By Dan Kennedy • The press, politics, technology, culture and other passions
Remember Vinay Mehra, the former Boston Globe Media president who sued the company for compensation he claims he was owed after he was fired in 2020? Well, his suit continues to wend its way through the legal system, but Suffolk Superior Court Judge Peter Krupp trimmed back Mehra’s demands recently, ruling that Mehra is not entitled to triple damages should he prevail. Adam Gaffin of Universal Hub, channeling Massachusetts Lawyers Weekly, has more.
Earlier:
Boston Globe Media Partners has fired back against its former president Vinay Mehra, who sued the company in June over what he claimed was $12 million in compensation that he is owed in lost commissions, wages and other compensation. The Globe’s answer, filed Wednesday in Suffolk Superior Court, goes beyond the usual dry denial of Mehra’s charges to offer a rather vivid account of its own allegations against Mehra. It begins by claiming that the Globe …
… terminated Vinay Mehra’s employment [in June 2020] for cause for repeated instances of poor judgment (or worse) with excessive, unauthorized, and inappropriate spending of the Globe’s money. Unable to resist the temptation to spend corporate money for his own benefit, Mehra repeatedly used his corporate credit card or else spent company money to run up extraordinary expenses that offered no benefit to the Globe. At first, Mehra acknowleged the Globe’s objections to these abuses, and promised they would not recur. But they did recur, and Mehra eventually simply stopped even attempting to justify them.
According to the answer, filed by the Globe’s lawyer, Mark W. Batten of Proskauer Rose, Mehra:
The narrative section of the Globe’s answer concludes by alleging that, after repeated offenses, “it became clear that his behavior could not, and would not, stop” and that “the breach had at last become irreparable.”
On Thursday, the Globe’s Larry Edelman reported on the Globe’s answer and quoted Mehra’s lawyer, David W. Sanford, as saying: “The Boston Globe’s accusations are false and a jury that will hear this case eventually will understand them to be false…. The hard work of the litigation begins now with discovery, and discovery will show Vinay is right.”
Before coming to the Globe, Mehra held high-level corporate positions at Politico and, before that, GBH in Boston.
Former Boston Globe Media Partners (BGMP) president Vinay Mehra has filed an explosive lawsuit against the company, charging that he was fired in 2020 because Globe owners John and Linda Henry didn’t want to pay him the commissions and other compensation he’d earned for transforming the newspaper into a profitable operation. Adam Gaffin of Universal Hub has all the details as well as a copy of the suit.
Mehra was hired in 2017 from Politico, where he was executive vice president and chief financial officer. Before that, he worked as chief financial officer at GBH in Boston from 2008 to 2015.
According to the lawsuit, BGMP owes Mehra more than $12 million in lost commissions, wages and other compensation. Gaffin writes:
In his suit, filed in Suffolk Superior Court, Mehra charges that despite returning the Globe to profitability, John Henry and his corporate minions decided to cheap out — and then ousted him after threatening and lying about him with an unquenchable “thirst for vengeance” sending him a termination letter alleging “fraud, misappropriation, embezzlement or acts of similar dishonesty.”…
At this point we’re only getting one side of the story, as BGMP has not yet filed a response. But if Mehra’s numbers are accurate, then the lawsuit provides some insight into how the Globe transformed itself into one of the country’s most financially successful large regional newspapers. In 2019, for instance, Mehra claims that the Globe implemented $10 million in cuts “through a combination of targeted layoffs, reduction in vendor costs, reduction in distribution costs, and other measures.”
The result, Mehra claims, was a turnaround from a money-losing operation to one that was enjoying a positive cash flow of “tens of millions of dollars” by the time he left. Indeed, it was at the end of 2018 that John Henry told me, unexpectedly, that the Globe had achieved profitability. “As our digital growth continues the sustainability of a vibrant Boston Globe is coming into view,” he said at that time. “It’s been a long time coming.”
Mehra apparently expects BGMP to flesh out its accusations of fraud and embezzlement as the case moves forward, as he offers some details in what might be regarded as a pre-emptive strike. The lawsuit also includes a statement that I suspect former Globe editor Brian McGrory might disagree with: “He [Mehra] also shifted the focus of the Globe’s reporting to be more strategic, to prioritize the Globe’s strengths, and to drive viewership.”
That sounds a lot like McGrory’s January 2017 memo to the staff in which he talked about repositioning the Globe’s coverage, which I wrote about in “The Return of the Moguls”:
The most important takeaway was that the Globe would no longer attempt to be a “paper of record,” publishing obligatory stories about the minutiae of city and state government, the courts, and the like. Rather, it would seek to become an “organization of interest,” developing enterprise stories out of those traditional areas of coverage that made more of a difference to readers’ lives.
But Mehra didn’t join BGMP until six months after McGrory wrote that memo. No doubt he and McGrory had conversations about how to make the Globe more compelling to its audience. The shift in focus that the lawsuit talks about, though, had already taken place, and in any case fell under the purview of the editor, not the president.
It will be interesting to see how the Globe responds — and, of course, whether this goes to trial or is instead settled out of court.
Previously published at GBH News.
Surprising though the news may have been, there was a certain inevitability to Linda Pizzuti Henry’s being named chief executive officer of The Boston Globe’s parent company.
She had long held the title of managing director, and it has become increasingly clear over the past few years that she and her husband, publisher John Henry, were determined to impose their will on the media properties they own. Indeed, the Henrys have been calling pretty much all the shots on the business side since the summer, when Vinay Mehra exited as president and was not replaced.
These are the best and worst of times for media organizations. The COVID-19 epidemic and the presidential campaign have resulted in renewed interest in the news as well as growing audiences. But advertising, already in long-term decline, has fallen off a cliff.
The Globe is no exception to those trends. Earlier this year, the Globe passed the 200,000 mark for digital-only subscriptions, a long-sought-after goal. Another Globe Media property, Stat News, has established itself as one of a handful of go-to sites for news about COVID.
Yet the paper, reportedly profitable before the pandemic, has been forced to trim its budget to adjust to the pandemic economy, cutting back on its use of freelancers and paid interns, for example, as well as implementing some business-side reductions.
Time will tell what the Linda Henry era will bring. But here are three thoughts that I think are worth keeping in mind:
• There is no longer any middleman. With co-owners John and Linda Henry holding the top two positions, all the heat will now be directed their way, for better or worse. When Mehra was in charge — and, before him, Doug Franklin and Mike Sheehan — both credit and blame could be deflected.
Now the Globe is the Henrys’ paper in every respect. That extends into the editorial operations as well given that editor Brian McGrory was actually involved in recruiting John Henry to buy the paper and that editorial-page editor Bina Venkataraman was hired by the Henrys.
For a useful contrast, consider The Washington Post. Although owner Jeff Bezos does involve himself in business strategy to a degree, he hired a publisher, Fred Ryan, to run the paper on a day-to-day basis, and left the executive editor (Marty Baron), the editorial-page editor (Fred Hiatt) and the top technology executive (Shailesh Prakash) in place after he acquired the paper.
• The Henrys must now settle an ugly labor dispute on their own. Earlier today the Boston Newspaper Guild, involved for quite some time in acrimonious contract talks with management, issued a statement ripping the Henrys for using the law firm of Jones Day, which critics say has a reputation for union-busting.
That’s not new. What is new is that Jones Day has been involved in representing Republicans in their attempt to overturn the results of the presidential election. “How can the Globe’s political journalists be asked to continue to endure such workplace attacks from the very law firm whose actions they are now reporting on and investigating?,” the union’s letter asks.
• The Globe is not for sale. From time to time, rumors have circulated within the newsroom and in the larger community that the Henrys are looking to get out. This happened most recently last fall, when Linda Henry presided over a town hall-style meeting on Zoom at which she was asked about a replacement for Mehra.
When I asked her about it, she replied via email, “The Globe is not for sale, I’m pretty sure you would have picked up on if it was.” After that, the rumors appeared to fade away. Now, by occupying the top two operational roles at the Globe, the Henrys, seven years into their ownership, clearly seem to be sending a signal that they’re in it for the long term.
Comments are open. Please include your full name, first and last, and speak with a civil tongue.
Are John and Linda Henry looking to sell The Boston Globe? Folks in the newsroom have been wondering in recent weeks. But according to Linda Henry, the paper’s managing director, the answer is no.
Henry hosted a Zoom town hall for Globe employees earlier today. Among the questions she was asked, according to a source, was whether the departure of Boston Globe Media president Vinay Mehra last week was related to a possible sale. I contacted her a short time later, and she replied via email:
The question [at the town hall] was if Vinay’s departure had anything to do with our ownership status, which it absolutely doesn’t. This doesn’t affect our thinking or what we have said about stewarding this great institution. The Globe is not for sale, I’m pretty sure you would have picked up on if it was.
The idea that a sale might be under consideration gained steam recently when Sarah Betancourt reported reported in CommonWealth Magazine that — according to the Boston Newspaper Guild — the Henrys were “apparently insisting on the removal of a provision in the existing contract that would keep the contract terms intact if the newspaper is sold.” Management and the Guild have been enmeshed in acrimonious contract talks for quite some time.
Yet in most respects the Globe seems to be doing well, although its status as a profitable business probably came a sudden halt when the COVID-19 pandemic hit and advertising nosedived. The paper went over the long-hoped-for 200,000 mark in digital subscriptions recently, and hiring continues. Just today, editorial-page editor Bina Venkataraman announced that Kimberly Atkins would be leaving WBUR Radio and joining the opinion section as a Washington-based senior writer.
Editor Brian McGrory also announced ambitious plans just last week to improve the diversity of the Globe’s hiring, promotions and coverage.
Two years ago, John Henry responded to similar talk of a sale by saying: “I don’t think of selling any local assets during my lifetime. Linda and I love and are committed to this city.”
It sounds like that hasn’t changed.
Vinay Mehra, president of Boston Globe Media Partners, is leaving after three years at the helm, according to an announcement to employees by managing director Linda Henry late this afternoon.
No idea of what prompted this, but I wonder if Mehra’s departure might help break the logjam between the Boston Newspaper Guild and management, which are bogged down in protracted contract negotiations.
Then, too, the union has raised the prospect that John and Linda Henry are interested in selling the Globe, according to a recent story by Sarah Betancourt of CommonWealth Magazine. It seems unlikely, but who knows?
What follows is Linda Henry’s message, a copy of which was provided to me by a trusted source a little while ago.
After three years with us, today is Vinay Mehra’s last day with Boston Globe Media Partners.
We are grateful for his work in helping to stabilize and grow our remarkable organization and are especially thankful to him for building an incredibly strong and effective Senior Leadership Team. This team is well-positioned to lead our organization and to continue the important work of ensuring that our institution continues to serve our community and our mission for years to come.
We wish Vinay the best of luck in his next venture.
Linda Henry
A source just sent along this end-of-the-year message from Vinay Mehra, the president and chief financial officer of Boston Globe Media Partners. It follows publisher John Henry’s statement earlier this week that the Globe is now profitable and is likely to remain in the black next year as well.
The main takeaways here are that the Globe, having passed the crucial 100,000 mark for paid digital subscriptions several months ago, is now closing in on 110,000. Globe executives have said that if they can hit 200,000 then the paper may be able to achieve long-term sustainability. Also of interest: The Globe is taking part in a three-month exercise with Harvard Business School “to define our business strategy.”
What’s missing: Any mention of the Globe’s contentious negotiations with the Boston Newspaper Guild, including management’s decision to bring in what the Guild has described as a “union-busting” law firm. One hopes that Mehra and the Henrys understand that the people who produce what he describes as “the many successes our journalism racked up this year” should be treated fairly.
The full text of Mehra’s message follows.
Dear Colleagues,
As we head into the holiday season, on behalf of [managing partner] Linda [Henry] and myself, I want to take a moment to share with you a few highlights of what we have achieved this year as well as an outline what we hope to achieve in 2019.
Our success in 2018 was no accident. It was a tough year that required a lot of work and I am pleased to say our efforts began to pay off. We started, of course, with powerful journalism across all our brands — The Boston Globe, STAT and Boston.com. On top of that, we found areas of real growth, while we aggressively targeted savings across all facets of our business and carefully managed expenses to stay ahead of the structural declines we are all seeing in our industry. For the first time in a long time, we are ending the year in black, and to remain there we must continue our vigilance in looking for efficiencies.
But financial results are just one measure of the many successes our journalism racked up this year. There are way too many to list here, so I’ll mention just a few:
- Spotlight was a Pulitzer finalist for its groundbreaking series in December [2017] on race issues in Boston that inspired a region-wide discussion that has no precedent
- Our coverage of the State Police overtime fraud investigations, the Columbia gas explosions in the Merrimack Valley, the investigative pieces on Massachusetts secret courts and the TSA’s Quiet Skies program drove accountability and change
- The stories in STAT about IBM-Watson’s troubled health business led to a major leadership change at the company
We also extended the reach of our journalism by expanding into new platforms:
- The Aaron Hernandez Spotlight series in the Globe resulted in a podcast with over 4 million downloads, a trip to number 1 on the Apple charts, and considerable interest from Hollywood
- Last Seen, a true crime podcast examining the most valuable and confounding art heist in history from the Isabella Stewart Gardner Museum, hit over 3.4 million downloads and was in the top 10 on iTunes
- Season one of the Love Letters podcast launched earlier this year when Meredith took on the hardest question she gets: How do I get over it? Leveraging its success, season two will launch in early 2019
As incomparably talented as our journalists are, they don’t do it alone. Peel back the curtain, and what’s revealed is you … our employees across all departments of BGMP [Boston Globe Media Partners]. Day in and day out, your coordinated efforts — leveraging your relationships, expertise, passion and creativity are what have made this institution a leader in an industry that is starting to find its footing.
For growth on the digital side to be sustainable, we must remain focused, bold, and daring, and in 2018, we had no shortages of examples:
- We continued our digital growth, ending the year with close to 110,000 digital-only subscribers for the Boston Globe — more digital subscribers than almost any other major metropolitan news organization
- We invested in a new digital content management system, Arc, and launched a new mobile app for the Boston Globe, another step in our digital transformation
- STAT doubled down on coverage of life sciences, pharma and biotech, resulting in record revenue and subscriber growth
- We launched a new section on cannabis dedicated to covering and facilitating conversations around the politics, business, use and impact of cannabis in the Northeast
- Our events brought the community together to talk about important issues such as race, the future of work, the future of democracy, and the midterm elections
Impressive commercial results and remarkable engagement of our readers to our stories are not the only things that drive us. Being a leader in the news industry comes with responsibility. We take that role seriously and demonstrated it in August, when our editorial board led a coordinated effort that resulted in 450 newsrooms across the country joining us to defend the freedom of the press against harmful rhetoric labeling the press as “the enemy of the people.”
As important as it is to drive these conversations in the community, it’s important for us as an organization to reflect on how we can live up to what we shed a light on. One example was the Race Series, which prompted a degree of self-reflection. Leadership on diversity and inclusion starts at the top, so we have made an intentional effort to ensure our executive team represents a broad range of backgrounds. We will continue to move through our practices in recruiting, talent assessment, and measuring the leadership of this organization against a few core guiding principles, one of which is related to creating an environment that nurtures inclusion, and compensation goals will be tied to this important measure.
It’s not lost on me that there are many questions about the future of our business and our strategy. This past month, a cross-functional team of more than 30 leaders across all disciplines of our organization met with me and a team from Harvard Business School to begin a 3-month exercise to define our business strategy. We all left very encouraged and I will have more to share as we move forward.
As we reflect on a transformative and eventful year, the reality is this: when the business had been experiencing double-digit declines we didn’t dig a hole and hide, we invested — in new business models, new technologies, new talent. We didn’t lose faith. We continued to produce quality journalism, launch new products, and provide opportunities to convene our community around important issues.
All of us know that people who choose to spend their lives in the news business are special, they’re unique, and they are undeniably passionate about their work. This isn’t simply a job, it’s a mission — a mission motivated by our love of informing people. And that’s precisely what makes me so proud to work alongside each and every one of you.
We wish you and your loved ones a happy, restful and safe holiday and I look forward to seeing you in 2019.
Vinay
Here’s an unexpected development: The Boston Globe, which has been losing money more often than not for years, is now turning a profit, according to publisher and owner John Henry.
“The Globe may have turned the corner finally due to management, increasingly relevant journalism, continuing strategic investment and by becoming much more efficient in all areas,” Henry said Tuesday night in response to an email query. He added: “I don’t know how long it has been … since the Globe had a profitable year but we will this year and probably next as well. As our digital growth continues the sustainability of a vibrant Boston Globe is coming into view. It’s been a long time coming.”
What prompted my email was buzz coming out of the Globe newsroom that management had claimed the paper was running in the black. It struck me as unlikely, but Henry has now confirmed it, although he did not respond to my request for some actual numbers.
The good news comes at a moment when Henry and his management team have taken an aggressive stance in contract negotiations with the Boston Newspaper Guild, the union that represents the Globe’s editorial employees and many on the business side as well. The Guild recently issued a statement denouncing management for hiring the “union-busting” law firm Jones Day, described by the Columbia Journalism Review as “notorious for aggressive anti-union tactics that journalists and union leaders say have helped downgrade media union contracts and carve employee benefits to the bone.”
I asked Henry if he was concerned that hardball tactics with the union could result in a loss of goodwill with his employees and the public. As you’ll see below, he did not answer directly. But it doesn’t seem like a good look to crack down on the union at a time when its members’ sacrifices have helped Henry balance the books. That said, negotiations often get ugly. That doesn’t mean the talks can’t be resolved on terms both sides can live with.
Henry, a billionaire financier who is also the principal owner of the Red Sox, has long lamented the Globe’s declining fortunes and the dismal state of the newspaper industry in the five years since he bought the paper from the New York Times Co. When I interviewed Henry in early 2016 for my book “The Return of the Moguls,” he said he expected to lose money both that year and the following year. “You look at the Globe — we have about $300 million a year in income and we can’t make money,” he said. “The cost of making money is high.” (Earlier this year the Boston Business Journal estimated that revenues for 2018 would range from $225 million to $250 million.)
This past July, Henry told me in an email interview for WGBH News that the losses were continuing. “The Globe cannot ever seem to meet budgets — on either the revenue side or the expense side and I am not going to continue that,” he said. “This has always been about sustainability rather than sizable, endless, annual losses. That is frustrating and due to a combination of mismanagement and a tough industry.”
Since that time, management, headed by president and chief financial officer Vinay Mehra, has cut spending on both the news and business sides. It seems to have worked, although news coverage and customer service have taken a hit. Throughout the news business, of course, revenues continue to decline. But there is reason for some optimism with the Globe. Several months ago it passed the 100,000 mark for digital subscribers, an important milestone. Globe officials have said the paper could approach financial viability if they can reach 200,000. Needless to say, that’s a lofty goal.
The full text of Henry’s email follows.
The Globe may have turned the corner finally due to management, increasingly relevant journalism, continuing strategic investment and by becoming much more efficient in all areas.
There has also been a focus on getting costs and practices closer to industry standards of major newspapers. This is something the Globe was never able to do. And this is what I believe management is continuing to do in its negotiations with the guild presently.
We want the strongest possible newsroom in the future. Much as sports teams are dependent on the talent of those who take the field every day, the Globe depends on a talented newsroom and editorial page that hopefully has the tools they need to be successful. So ultimately I believe management and the guild will find common ground in a very challenging environment for newspapers where your very survival is dependent on doing the right things day-to-day.
Both have the same overriding objectives — to provide our community with vital, serious journalism.
I don’t know how long it has been, Dan, since the Globe had a profitable year but we will this year and probably next as well. As our digital growth continues the sustainability of a vibrant Boston Globe is coming into view. It’s been a long time coming.
A source sent this to me a little while ago. It’s a message from Vinay Mehra, the president and chief financial officer of Boston Globe Media. Not a lot of news here. For my money, the most interesting revelations are that Stat, the company’s health and life-sciences vertical, continues to grow, and that Design New England magazine has been discontinued. (Confession: I’m not sure I’ve ever seen an issue.)
For more on the Arc content-management system and the latest on the Globe’s digital subscriptions, see the email interview I did with publisher John Henry last week for WGBH News.
The full text of Mehra’s message follows.
Team,
Happy summer! As we go into the second half of the year, the Senior Leadership Team and I would like to share with you where things stand midpoint of this year. Here are some highlights:
- The newsroom continues to hit it out of the park. The Spotlight Team was a finalist for the Pulitzer Prize for a series on race that spurred an unprecedented conversation in this region. Our recent TSA piece has made waves nationally. Day in, day out, there is uniquely compelling journalism on our site and print pages, including the launch of the latest reader advocacy initiative, the Help Desk.
- We continue to invest in the future of the Globe. Our latest investment in our digital future is ARC, our new publishing platform that will result in the redesign of our Globe.com website, and the launch of an ioS and Android Boston Globe app in August. There has been great collaborative work across the company to get to this point, and I am grateful for everyone’s help.
- We have been disciplined on reducing costs, from ensuring we establish a robust contract management process to more tightly managing expenses, and continue to push ourselves on creating new revenue opportunities and exploring new ways to meet readers where they are, leveraged by our entrepreneurial spirit.
- While advertising sales continues to experience industry disruption, we are excited about the potential of BG BrandLabs and sponsored content — we have completed 21 customer campaigns since the beginning of the year and have 14 more in our pipeline. Leading companies across the region appreciate and seek out partnerships with us and we will continue to build on that momentum.
- Subscription revenues are on budget with our digital subscriber base over 94,000, putting us #1 among U.S. major metros in terms of total digital subscription revenue. With Pete [Doucette]’s departure, I have made the decision to conduct a search for a new head of consumer revenues, and I am pleased with the initial results of the search and the caliber of candidates who are interested in the role.
- After months of negotiation, we have an agreement with the Pressman, Mailers and the Drivers unions. We appreciated the partnership with the bargaining committees and these new contracts give us the flexibility we need to continue to meet the needs of the market and industry.
- We made the difficult but necessary decision to discontinue publishing Design New England magazine in order to redirect resources into our growth. This was hard news for our colleagues affected by the change, but we were transparent with the decision making process and explored all options before coming to this decision.
- STAT, our bold life sciences initiative, continues to see impressive growth – year over year growth in advertising by 59% and growth in subscribers by 308%.
The constant change we are experiencing is what it feels like to be in transformation, and frankly, it will continue. While it is no doubt challenging to navigate in a business as dynamic as ours, I can tell you that we are not alone in this challenge and I believe that our organization will be positioned for success. Since starting at the Globe, I have spent a lot of time out in the field speaking with CEOs in the greater Boston area, familiarizing myself with the unique perspectives within the region and forging relationships that will ultimately allow our organization to help tell the incredible stories of growth, disruption and innovation in our backyard. The good (and bad) news is that I hear the exact same set of challenges in all of these discussions. Everyone, in every industry, is experiencing the very real ups and downs of transformation. The key for us is to stay focused on why we do the work we do, because what I also hear in these conversations is that we, the Globe, are critical to this city.
Success will require that all of us — and particularly the Senior Leadership Team — work across boundaries as one Boston Globe and in harmony with our partners. In the coming month, the Senior Leadership Team and I will be engaging in a strategic planning process to determine our plans for long-term growth. Expect to hear more from us after some of that work is done.
Finally, I truly believe that each of us must find meaning in our work. The best work happens when you know that it’s not just work, but something that will inform and improve other people’s lives. This is the opportunity that drives each of us at this company.
Thank you for your ongoing support and hard work. I recognize we wouldn’t be where we are without the contributions made by each and every one of you.
Vinay
As if there weren’t enough turmoil at The Boston Globe, president Vinay Mehra and editor Brian McGrory earlier today announced another round of budget cuts. Mehra and McGrory say they hope to find the savings they need through buyouts, but they won’t rule out layoffs. No word on how many people they are hoping will exit the building. The memos were obtained from a newsroom source.
In addition, the last vestiges of the Sunday zoned editions for local news are being all but eliminated, as Globe North, Globe South and Globe West are being combined into a Sunday section to be called Globe Local.
Both Mehra and McGrory claim the effect on the Globe’s journalism will be minimal. Obviously, though, this is a perilous route to take at a time when the paper is trying to offset an industry-wide decline in ad revenues with high-priced digital subscriptions. McGrory has previously said the Globe is on track to hit 100,000 digital subscriptions by the end of June, and that the paper may approach sustainability if that number can be doubled during the next few years. It’s encouraging that readers are willing to pay — but it remains to be seen if they will pay more for less.
“As to what it all means — well, a lot,” McGrory writes. “It means there was an unanticipated revenue shortfall heading toward the last half of the year and we need to stem it quickly. It means that this business hasn’t gotten any easier…. This does not mean there is a hiring freeze. This does not signal Draconian cuts. It gives us the most options, in the most humane way possible. We are absolutely hiring for key jobs, with a couple of offers out there as I write.”
What follows is the top of Mehra’s memo, minus a detailed explanation of how employees can apply for the buyout.
Every day The Boston Globe produces the best news report in the region and one of the best regional reports in the country. But as the news business changes, and more subscribers seek to read us on digital, our cost structure remains out of line with the realities of the industry.
While we have built a large and growing digital business, we still have an organization built on the profit margins and specific needs of the print era, where the economics continue to be challenging as advertising has shrunk across the sector. We’ve done much to change; we still have more to do. We can’t afford to slow down in our efforts to build The Boston Globe of the future, one in which subscribers play an increasingly central role in our revenue model.
So we are now announcing a buyout primarily designed for people in our newsroom, advertising, and marketing departments. We will use any savings to address the current economic realities and invest in our core strength — great journalism, with an eye toward our digital offerings.
We are optimistic that the buyout, the first in two years, will result in the savings we need to create a sustainable Globe. If we do not get enough takers, we’ll have to consider all other options, including layoffs.
We know the last few years have been a time of dramatic change, and that it has placed tremendous pressure on everyone in the organization. And we know that this latest buyout — like previous ones — will mean saying goodbye to cherished colleagues. But this is a good moment to take stock of how much we have already accomplished in growing our digital audience and telling stories in different ways. We must take this next step – so we can invest in our growth and enhance our stature as a news organization.
And here is the full text of McGrory’s memo.
No doubt that many of you have questions about the buyout, what it means generally, what it specifically means to those interested. I’d like to be helpful, and Jen [managing editor Jennifer Peter] can be as well.
Briefly, I’ll say that we haven’t done one of these in a couple of years, and I would advise against going into it assuming there will be another any time soon. This one, as you’ve likely noted, will differ in a few key ways from past practice. First, people will get two weeks for every year of service, but the total package will be capped at six months. Second, the company is asking that you declare your intentions within the first two weeks of the offer. Third, you won’t get personalized packages sent to your homes; rather, if you’re interested, you’re encouraged to make an appointment with human resources straightaway for a direct discussion.
As to what it all means — well, a lot. It means there was an unanticipated revenue shortfall heading toward the last half of the year and we need to stem it quickly. It means that this business hasn’t gotten any easier. It means that the company has agreed to take the most flexible approach to the newsroom and a couple of other departments. This does not mean there is a hiring freeze. This does not signal Draconian cuts. It gives us the most options, in the most humane way possible. We are absolutely hiring for key jobs, with a couple of offers out there as I write. The success of this organization is going to rise in no small part on the success of this room.
Will it lead to newsroom layoffs? I’m optimistic that it won’t, but can’t make guarantees. I don’t believe it would be a significant number under any circumstance. We need to see who puts in for it. I’ll be as open as possible about the need and our plans.
Cuts are being made elsewhere in the newsroom — and across the organization. We’re making some page reductions that we hope will have no major impact on our readers. These trims will give us cost savings from materials and freelance spending, and free up editing resources that can be devoted to other places. One change worth noting is to our regional editions — Globe North, Globe South, and Globe West. Our editors do great work putting out high quality sections week after week, but revenue-wise, they are on the verge of going under water. We are planning to create one edition that will run across all zones, called Globe Local, and zone the advertising, so that businesses still have a lower cost, more targeted option. In other words, if you’re a bank on the South Shore, you can advertise in the Globe Local edition that only goes to the South Shore, but the journalism in it will come from all over.
Again, feel free to come see me or Jen, individually, in small groups, or however you want. I am truly hopeful that this buyout will work well for a good number of people, and that the faster process will allow us to not lose sight of our vital work.