Human Liberation Front
23rd July 2013, 16:46
NEWARK — Looking for major concessions from its unions, The Star-Ledger today threatened to shut down by the end of the year without $9 million in labor givebacks.
The paper said it lost $19.8 million last year and expects the same this year.
“We cannot keep operating the newspaper with these losses,” publisher Richard Vezza said.
The Star-Ledger, which has won three Pulitzer Prizes and several national journalism awards, is New Jersey’s largest daily newspaper.
Vezza said he remained hopeful an agreement would be reached, but set a deadline of Sept. 27 for the concessions or an agreement by the unions that clears the paper to outsource production to another company. Without either by then, he said The Star-Ledger will cease publication Dec. 31.
Ed Shown, president of the Council of Star-Ledger Unions and GCC Local 8-N — the union that prints the newspaper — called the publisher’s threat “another sad and pathetic attempt to pound all of our union brothers and sisters into a state of submission.”
He said The Star-Ledger has demanded 55 percent of their entire wage package.
Shown said more than 300 people work as drivers, pressmen, warehouse and inventory employees at the paper, many New Jersey residents.
“All of our unions are more than willing to negotiate a fair contract and do whatever we have to so that The Star-Ledger may remain a thriving newspaper in these challenging economic times,” he said.
This is not the first time The Star-Ledger’s owners have threatened to close the paper if demands were not met. In July of 2008, then-publisher George Arwady claimed the paper was on “life support.” Two months later, the paper announced new deals with its drivers and mailers unions, and more than 200 buyouts from its non-union employees.
Word of the current situation came in a letter from Vezza this morning, noting the newspaper began talking with its unions in December. Its labor contracts expire in July.
Laying out an estimated $51.6 million in losses the past three years, the publisher said the paper determined it could save $9 million a year by outsourcing production. While not enough to return to profitability, he called it a significant savings that would allow management to reduce losses while working to increase revenues and cut costs in other areas.
According to Vezza, the unions were asked to match the outsourcing savings, but he said, “The unions have not bargained in good faith. They have delayed and delayed negotiating with us.”
Representatives of Local 1100 were seen in The Star-Ledger’s Newark headquarters two weeks ago for a meeting with Vezza.
In response to Vezza’s letter, Shown said it was “the company itself that reflects a lack of meaningful negotiation.” The union leader also challenged the paper’s losses.
“Our unions have done exhaustive studies of advertising revenues,” he said. “The disparity between the company’s numbers and our findings is compelling, to say the least. The company will not contest our figures, but still demands $9 million in cuts.”
Vezza, meanwhile, said the newspaper’s non-union workers have already seen deep cuts, through a series of buyouts, pay cuts and the paper’s first layoff of full-time employees in January. Those cuts cost the jobs of 34 employees — including 10 percent of its newsroom — and were blamed on continuing financial pressures and the lingering effects of Hurricane Sandy. Today, there are about 170 employees working out of the main newsroom.
The Star-Ledger’s newsroom is not unionized.
In an industry experiencing a steady decline in readership and dramatic declines in ad revenues, newspapers across the country have been hard hit by the digital age.
Craig A. Huber, an independent media analyst, said many large public newspaper companies have had to reduce their work forces by 30 percent to 42 percent since 2006.
“Newspapers have had no choice if they wanted to survive,” he said.
At the same time, he said the threat of closure, “certainly won’t be helpful to newspaper advertising.”
Vezza conceded there could be fallout with advertisers.
“I don’t anticipate it’s going to be significant. Advertisers need to advertise during the holiday season and we’re going to keep publishing through the fall,” he said.
Still, he said the warning that The Star-Ledger would close was not a ploy.
“This is reality,” he said. “We cannot afford to keep operating the paper like this.”
Such blunt threats are not an uncommon in the newspaper business these days, said Jim Bettinger, director of the John S. Knight journalism fellowship program at Stanford University.
At the San Francisco Chronicle, Hearst Corp. nailed down major concessions from the union representing editorial and commercial workers after it threatened to sell or close the paper.
And the New York Times — which owns the Boston Globe — threatened to shut down the paper in 2009 in a dispute with unions over $20 million in cuts.
Bettinger said the owners of The Star-Ledger appear to be escalating their pressure on the unions.
“It’s unsettling to the community, unsettling to advertisers and to the people who work there. But it’s emblematic of the stark economic realities that The Star-Ledger faces.”
The Star-Ledger has average daily and Sunday circulation greater than the next three papers in New Jersey combined. In its most recent report, the newspaper had paid and verified daily circulation of 340,778. More than 160,000 of that total was digital circulation. On Sundays, it is 432,040, with more than 140,000 on the digital side.
The Star-Ledger and three other daily newspapers in New Jersey are owned by Advance Publications. Most of Advance’s papers in other states — including Michigan, Alabama, Louisiana and Oregon — have either announced or undergone dramatic transformations. That has included reducing frequency of printing and home delivery, wide-spread layoffs and reorganizations and the creation of new digital-centric companies.
Advance Publications, owned by the Newhouse family, is privately held and does not publicly disclose earnings.
Below is the full text of Vezza's letter, which was addressed to "Star-Ledger Staff" and distributed this morning:
I want to inform you of an important development in our negotiations with our production unions. Today by letter, we notified the four unions involved in our production and packaging that we must have an agreement with them by September 27th or we plan to cease publishing The Star-Ledger at the end of the year. Despite the current state of negotiations, we are optimistic that the production unions will understand it is in everyone's best interest - the community, the newspaper's employees and the unions — to successfully come to an agreement.
Obviously, this announcement is serious, and I want to give you some background on how and why we've arrived at this point.
The Star-Ledger has lost a significant amount of money in the past several years. In 2011, the paper lost $12 million. Last year, the paper sustained $19.8 million in losses. The company anticipates it will lose the same amount in 2013 as it did in 2012.
Knowing that our union contracts would expire this July, late last year The Star-Ledger began to explore ways to reduce its production costs, including the possibility of outsourcing its production and packaging to another company. After receiving a number of bids, we determined that we could save $9 million through outsourcing, not enough to restore us to profitability, but enough to significantly reduce our losses while we worked to increase revenue and reduce costs in other areas.
In December, we asked the unions to begin negotiations with us and offered them an opportunity to approximate the $9 million savings we could obtain through outsourcing. If the unions provide savings to approximate the savings that could be obtained through outsourcing, this would allow us to continue to print and package in-house, preserving both union and non-union production jobs here at The Star-Ledger – otherwise, we intend to outsource to obtain the savings. In the six months since we contacted them, the unions have granted us only two general meetings, where we met with representatives of all the unions, and two individual meetings with each of three unions where we attempted to make some headway. Regrettably, it is apparent that the unions have little or no interest in meaningful negotiations. Frankly, we feel we have been pushed into a corner.
We are hopeful that today's letter to the unions will give these negotiations the attention and urgency they require.
I know today's news is unsettling, but we are hopeful that we can now forge ahead and come to an agreement. The Star-Ledger is simply too important to everyone, including non-union and union employees.
Lastly, I want to acknowledge all the sacrifices our non-represented employees have made over the past five years. We have reduced wages and benefits, have had unpaid furloughs, a wage freeze, buyouts and layoffs, all in an effort to reduce our losses and keep The Star-Ledger publishing.
Over the next couple of weeks I will be meeting with groups of employees to discuss the status of negotiations and answer any questions you might have.
The paper said it lost $19.8 million last year and expects the same this year.
“We cannot keep operating the newspaper with these losses,” publisher Richard Vezza said.
The Star-Ledger, which has won three Pulitzer Prizes and several national journalism awards, is New Jersey’s largest daily newspaper.
Vezza said he remained hopeful an agreement would be reached, but set a deadline of Sept. 27 for the concessions or an agreement by the unions that clears the paper to outsource production to another company. Without either by then, he said The Star-Ledger will cease publication Dec. 31.
Ed Shown, president of the Council of Star-Ledger Unions and GCC Local 8-N — the union that prints the newspaper — called the publisher’s threat “another sad and pathetic attempt to pound all of our union brothers and sisters into a state of submission.”
He said The Star-Ledger has demanded 55 percent of their entire wage package.
Shown said more than 300 people work as drivers, pressmen, warehouse and inventory employees at the paper, many New Jersey residents.
“All of our unions are more than willing to negotiate a fair contract and do whatever we have to so that The Star-Ledger may remain a thriving newspaper in these challenging economic times,” he said.
This is not the first time The Star-Ledger’s owners have threatened to close the paper if demands were not met. In July of 2008, then-publisher George Arwady claimed the paper was on “life support.” Two months later, the paper announced new deals with its drivers and mailers unions, and more than 200 buyouts from its non-union employees.
Word of the current situation came in a letter from Vezza this morning, noting the newspaper began talking with its unions in December. Its labor contracts expire in July.
Laying out an estimated $51.6 million in losses the past three years, the publisher said the paper determined it could save $9 million a year by outsourcing production. While not enough to return to profitability, he called it a significant savings that would allow management to reduce losses while working to increase revenues and cut costs in other areas.
According to Vezza, the unions were asked to match the outsourcing savings, but he said, “The unions have not bargained in good faith. They have delayed and delayed negotiating with us.”
Representatives of Local 1100 were seen in The Star-Ledger’s Newark headquarters two weeks ago for a meeting with Vezza.
In response to Vezza’s letter, Shown said it was “the company itself that reflects a lack of meaningful negotiation.” The union leader also challenged the paper’s losses.
“Our unions have done exhaustive studies of advertising revenues,” he said. “The disparity between the company’s numbers and our findings is compelling, to say the least. The company will not contest our figures, but still demands $9 million in cuts.”
Vezza, meanwhile, said the newspaper’s non-union workers have already seen deep cuts, through a series of buyouts, pay cuts and the paper’s first layoff of full-time employees in January. Those cuts cost the jobs of 34 employees — including 10 percent of its newsroom — and were blamed on continuing financial pressures and the lingering effects of Hurricane Sandy. Today, there are about 170 employees working out of the main newsroom.
The Star-Ledger’s newsroom is not unionized.
In an industry experiencing a steady decline in readership and dramatic declines in ad revenues, newspapers across the country have been hard hit by the digital age.
Craig A. Huber, an independent media analyst, said many large public newspaper companies have had to reduce their work forces by 30 percent to 42 percent since 2006.
“Newspapers have had no choice if they wanted to survive,” he said.
At the same time, he said the threat of closure, “certainly won’t be helpful to newspaper advertising.”
Vezza conceded there could be fallout with advertisers.
“I don’t anticipate it’s going to be significant. Advertisers need to advertise during the holiday season and we’re going to keep publishing through the fall,” he said.
Still, he said the warning that The Star-Ledger would close was not a ploy.
“This is reality,” he said. “We cannot afford to keep operating the paper like this.”
Such blunt threats are not an uncommon in the newspaper business these days, said Jim Bettinger, director of the John S. Knight journalism fellowship program at Stanford University.
At the San Francisco Chronicle, Hearst Corp. nailed down major concessions from the union representing editorial and commercial workers after it threatened to sell or close the paper.
And the New York Times — which owns the Boston Globe — threatened to shut down the paper in 2009 in a dispute with unions over $20 million in cuts.
Bettinger said the owners of The Star-Ledger appear to be escalating their pressure on the unions.
“It’s unsettling to the community, unsettling to advertisers and to the people who work there. But it’s emblematic of the stark economic realities that The Star-Ledger faces.”
The Star-Ledger has average daily and Sunday circulation greater than the next three papers in New Jersey combined. In its most recent report, the newspaper had paid and verified daily circulation of 340,778. More than 160,000 of that total was digital circulation. On Sundays, it is 432,040, with more than 140,000 on the digital side.
The Star-Ledger and three other daily newspapers in New Jersey are owned by Advance Publications. Most of Advance’s papers in other states — including Michigan, Alabama, Louisiana and Oregon — have either announced or undergone dramatic transformations. That has included reducing frequency of printing and home delivery, wide-spread layoffs and reorganizations and the creation of new digital-centric companies.
Advance Publications, owned by the Newhouse family, is privately held and does not publicly disclose earnings.
Below is the full text of Vezza's letter, which was addressed to "Star-Ledger Staff" and distributed this morning:
I want to inform you of an important development in our negotiations with our production unions. Today by letter, we notified the four unions involved in our production and packaging that we must have an agreement with them by September 27th or we plan to cease publishing The Star-Ledger at the end of the year. Despite the current state of negotiations, we are optimistic that the production unions will understand it is in everyone's best interest - the community, the newspaper's employees and the unions — to successfully come to an agreement.
Obviously, this announcement is serious, and I want to give you some background on how and why we've arrived at this point.
The Star-Ledger has lost a significant amount of money in the past several years. In 2011, the paper lost $12 million. Last year, the paper sustained $19.8 million in losses. The company anticipates it will lose the same amount in 2013 as it did in 2012.
Knowing that our union contracts would expire this July, late last year The Star-Ledger began to explore ways to reduce its production costs, including the possibility of outsourcing its production and packaging to another company. After receiving a number of bids, we determined that we could save $9 million through outsourcing, not enough to restore us to profitability, but enough to significantly reduce our losses while we worked to increase revenue and reduce costs in other areas.
In December, we asked the unions to begin negotiations with us and offered them an opportunity to approximate the $9 million savings we could obtain through outsourcing. If the unions provide savings to approximate the savings that could be obtained through outsourcing, this would allow us to continue to print and package in-house, preserving both union and non-union production jobs here at The Star-Ledger – otherwise, we intend to outsource to obtain the savings. In the six months since we contacted them, the unions have granted us only two general meetings, where we met with representatives of all the unions, and two individual meetings with each of three unions where we attempted to make some headway. Regrettably, it is apparent that the unions have little or no interest in meaningful negotiations. Frankly, we feel we have been pushed into a corner.
We are hopeful that today's letter to the unions will give these negotiations the attention and urgency they require.
I know today's news is unsettling, but we are hopeful that we can now forge ahead and come to an agreement. The Star-Ledger is simply too important to everyone, including non-union and union employees.
Lastly, I want to acknowledge all the sacrifices our non-represented employees have made over the past five years. We have reduced wages and benefits, have had unpaid furloughs, a wage freeze, buyouts and layoffs, all in an effort to reduce our losses and keep The Star-Ledger publishing.
Over the next couple of weeks I will be meeting with groups of employees to discuss the status of negotiations and answer any questions you might have.