Pacific Northwest Newspaper Guild Blog

Timothy Egan writes a compelling blog post on called “Save the Press” on the New York Times site.

No, I don’t know whether it also appeared in print.

Today The Seattle Times sent out a message to its employees about changes in its health-insurance benefit plans. These changes will affect employees in the Guild in all our major departments–Advertising, Circulation, Composing and News.

The Times says it is making these changes in an effort to limit increases in the cost of health care.

The rising price of health care is a national crisis. The employer-based system of health insurance is failing millions of people—those who aren’t offered insurance as an employee benefit, and those who can’t afford the coverage their employers offer. Employers who do offer health-care benefits are shifting more of the costs to employees.

Our contract language says the company can make changes to the health-care plan design, the plan carriers, the benefits and the coverage, as long as the same changes occur for unaffiliated and managerial employees. We have the right to meet and confer with the company on these changes.

Other elements of the health insurance are written directly into our contract language and cannot be changed without negotiation. These include:

1. The 75 percent/25 percent split on health-care costs between the employer and the employees.

2. The hourly wage diversion as a means of paying for health coverage.

3. The “composite” rate, which divides the cost of the coverage equally among all the employees covered by the plans.

Changes to those things MUST be bargained with the union.

If you have other questions, comments or concerns, please forward them to info@pnwguild.org and we will post answers on the blog at www.pnwguild.org.

Our parent union, the Communications Workers of America, is launching a national campaign to support a comprehensive solution to the health-insurance crisis. We are in the process of scheduling a workshop for our members to learn more about this campaign. If you are interested in attending, please e-mail the Guild office at info@pnwguild.org.

The Blog finds a story in Arizona Republic quite interesting. It details the death of a 114-year-old newspaper in Winslow, Ariz. What killed it? Too much negativity from a muckraking reporter.

The emphasis in newspaper reporting is to seek out injustices, to write about conflicts, to search for an element of controversy that makes the story. That didn’t play well in Winslow, making this story one that editors at big-city metro papers should heed. If the path to success lies in “local, local, local,” this means editors can’t overlook the type of good-news stories and personality profiles that are usually relegated to the features page. In fact, you should devote more resources to this section, especially when trying to appeal to suburban readers.

The Detroit Newspaper Guild has won an arbitration challenging a ban on political contributions by editorial employees at the Detroit Free Press. Finally! Even as journalists, you have the right to a life. This whole myth about journalism as some kind of religious vocation has only worked against employees. Read about the arbitration in the Guild Reporter.

Bill Richards of Crosscut.com, permanently assigned to the Blethen Death Watch beat, says the lawsuit The Seattle Times Co. has filed in Maine against the Portland Newspaper Guild reveals an owner balanced precariously on the edge of survival. Unless the company can unload its properties in Maine, its lenders may bring the hammer down, Bill says.

The wet raspy sound you hear is the Hearst Corp. licking its chops.

At convention today, the Communications Workers of America, the Newspaper Guild’s parent union, voted to endorse Sen. Barack Obama for president.

Tony Winton of the News Media Guild, which represents journalists at AP, noted that because some Guild members report, write, edit and photograph political coverage, this endorsement should not be considered to be a statement on their behalf.

A few days ago the Blog noted that The Seattle Times Co. has sued the Portland Newspaper Guild in federal count over the validity of the successor clause in the Maine contract. A successor clause requires a buyer to assume the obligations of a labor contract, which is pertinent in Maine since the Blethen are hoping to sell. Here’s the latest message from Chuck Cochrane, publisher of the Portland Press Herald:

Memo from Seattle Times Co.’s senior vice president/affiliate newspapers

Date: Wed, 18 Jun 2008 10:42:39 -0400
Subject: Court Action

To: All Staff
From: Chuck Cochrane

The owners of Blethen Maine Newspapers filed an action yesterday in United States District Court of Maine that seeks the court’s intervention in getting a timely decision as to whether or not a buyer of the company’s assets must assume the Portland Newspaper Guild’s labor contract. A copy of that filing is attached for anyone who would care to read it. The company reluctantly took this step only after repeated attempts failed to convince the guild’s leadership to voluntarily agree to resolve this matter through an expedited arbitration.

This action seeks a third party resolution to a fundamental disagreement between the company and the guild. The company’s position is that an asset sale does not obligate a buyer to accept the company’s labor contracts. The guild contends that language contained in its labor agreement does require that a buyer assume its contract. The disputed language is specific to the company’s contract with the Portland Newspaper Guild, and none of the contracts with the company’s other five bargaining units contains similar language. This is a technical legal issue that needs to be resolved before the sale exploration process can be concluded and therefore time is of the essence.

Even though the owners of Blethen Maine Newspapers do not believe that a buyer can be forced to assume the guild contract, they are willing to ask prospective buyers if they will agree to do so voluntarily. However, none of the interested parties has so far indicated any inclination to accept the current contract as it is written.

Some employees may feel that failure to attract a buyer would be the best outcome. However, that is unlikely to be the case. Unfortunately, the current ownership does not have the resources to sustain our operations at anywhere near past levels in the face of ongoing revenue declines. That is a major reason why Blethen Maine Newspapers was put up for sale in the first place. We have already been forced to implement multiple rounds of layoffs and take other cost cutting measures in recent times. In fact, another significant staff reduction at Portland Newspapers was just announced on May 30. As with the previous cuts, the upcoming staff reductions are due to weak advertising revenues. Through May this year, advertising revenue at Portland Newspapers is tracking down more than 18 percent from last year. If a sale doesn’t occur and revenues don’t improve, the company may be forced to make even deeper reductions. In addition, Blethen Maine Newspapers will continue to suffer from a lack of capital dollars to make the investments in technology and infrastructure that could improve its position in the future. A new owner with more resources might well be better able to weather the transformation process these newspapers and the entire newspaper industry are undergoing.

While this communication paints a pretty bleak picture, it is a realistic look at our current situation. These circumstances make it imperative that the owners of the company (as well as prospective buyers) have a timely and clear resolution on the conditions of a possible sale.

I fully understand that this and other issues concerning the sale exploration, coupled with the staff reductions we are undergoing, are very unsettling to our employees. We are trying to move through this process as quickly as possible in order to achieve some clarity and certainty for everyone involved, and today’s court filing is intended to help us do that. To the extent possible, I will share further developments with you as they unfold. In the meantime it is in all our best interests to stay focused on doing our jobs as well as we can in order to keep the company as financially healthy as possible. That is our best hope for a measure of security in these uncertain times. For anyone who may be experiencing difficulty coping in these stressful times, I encourage you to take advantage of the confidential employee assistance program the company provides for its employees.

If you have any questions, please feel free to contact me.

Okay, more stuff coming out of the Hearst Corp. blowhole about Ganzi’s departure. Here’s the latest love letter from Frank Bennack, a former Hearst CEO who is now the temporary new CEO (Cue up Roger Daltrey singing “Meet the new boss….same as the old boss.” Fascinating that Hearst—which usually issues no explanations—again adds that dig about “irreconcilable policy differences.” We hope Vic launches on facebook and dishes dirt! (Here’s the Business Week take on it.

June 18, 2008

Dear Colleagues:

Hearst Corporation will announce today that Victor Ganzi has resigned as president and chief executive officer. Below you will find the press release we plan to issue shortly.

I have always believed that our company is a unique enterprise, remaining a leader over many decades, while continually changing to stay ahead in dynamic markets—this will continue to be the case.

Accordingly, the Hearst Board of Directors has formed a search committee to select a new CEO and plans to explore a full range of options to identify who will lead the corporation into the future. In the meantime, I will resume the role of CEO while we conduct our search for Victor’s successor.

Victor has been a member of our Hearst family for more than 18 years—six of them as our CEO—and by today’s standards that is an especially impressive dedication to any one organization. He worked diligently to direct Hearst during this critical time, and we are very appreciative of his commitment to Hearst’s future. I know that you will join me in wishing him well.

None of this changes the fact that Hearst is, and will remain, a market leader. I am confident that we will move forward seamlessly, building on our strong electronic and print products, and demonstrated record of performance. After 121 years, Hearst is experienced when it comes to adapting to change—we have proven over the course of our long history that we are successful in any medium and in any time, constantly offering new ideas and innovative products, platforms and services to our customers and our industry.

As we navigate challenging economic times and our own transitional period, I hope you will join me in re-dedicating ourselves to meet the full range of opportunities and challenges that face us, today and tomorrow.

Along with thanking Victor, I want to take a moment to thank you for all of your hard work and dedication in making Hearst Corporation excel on all fronts. I am very optimistic about Hearst’s future, and I know that you join me in looking ahead to a bright future.

Sincerely,
Frank A. Bennack, Jr.

VICTOR F. GANZI RESIGNS AS PRESIDENT, CEO AND DIRECTOR OF HEARST CORPORATION
Frank A. Bennack, Jr. Reassumes CEO Role As Board Launches CEO Search

NEW YORK, June 18, 2008–Hearst Corporation today announced that Victor F. Ganzi, president, chief executive officer and director of Hearst Corporation, one of the nation’s largest diversified media companies, has resigned from the company. The reason for his resignation was irreconcilable policy differences with the Board of Trustees about the future direction of the company.

Hearst’s Board of Directors has formed a search committee to find a new CEO and plans to explore a full range of options to identify who will lead Hearst Corporation in a dynamic and evolving media marketplace. In the meantime, the Board has asked Frank A. Bennack, Jr., vice chairman of the Hearst Board of Directors and chairman of the Executive Committee, to reassume the role of CEO. Bennack is the immediate past president and CEO of Hearst Corporation. For 23 years, he directed Hearst through an unprecedented period of growth.

The announcement was made jointly by George R. Hearst, Jr., chairman of the Hearst Board of Directors, and Bennack, following a meeting of the Hearst Board of Directors.

“Victor Ganzi worked diligently to direct Hearst during a critical time, and we are appreciative of his commitment to Hearst’s success. We wish him well in his future endeavors,” Hearst and Bennack said.

“It has been an honor leading this company and working with such talented people throughout the organization over the past 18 years—and the last six as CEO,” said Ganzi. “Based upon 15 record profit years out of the last 16, Hearst is well-positioned to extend its leadership in the media industry in the future. I will work with the company to ensure an orderly transition of leadership.”

Hearst Corporation (www.hearst.com) is one of the nation’s largest diversified media companies. Its major interests include ownership of 15 daily and 31 weekly newspapers, including the Houston Chronicle, San Francisco Chronicle and Albany Times Union; as well as interests in an additional 44 daily and 38 non-daily newspapers owned by MediaNews Group, which include the Denver Post and Salt Lake Tribune; nearly 200 magazines around the world, including Cosmopolitan and O, The Oprah Magazine; 29 television stations through Hearst-Argyle Television (NYSE:HTV) which reach a combined 18% of U.S. viewers; ownership in leading cable networks, including Lifetime, A&E, History and ESPN; as well as business publishing, including a minority joint venture interest in Fitch Ratings; Internet businesses, television production, newspaper features distribution and real estate.

Interesting news coming out of Hearst. Vic Ganzi, CEO, is stepping down. Here’s the word from Hearst corporate headquarters:

NEW YORK, June 18, 2008–Hearst Corporation today announced that Victor F. Ganzi, president, chief executive officer and director of Hearst Corporation, one of the nation?s largest diversified media companies, has resigned from the company. The reason for his resignation was irreconcilable policy differences with the Board of Trustees about the future direction of the company.

Okay, so WHICH direction? Personally, it’s okay with The Blog if they fund good journalism with a pornography division. Consenting adults and all that. But somehow, we don’t think that’s the disagreement. Maybe Vic doesn’t like Bus Chick? Inquiring minds want to know.

The Portland Newspaper Guild in Maine is being sued by The Seattle Times Co. over a dispute concerning a successor clause in the Maine union contract. A successor clause requires the buyer of a company to assume the obligations of the existing labor contract. It’s great to have language like that, because it gives peace of mind in the event your company is sold. The Blethens are challenging the clause. Vice-President of Operations Alayne Fardella sent out this message to Times employees today:

From: Company Communications
Sent: Wednesday, June 18, 2008 8:32 AM
To: All Seattle Times
Subject: Message from Alayne Fardella

As you know, we are in the process of pursuing a buyer for the Blethen Maine Newspapers. I want to inform you of a new development. Yesterday, we filed an action in the U.S. District Court of Maine seeking the court’s intervention in getting a timely decision as to whether or not a buyer of the Company’s Maine assets must assume the Portland Newspaper Guild’s (PNG) labor contract.

Our position is that Blethen Maine’s contract with the Guild contains no requirement that a buyer assume the current labor contract. The Guild, however, contends that the contract specifies that a successor owner of the newspapers must retain the current labor contract.

The contract dictates that this type of issue be settled by binding arbitration. However, the PNG has thus far declined to participate in arbitration. This legal action is an attempt to resolve the dispute as soon as possible so we can proceed as planned with the sale exploration process.

Although we do not believe that a buyer can be forced to assume the PNG contract, we are willing to ask prospective buyers if they will agree to do so voluntarily. So far, none of the interested parties has indicated an inclination to accept the current contract as written.

Our goal, as we’ve stated before, is to focus our limited resources on our Washington newspapers. In both Washington and in Maine, we have already been forced to undertake significant layoffs and other cost-cutting measures. While the Blethen family only reluctantly decided to sell their Maine newspapers, the sale will be an important step toward sustaining and investing in our Washington operations. Likewise, we hope to attract a buyer for the Maine papers who has the resources to invest in and sustain them through this challenging time in our industry.

As you know, the economic struggles we face are not unique to us. Just this week, McClatchy announced 10% reductions in staffing across all of their newspapers as well as the outsourcing of their printing in some Washington newspapers. The Newspaper Association of America announced first quarter print advertising sales fell 14%, the largest decline on record since 1971.

Because of the grave challenges facing the newspaper industry, it is very important that we quickly resolve the disagreement with the Portland Newspaper Guild and proceed with pursuing a buyer. For that reason we chose to seek the court’s assistance.

As always, if you have questions or concerns, please feel free to ask your department head or me.
Alayne