrating every day that the work of this organization holds powerful and enduring value in our community.

Marty

Guild approves Globe concessions

The Boston Newspaper Guild has approved a $10 million package of concessions at the Boston Globe. A newsroom source just zapped me the following company-wide e-mail sent by publisher Steve Ainsley.

Dear Colleagues:

I am pleased the Guild membership voted to ratify their new contract. I appreciate the personal sacrifices all Guild members are making, and I thank each one for their commitment to this institution.

The ratification strengthens the stability of The Boston Globe and Boston.com.

Since we now have settled contracts with all our major unions, let me take this opportunity to thank every Globe employee, union and non-union, for the sacrifices you have made to meet the unprecedented challenges we faced at the beginning of the year.

Additionally, thank you for performing to such a high level of accomplishment under such pressure.

Your efforts and sacrifices are making a difference.

— Steve

According to Reuters, the vote was an overwhelming 366 to 179. The Boston Herald offers some additional background.

Could the Guild vote “no” again?

“Beat the Press” blogger Ralph Ranalli, a former Boston Globe staffer and a Guild official back when he was at the Boston Herald, does not rule out another “no” vote as members of the Boston Newspaper Guild decide today on $10 million in concessions negotiated with the New York Times Co. Ranalli writes:

The Times telegraphed its intentions by openly seeking buyers for the Globe before the hugely-important contract with its largest union was settled. The lame duck owner, deep in debt, couldn’t make it any plainer that it’s in asset-dump mode….

With their position potentially strengthening, the questions facing each Guild member going forward today are: “Is it worth hanging on?” and “How long can I?” The answers may well determine the outcome of today’s vote.

We’ll know tonight.

Globe publisher calls union analysis “flawed”

Boston Globe publisher Steve Ainsley is back with a lengthy e-mail to employees disputing yesterday’s e-mail by Boston Newspaper Guild insurance consultant Bonnie Hanisch. Media Nation obtained a copy earlier this morning.

I realize these internal communications are becoming increasingly arcane. I present them solely in the interest of placing them in the public domain.

On Monday, the Guild will vote on the latest $10 million package in concessions negotiated by union leadership with the New York Times Co. The text of Ainsley’s e-mail follows:

Dear Colleagues:

Yesterday an email was distributed by BNG leadership providing Guild members with an analysis of the health care costs under the current conditions vs. under the tentative agreement that you will be voting on this coming Monday, July 20.

We feel that this analysis is flawed, and very misleading. We hope all Guild members have a chance to read the following information before Monday. If there are further questions, please let us know. You deserve accurate information about such an important issue.

Q&A Health Care Costs

Q. The Guild’s health care consultant has sent some recent e-mails purporting to show what the new payroll deductions would be effective July 24th. Is this accurate?

A. In a word, no. Health insurance rates will not change effective 7/24/09 under any circumstance. Health insurance rates are set jointly by Union and Globe management Health Fund trustees. In order to change rates the trustees must meet and agree on a new rate structure. This has not happened and will not happen by July 24th. The rates listed by the Union consultant have not been agreed to by the trustees.

Q. Will there be higher health insurance rates if the contract is ratified?

A. The Globe recognizes that if the tentative agreement is ratified with the necessary reduction in quid pro quo payments, this may result in either some additional payroll contributions required by plan participants or a restructuring of the plan to reduce its cost or, more likely, some combination of the two. How much of either may be necessary is unclear at this point. The Globe has suggested to the Union that as part of the rate-setting process that the trustees work together with the plan provider, Harvard Pilgrim, on ways to mitigate the increase through plan design or other changes in cost we can negotiate with Harvard Pilgrim. That has not happened yet. There is a substantial reserve in the Fund which will allow the trustees some time to negotiate with Harvard Pilgrim. We have successfully done this with a number of our other unions and with the Guild, in the past, as well. Projecting rates now, prior to necessary trustee action, is pure speculation.

Q. Is it also correct as the Union states, that if the contract is not ratified that health insurance rates will be lower?

A. Just as trustees must approve an increase in rates, their approval is required to lower rates. The trustees have not agreed to lower rates. If the contract is not ratified, the current rates will stay in effect until such time as they are changed by the trustees. The trustees have a fiduciary duty to ensure that rates are set appropriately. There is currently no information to suggest that drastic reduction in rates, as is suggested by the Union’s consultant, is financially sound or justified. The reserve exists in order to assure bills to health providers are paid without interruption and employees’ health insurance premiums remain as consistent as possible. The right amount to keep in reserves is decided by the trustees.

Q. What is the role of the Union’s health care consultant?

A. The Union’s health care consultant is a paid advisor to the Union and to the Union trustees on health care issues. The Globe has its own health care consultant who performs a similar role for the Globe. The consultants are not members of the joint board of trustees. As a result, the Union’s health care consultant has no authority to set rates or to implement changes unless and until the trustees as a group approve of any such rates or changes.

Q. Has the Union endorsed the new contract?

A. The Union Executive Committee agreed in negotiations that with the changes the Globe made to its prior final offer, the Committee would “endorse and recommend ratification” to the membership. The Union President signed a side letter which said that expressly, and the individual members of the Committee all signed the tentative Supplemental Agreement….

A final note, we very much hope that the tentative agreement with the Guild is approved on Monday, so we can move past the current imposed wage reduction.

Absent a positive ratification vote, the current wage reduction will continue and the Globe will focus its attention entirely on negotiations in the fall to replace the existing Guild contract which expires fully on December 31, 2009. The Globe, of course, would seek all the changes it needs in all cost and flexibility areas in that new agreement.

Hopefully, after Monday, we all can move forward with the stability of a settled contract through the end of 2010.

We urge everyone to vote.

— Steve

Guild e-mail paints dark picture

The Boston Newspaper Guild’s insurance consultant, Bonnie Hanisch, has sent an e-mail to Guild members at the Boston Globe showing that they could bring home slightly more money if they approve a package of concessions totaling $10 million when they vote on July 20. (Media Nation obtained a copy earlier today.)

The cost, though, is high: a brutal reduction in health-insurance and retirement benefits. In fact, the consultant’s math is based on an assumption that the average Guild member would choose to reduce her or his 401(k) contribution from 10 percent of salary to 4 percent if the package is rejected, as a similar package was on June 8. Hold the 401(k) contributions steady, and employees would actually make less money with a “yes” vote than with a “no” vote.

So why would anyone vote yes? If the concessions are approved, salaries will be cut by 9 percent (including eight unpaid days off). If they are rejected, the 23 percent pay cut implemented after the “no” vote remains in place.

The e-mail has led to some speculation that the Guild is quietly pushing for another “no” vote, the Phoenix’s Adam Reilly reports. Poynter Institute business analyst Rick Edmonds describes the situation facing Guild members as “a choice between a punch in the gut now or being slapped upside the head later,” with a “yes” vote merely deferring some of the pain.

Yesterday I had a chance to talk with a few Globe staff members about the vote and whether they think the concessions will be approved this time around. The rough consensus: yes, but there is deep anger at the New York Times Co. over its highhandedness and lack of straightforwardness in communicating with Globe employees.

Look for the vote to be close once again.

The full text of Hanisch’s e-mail follows:

The Executive Committee, along with the Governing Board, has asked that I reiterate some of the questions that came up this weekend, along with an example of how you could mitigate the 23% if the contract is not ratified.

First, our medical plan renews on May 1st of each year. Our premiums increased from Harvard Pilgrim by approximately $500,000. At that time, there was an estimated $300,000 in the Taft Hartley Health Fund, and we were expecting an additional $200,000 of new health fund quids that had been negotiated in the last bargaining negotiations. Hence, there was no rate change/contribution changes to the employees.

On April 7th, we began the $10 million concession meetings with the company. Ultimately, part of the concessions was approximately $1.3 million in health care quids that had been negotiated over the past 20 years.

What this means to you — whether the contract is ratified or not, your health insurance contribution rates will increase next May 1, 2010. Based on our estimates, if the contract is ratified, we need $2.5 million of employee contributions. If the contract is not ratified, we need $1 million of employee contributions. (Health care increases are based on the medical claims of this group and those that are participating. These estimates are based on the same health care costs, and an estimated 5% increase.)

If the contract is not ratified, here is an example of how to reduce your costs:

If Ratified
Average Salary: $58,000
Family Health Insurance: -$ 5,492
401K Deductions (Average person in BNG is 10%): -$5,800
Taxes (FICA, FUTA, SUTA, Fed; est. 30%): -$14,012
8 Furlough/Unpaid Days: -$2,231
TOTAL: $30,463*

If Not Ratified
Average Salary: $44,660 (23% reduction)
Family Health Insurance: -$1,170
401K Deductions (change to 4%): -$1,786
Taxes: -$12,511
Zero Furlough/Unpaid Days: $0
TOTAL: $29,193

Difference of $1,270 or $24.42 per week.

If the contract is not ratified, you keep the $1.3 million of quids; you keep the pension plan; you keep the retiree health insurance; you keep the 401(k) match, etc.

If anyone has any questions, please feel free to contact me at xxx.

Thank you.

Bonnie M. Hanisch, CEBS
President
Boston Insurance Group

*As alert Media Nation commenter Tony points out, Hanisch’s math is a bit off — the number should be $30,465.

Globe publisher distributes Q&A

Boston Globe publisher Steve Ainsley has distributed a Q&A inside the Globe in advance of the Boston Newspaper Guild’s upcoming July 20 vote on the latest concessions negotiated between the Guild and the New York Times Co. Media Nation obtained a copy earlier today.

Dear Colleagues:

We thought it might be helpful to provide information about the components of the tentative agreement with the Guild, which is scheduled for a ratification vote on July 20th.

We have prepared a short list of Q&A’s for those elements that are different from the contract proposal of June 8th.

We also provide a link to the Q&A’s (previously distributed) for those components that have not changed from the June 8th contract proposal.

You’ll also find a link to the information about the wage mitigation, which is posted on Compass.

[Compass is an internal system for Globe employees. I do not have the links. — DK]

If you have any additional questions, please let us know.

Thank you.

— Steve

—

Guild Employees Q&A

New Elements of the Contract under Tentative Agreement

Q. What are the new elements of this proposal?

A. The major elements that have changed are outlined below:

  • A lower wage reduction: 5.94% vs. 8.388%
  • The elimination of retiree health insurance, going forward (post
  • 65 supplemental plan only)
  • 2 Vacation days and the Birthday holiday will be taken without pay
  • A further reduction of ‘quid pro quo’ for health insurance fund

Note: The last three items above, along with the partial wage mitigation, amount to exactly the savings needed to lower the wage reduction and maintain the $10 million in total savings necessary.

Q. What elements in this proposed agreement have remained the same?

A. Major elements that have remained the same include:

  • 2% wage reduction for Tier 2 positions
  • Five furlough days per year
  • Elimination of overtime unless employee works 40 hours in a week
  • Elimination of banked vacation accrual
  • Freeze pensions at current levels, and eliminate company’s
  • contributions
  • Elimination of company’s contributions to 401(k) accounts
  • Reduction of ‘quid pro quo’ payments for health insurance fund as
  • provided in the June 8 proposal
  • Elimination of tuition reimbursement, eye care, life insurance,
  • retiree death benefit
  • Modification of the lifetime job guarantee
  • 1% profit share program
  • Matching wage increase, up to 5%, if management’s 2009 wage cut is restored.

Q. What is the length of this contract?

A. Through the end of 2010.

Q. Date of ratification vote?

A. Monday, July 20, from 8am to 8pm at the Globe.

Q. Why not vote earlier?

A. The Guild’s bylaws require 30 days notice.

Q. What happens to post-65 retirement health benefits?

A. Going forward, all Guild members will not be eligible for retiree heath benefits through the company after age 65. What this means is that at age 65 you become eligible for Medicare and you would need to purchase a Medicare Supplement Plan on your own rather than it being provided by the company. There are many choices available on the market including plans from Blue Cross, Harvard Pilgrim and Tufts. (This is consistent with the change in benefits for managers and exempts instituted in March, 2009.)

Q. How will the unpaid vacation days and birthday holiday be administered?

A. Two vacation days per year will be unpaid. Employees may choose which of their vacation days will be unpaid, but need to schedule them at the beginning of the year. For 2010 they need to be scheduled with your manager by January 30.

For 2009, only 1 vacation day will be unpaid. It would need to be scheduled with your manager by August 15.

Employees are required to take their birthday holiday within the period that’s 2 weeks before or 2 weeks after their birthday. For 2009, only employees with birthdays after the ratification date will not be paid for their birthday holiday. They should schedule the day within the period outlined above.

Scheduling for all vacation and birthday holidays needs to be approved by your manager. In 2010 all unpaid days including furlough days will need to be scheduled by January 30.

Q. When would the pension freeze take effect? I’m close to earning another year of service.

A. The pension freeze will be effective on August 8, if the contract is ratified on July 20th. So, every full-time employee will have earned 1,000 hours this year and therefore another full year of accrual service.

You should have received a notice informing you that the pension plan would be frozen as of August 8th. This is contingent on ratification. There is a requirement under federal law to give employees 45 days advance notice that benefit accruals will stop (a 204(h) notice), which is why the notice was sent out early with knowledge and prior agreement with the Guild.