More Financial Woes for MediaNews, Pay Cuts at SJ Merc

By Richard Brenneman
Wednesday January 28, 2009 - 07:27:00 PM

MediaNews, the region’s dominant newspaper publisher, Wednesday ordered all its Bay Area employees to take a mandatory unpaid week off during the next two months. 

The move followed a financial crisis at the company’s flagship Denver Post, which had to borrow $13 million from the parent company to meet its payroll last month. 

In addition, the company told employees of the San Jose Mercury News that it wants an additional major permanent pay cut as part of any new contract with the California Media Workers Guild. 

The privately held company, controlled by high-profile media magnate Dean Singleton, has held several rounds of layoffs at its Bay Area newspapers, which ring the region from San Rafael to San Jose and from Oakland to Vallejo. 

According to the Rocky Mountain News, the Denver Post had to borrow to cover its newsroom payroll, an act the News owners claim violated a joint operating agreement governing operations of the two papers. 

The News, owned by the Scripps chain, may close its doors unless it is able to find a buyer in the next few weeks.  

Singleton gained control over the two cornerstones of this Bay Area empire, the Mercury News and the Contra Costa Times, when he bought them from the Sacramento-based McClatchy chain, which in turn had bought them in a buyout of the old Knight Ridder chain. 

McClatchy’s sale of the two Bay Area papers wasn’t enough to save the chain from major financial woes, since McClatchy had bought Knight Ridder just as the American newspaper business was entering an economic collapse that was to foreshadow the larger collapse ignited by the bursting of the mortgage industry bubble. 

McClatchy stock, which traded for $74.16 a share four years ago, was selling for 85 cents a share Wednesday afternoon. The company informed the SEC that its April 1 dividend would be the last to shareholders “for the foreseeable future.” 

McClatchy has managed to hold onto more workers than Singleton, and held its first round of layoffs last year, reducing its staffs by 20 percent. 

By comparison, at least one Singleton paper in his Bay Area News Group-East Bay has reduced its newsroom by nearly 60 percent during a series of ongoing layoffs. 

Many of the editing jobs have been consolidated outside local newsrooms, with stories now being edited by journalists who may not be familiar with the local communities. 

For the San Jose bargaining unit, Singleton’s negotiators told representatives of the California Media Workers Guild that they want a pay cut as part of any new contract. 

Under the proposal now on the table, according to a union e-mail to staff, “The salary of veteran reporters, editors and advertising sales people earning the current scale of $1,279.51 a week would find their pay cut $383.86 every paycheck, issued every other week. The scale for experienced copy clerks, now at $598.53 a week, would be reduced $179.56 per pay check.” 

The one bit of good news for BANG-EB reporters came in a union announcement that no additional layoffs are planned for the near future. 



David Rounds, BANG-EB president and publisher, announced the mandatory unpaid leave in a package of documents e-mailed to employees. 

“In a further effort to help offset the continuing decline in revenue and position the company for future financial success while mitigating further job losses, I am announcing the implementation of a mandatory one week furlough,” he wrote. 

Rounds said all along executives and managers would be included, and that “from what I am hearing across our company ... ‘a brief period without pay is better than many more layoffs” (ellipsis in the original). 

The executive told employees “I am hopeful that an unpaid furlough will go a long way toward keeping further layoffs, if any, to a minimum.”