Boston Globe forced to cut $20M... or else

(Report 4-4-09-1)

N.Y. Times Co. threatens to shut down Boston newspaper

by Christine McConville
& Jessica Heslam
DNN Reports!
Saturday, Apr. 4, 2009

The New York Times Company has threatened to shut down the Boston Globe if the paper doesn’t come up with $20 million in cuts within 30 days in a dramatic act of brinksmanship at the beleaguered broadsheet.

The new draconian demands come just days after the latest round of layoffs at the Globe.

A boston.com report and two sources with direct knowledge said the Globe’s out-of-town corporate masters have presented the unions with a stark and painful choice: Agree to massive cuts within a month or face closure.

After a 90-minute meeting Thursday between Times and Globe executives and officials from the paper’s 13 unions, Daniel Totten, president of the Boston Newspaper Guild, wrote members that, “They are looking for financial concessions from all unions.”

Totten said the concessions could include pay cuts, elimination of lifetime job guarantees given to some employees and an end to pension contributions by the company, boston.com reported.

A union official briefed on the meeting said the concessions include salary and overtime cuts - and furloughs were also brought up in the meeting.

Catherine Mathis, spokeswoman for the fiscally troubled Times, and Globe spokesman Bob Powers declined to comment.

Other sources said word of the meeting and its dire message sent a shockwave through a newspaper that has been battered by bad news and decimated by layoffs - including the loss of the equivalent of 50 editorial staffers through buyouts and layoffs during the past week.

The Globe lost some $50 million last year and stands to lose $85 million this year without “serious cutbacks,” boston.com reported, quoting a Globe source. That same source said the Times can no longer subsidize the Globe’s losses.

The Globe’s declining circulation and ad revenue have been a huge drag on the Times Co. books as the New York parent faces more than a billion dollars in debt, not including significant pension obligations.

Prior to page cutbacks last fall, a 5 percent salary cut for managers and the most recent layoffs, the Globe was reportedly losing $1 million a week.

In New York, Times unions facing cuts are fighting back.

The union representing Times editorial employees is set to ask the newspaper’s publisher to guarantee executives and other nonunion workers won’t get bonuses if it accepts pay cuts this year.

The Newspaper Guild of New York said in a memo Thursday it may also seek assurances that the salary reductions of as much as 5 percent will prevent job cuts. The Times asked the union to agree to reductions to help save about $4.5 million this year, the Guild said.

The Times Co. enforced wage cuts of 2.5 percent to 5 percent for all nonunion employees and eliminated 100 positions at its namesake newspaper after advertising sales continued to drop this year after a 13 percent decline in 2008.

The New York guild said the publisher has threatened to eliminate as many as 80 jobs, including 70 newsroom positions, if the guild doesn’t agree to its demands.

But the Boston unions may be even tougher to crack.

Totten, a few days before the Thursday meeting, told Globe management in a letter, “The BNG has lost some 78 members to layoffs or buyouts in the last three weeks.

“In the last few years, some 400 members have been laid off or taken buyout packages. We have done our share. We can spare no more members,” he added.

In a memo to guild members after Thursday’s meeting, Totten said he told company executives “now is the time for NYT/Globe management to show leadership and take the necessary cuts from among their own ranks.”