Friday, December 28, 2007

Zell gets winner's prize, of sorts

In "CEOs: The Winners and Losers of 2007", Fox/Business awards Sam Zell a winner's prize for the Tribune deal in which he "agreed to invest $315 million, while the bulk of the company’s debt is taken on by Tribune’s employee stock ownership plan."

The prize? "The services of a top-flight labor lawyer."

We're betting he has not one, but a team of them. Makes sense.

We do.

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In Hartford, banner announcements

"You own this place" say banners hanging around the Hartford Courant. Columnist Jim Shea writes:

Some employees are taking this ownership thing more seriously than others. I'm taking it seriously.
He's taking notes, looking for a private office and taking note of the dead wood with nice offices. Pretty funny column offers opportunity to comment on likely upcoming change...
One change that would be welcome is if people stopped saying we are going to do more with less. The only thing you can do with less is less. It's a math thing. You could run the numbers.
But he's optimistic, he says. So are others we've talked with in recent days. But like Jim, they don't have "stupid stamped on [their] forehead[s]", either.

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Sunday, December 23, 2007

Zell's daring purchase

Tim Rutten, long-time Los Angeles Times journalist, concludes in his last 'Regarding Media' column that the sale that "transformed the Tribune Co. from a publicly traded corporation into a private, nonprofit organization owned by its employees, but run by billionaire investor Sam Zell, brought a disastrous journalistic experiment to an ignominious close", and —

The era of corporate accumulation has been an unmitigated disaster for American journalism. Money has flowed like a fiscal Mississippi into the pockets of investors and fund managers, draining one newspaper and TV station after another of the resources necessary to serve their communities' common good. Nearly every American newspaper and local television station sucked into one of the chains -- from the largest to the smallest -- during that period is today a lesser journalistic entity of less real service to its audience than when it was acquired.

That's what makes Sam Zell's daring purchase of Tribune not only a great financial opportunity but also a historic opportunity for American journalism -- a chance to demonstrate that private ownership can reestablish the link between good business and good journalism that initially was forged by familial proprietors.
Tribune employees have been forced to assume a huge risk — after all, they weren't actually invited to be owners, right? — but now, perhaps with Zell at the helm, The Deal may prove to be "a great [long-term] financial opportunity" for the employees who have invested their dedication, time and talent.

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You own Tribune now

You and Sam Zell.

"I've always said that what this company needs is an owner," Zell said Thursday. But Zell, the self-proclaimed "new sheriff in town", the CEO that refers to himself as the new owner, didn't have to answer even one question about the ESOP at his news conference in Tribune Tower Thursday. "Zell should be mighty grateful that no journalist brought up the inconvenient truth that this ESOP is structured [in such a way] that employees will have almost no "ownership" voice for a long, long time", wrote E&P in a commentary "Why Sam Zell Avoids the 'Big Lies' of New Owners" posted late Friday night.

The ESOP worries a whole lot of folks. In place of company contributions to a 401(k), employees now have equity in a company saddled with $13 billion in debt. But Zell dismisses nay-sayers and pessimists. "The bottom line is that this company has significant cash flow cushion going forward," Zell said. "We do not expect that we will have any problems servicing our debt in the near future." From LAT

Over the next 10 years, he said, if all Tribune accomplishes is to pay off its loans, he and the employees would be free-and-clear owners of an enterprise worth billions of dollars.
Indeed, hopes are higher these days. Zell brings promise of a "brand new day" given his long history of business brilliance and strategic successes. "If you look at my track record, I haven't spent much time disassembling anything," Zell said in an interview Wednesday, "and I've spent my entire career building things."

Despite fears that he will make big cuts, Zell said Friday that Tribune will likely add to its 20,000+ employee staff in the next year. In a videotaped interview with CT and LAT reporters that was later posted on the company's Web site, Zell said "I think we'll have more employees a year from now than we do today. I'll also tell you that it's unlikely that all the deck chairs will be in the same place."

Folks are cautiously optimistic. Bill Salagnick, president of the Washington-Baltimore Newspaper Guild, which represents most employees at the Baltimore Sun, said the union has had no indication of whether there will be further cuts in staff. "I think Tribune has gone through a hard few years and some fresh approaches and fresh ideas could help us," said Salganik, a Sun business reporter. "But as a general proposition, we think that you need to have enough people here to put an attractive product in the hands of readers."

Zell promises plenty of change but announced nothing specific. Plans are to de-centralize the company that has been top-down directed, give the individual properties greater local control and hold those in charge "accountable". (An unedited video of Zell's announcement Thursday is here at

Zell set up a "Talk to Sam" link on the Tribune site. Too bad it's just for employees because we sure would like to ask him a couple of questions about the ESOP and how the other new owners can participate in the decision-making and future direction of the company. But maybe in the next few months, you'll ask him how you can exercise your new ownership voice on "Talk to Sam".

In the meantime, we'll be here.

Tribune photo by Charles Osgood

(end of post)

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Tuesday, December 18, 2007

A golden parachute worth forty million dollars (or so)

That's what Tribune's CEO Dennis FitzSimons will walk away with. From LAT

FitzSimons' [expected]resignation is not surprising, given the differences in his and Zell's management style. FitzSimons has established a highly bureaucratic and centralized management structure, and Zell is known for an entrepreneurial approach. Zell is expected to reduce corporate overhead by delegating more operational decisions to executives at individual business units.
FitzSimons had been instituting expense reductions across the company. But those actions created turmoil, especially at the newspapers. At The Times, two publishers and two editors resigned in opposition to staff and budget cuts ordered from Chicago headquarters. Similar turnover occurred at other newspapers in the chain.

No surprise. The price for working to make the Zell Deal happen.

Zell plans to change Tribune's corporate culture.

Also: Another casualty of the Tribune Co. buyout by Zell is the Tribune Entertainment division, which will soon be shuttered.

Meanwhile Tribune Co. will pay $15 million to the federal government to settle charges that its Long Island, N.Y., newspaper Newsday and New York Spanish-language paper Hoy misstated circulation in 2004. "Tribune was one of a handful of publishers to reveal erroneous circulation numbers in 2004, in a scandal that has cast doubt on the credibility of circulation figures, which are used to determine advertiser rates."

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As expected, FCC overturns cross-ownership ban

Big Corporate Media got a boost today. The 3-2 vote today along party lines overturns the 32-year-old rule prohibiting media companies from owning a newspaper and broadcast station in the same market. (Tribune already has its waivers.)

The vote came amidst enormous public pressure and warnings from 25 members of Congress. Chairman Martin has continually expressed concerns about the steady decline in revenue for newspaper companies, but declines in revenue notwithstanding, media companies are still averaging 17%-18% profits — more than any industry in the Fortune 500. From AP -

Opponents of the ban say in the past decade there has been an explosion of news outlets thanks to cable television and the Internet and that such restrictions are no longer necessary. Ban supporters say there may be additional outlets, but there has been no corresponding increase in news gatherers and producers, especially at the local level.
Tribune stock nears magic number: After hitting a one-year low of $22.78 in August, the stock hit a new one-year high of $33.40 today. It closed at $33.31.

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Friday, December 14, 2007

Did you quit smoking, Mr. Zell?

The $100 per month penalty for being a smoker starts in a couple of weeks.

Employers like Tribune ($100 monthly), Gannett ($60 monthly), Northwest Airlines and PepsiCo Inc. ($20-$50 monthly) now require employees and their dependents who use tobacco to pay a surcharge in hopes of motivating workers to quit the habit and help offset the high insurance costs for employers and their workers.

When Tribune announced its surcharge plan to employees in October, it also launched a free employee smoking cessation program: employees who enroll and complete the program get the fee waived.

Better throw away those Marlboros, Mr. Zell. What? The surcharge doesn't apply to you? Oh.

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Wednesday, December 12, 2007

Deal could be done December 20

Zell hopes it closes next Thursday. "The assets are truly extraordinary and we have a great opportunity to make a serious difference."

Bet he isn't referring to the real assets of the Company: the soon-to-be employee-owners denied voice and vote under The Deal. Could be problematic under Section 310-D of the Communications Act, according to this. (end of post)

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Tuesday, December 11, 2007

New year, new owners

New ownership of three major news organizations — Tribune, Thomson-Reuters and Dow Jones — will "significantly impact the news and informations business" according to this commentary from The Century Foundation. It advises all three mega-companies that "the journalists who work for you, the people who produce the content your companies were founded to supply, will respond much better to inspirational and creative leadership than to intimidation and diminished resources."

Yeah, but that's not all: A voice in the workplace and the ESOP would give all those hard-working folks — you know, the ones that give Tribune its real value — a better greater of ownership and security.

In all the interviews and speeches he has given and all the profiles about him, Zell has emphasized his commitment to excellence in everything he does. But his strategy for the business so far has been cast in financial terms rather than journalistic output ... For the moment, Zell seems more focused on a business turnaround at Tribune than on a reinvention of its journalism.
The big question is whether Zell can succeed in his business goals without making sure the properties he controls—the newspapers, mainly—are preeminent in their territories. The Los Angeles Times, in particular, has been battered for the past decade by various forms of dissension at the corporate level and in its proud newsroom. The Baltimore Sun is another major trouble spot.
(end of post)

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Monday, December 10, 2007

The Lawsuit

Aside from addressing the temporary nature of the FCC waivers, Tribune's lawsuit is also a legal maneuver intended to have the court strike down the cross-ownership ban entirely. Explained here.

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Friday, December 7, 2007

More analysis, comment and speculation (some facts, too)

Here's WSJ Deal Journal's comment on the company's solvency opinion.

The stock jumped nearly 8% to close at $32, its highest price in six months, as Wall Street skeptics finally seemed to acknowledge that the deal was likely to close this year after all, and at the announced $34 price.
But Newsday reports: "Tribune's bonds are trading at distressed levels, and prices on derivatives linked to the bonds imply a more than 80 percent chance the company will default during the next five years."

Judging by the increased number of hits to this blog recently, folks are thirsty for as much info on the Zell Deal they can get. Info is important to the not-quite-yet employee-owners as the Deal moves ever-closer to completion. Staffers are worried about how the buyout will impact their jobs. Most do have a lets-wait-and-see attitude, which does not mean they don't have very real concerns about how the monstrous debt of this media giant will hit their pockets.

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Thursday, December 6, 2007

Temporary waivers granted, Tribune sues FCC * **

*Updated: The company filed suit in the D.C. Court of Appeals Wednesday over the FCC's decision to grant temporary waivers for the company's newspaper-broadcast cross-ownerships in Los Angeles, Chicago, New York, Hartford and Orlando. Why would the company sue a commission that just saved its buyout deal? Because it still gets the waiver whether it sues or not, but it wanted permanent waivers. So if it wins, the newspaper-broadcast cross-ownership ban could get thrown out altogether. Broadcasting&, E&P

Shares jumped, closing at $32.00

** Correction: The waivers are temporary for Los Angeles, New York, Hartford and Miami-Ft. Lauderdale. A permanent waiver was granted for Chicago.
(end of post)

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Tribune to put up $500M cash to move takeover along

It will use cash on hand to reduce the bridge loan it took to buy out public shareholders from $2.1 billion to $1.6 billion. The bridge loan was part of the 2-step process that will take the company private. CNNMoney reports that analyst Mike Simonton said "the $500 million payment eases Tribune's costs, as it was made on a debt slice with hefty interst costs" and "the payment may also help Tribune clear financial tests laid out in its credit agreements."

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Friday, November 30, 2007

Waivers granted

The commission voted 3-2 to grant cross-ownership waivers and the transfer of Tribune's broadcasting licenses. The waivers will last for two years or six months after any legal challenge to either the granting of the waivers or to proposed changes to the FCC's wider media ownership rules. and LAObserved Tribune shares closed today at $31.04.
(end of post)

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Thursday, November 29, 2007

FCC votes tomorrow, but more hurdles ahead

The commission will vote on the proposal tomorrow which if approved, will preserve Tribune's hold on its TV stations and newspapers in Los Angeles, Chicago, New York, Orlando, Baltimore and Hartford and allow it to move forward with its plan to go private. (According to, the Orlando and Baltimore papers could be unloaded in asset sales next year if the New Tribune needs cash.)

But Tribune must pass two other hurdles: it needs a solvency opinion from an outside financial expert and has to show that its debt load after the sale is not more than nine times the cash flow in the 4 fiscal quarters before the closing.

And then there's the interest rate on the loans that will need to be worked out.

Bets are the deal will go through. But at what price to the workers? What will be the impact on the thousands of employee-owners — their work and their pocketbooks — when the New Tribune tightens its financial belt to meet its new $13 billion debt payments?

BTW: Shares closed up at $30.99.

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Wednesday, November 28, 2007

FCC delivers

Two-year exemption for Tribune should clear the way for the Zell Deal to be completed on time.

FCC Chairman Kevin J. Martin has proposed to deny Tribune's request for open-ended waivers from the commission's so-called cross-ownership rule, which normally would give the company six months to divest its media properties to come into compliance. But Martin has proposed to give Tribune a two-year waiver from any divestiture.

The waiver would give the commission time to vote on Martin's broader proposal to eliminate the so-called cross-ownership ban in the nation's top 20 markets. Under that plan, Tribune would be free to operate its newspapers and TV stations in Los Angeles, New York, South Florida, and most likely Chicago, but would have to divest either its paper or two TV stations in Hartford, Conn. The waiver would apparently allow Tribune to keep the Hartford properties for two years. LAT
FitzSimons said in a press release: "We are pleased with Chairman Martin's proposal which, if approved, will enable Tribune's going private transaction to close by the end of the year. This will allow Tribune's local media outlets to continue their commitment to outstanding journalism and service to our readers, viewers, listeners and advertisers."

Investors responded: Shares closed up 10.09% at $30.00

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Source: Zell Deal could get FCC waivers this week *

CT's Michael Oneal reports that according to a source at the FCC, Chairman Martin circulated a proposal among the 4 other commissioners addressing Zell and Tribune's request for temporary waivers. Though the particulars of the proposal aren't known, if the language is close to what Tribune asked for and the commissioners approve it by Friday, Tribune's Zell Deal will have the time to close by the end of the year.

* Update: According to people familiar with the proposal, Tribune Co. will be exempted for six months from rules prohibiting ownership of newspaper and TV stations in the same market. But .... LAT

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Tuesday, November 27, 2007

Tribune's October revenues down 9.3% *

Publishing revenues fell 7.9% in the year-ago month. Advertising revenues continue to slide, dropping 7.8% for the month, with the worst performance coming from classified advertising, which fell by 19.2%.

Shares in the company fell $1.23, or 4.3 percent, to $27.37 Tuesday.

More at Chicago Tribune,

*Update: Did Tuesday's cancelled FCC meeting spook investors too?
(end of post)

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Monday, November 26, 2007

HC columnist: I pray they sell us *

* Corrected
Susan Campbell weighs in on FCC chairman Martin's proposal to lift the ban on media company cross-ownership in larger markets but continue the restrictions in not-so large markets like Hartford which would force Tribune to sell either the Hartford Courant or the 2 local TV stations.

With respect to my fellow corporate-trough diners in TV, I pray they sell us. I'm spending the holiday thankful I have a job, and I'm praying that very soon I am holding down that same job but answering to someone else. I hold out hope that local ownership is a big part of the answer to the malaise that affects American newspapers. I am thankful that I work for a corporation that gave me a good dental plan, but I am willing to trade my teeth for a (local) owner who gets it.
Susan thinks Courant employees should buy the paper.

That's not a far-fetched idea. The Newspaper Guild and its advisers Duff & Phelps and Ownership Associates can identify buyers who would consider sharing ownership with employees.

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Cost-cut fallout: Unhappy readers in Hartford, Orlando

When Tribune's Orlando Sentinel killed it's TV Time for non-subscriber sales, readers weren't happy. One reader bought 3 Sunday papers at 3 different locations before he determined the TV listing section had been omitted deliberately. The reader complained, "You did not have any notice whatsoever for people. . . . You left [us] in the dark. You treated [us] unfairly."

At the Hartford Courant, readers want more from their paper and are unhappy with Page One ads, shrinking comics, smaller crossword puzzle squares and numerous copy editing errors and typos created by "the introduction of a new production system" that "has challenged some of the best Courant copy editors", according to the HC's readers representative.

These days because newspapers are businesses desperate to find a new business model that will save them, they must find cost efficiencies wherever they can. But reader expectation of quality should not be underestimated or ignored.

Stripping a newspaper of reliable, quality content readers want will guarantee continued declines in circulation. (end of post)

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Saturday, November 24, 2007

Message to Big Media: Share!

Newspaper Guild/CWA members were among thousands of unionized actors, musicians, drivers, nurses, dock workers, broadcast technicians, production workers, farm workers and service providers who joined the striking film and TV writers (Writers Guild of America/West) in a rally last Tuesday on Hollywood Boulevard. More than 10,000 writers are standing up to corporate power in their demand to preserve decent working standards and for a fair share of the hefty profits generated by the media companies from their creative work.

The industry is shifting toward new, digital media and the writers — without whom the companies have nothing — should be paid for their work when it is broadcast, streamlined or downloaded over the Internet. From a WGA fact sheet:

"What the media conglomerates are proposing is that there will be no Writers Guild jurisdiction over nearly all writing originally for the Internet, though nearly all writing will likely be transmitted this way. If we agreed to this proposal that could mean no more Writers' Guild, no more health and pension benefits, and no ability to make a fair salary. Writers want a tiny slice (2.5%) of the revenues that big Media earns when their shows or movies run on the Internet."
Alone, a working person — a writer, an actor, a journalist, a musican — can not compete with the squeeze for megaprofits Big Media doesn't want to share. Unions are necessary — and effective — in the fight fair a fair deal.

And in the fight for a fair share.

Mark your calendar: The International Affiliation of Writers Guilds, which represents 21,000 screenwriters in guilds worldwide, has set Nov. 28 as an international day of solidarity to show support for the WGA strike.

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Monday, November 19, 2007

Zell personally lobbied Martin

According to this LAT story, Zell met with Martin recently to lobby for waivers. Tribune execs want the waivers to avoid getting caught up in the media ownership controversy, one that could continue well into next year.

Most believe the Deal will be completed, but it doesn't look good for a done deal on schedule.

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Thursday, November 15, 2007

LAT's 'Altered Oceans' wins another prestigious award

The 2007 AAAs Science Journalism Awards honor excellence in science reporting for print, radio, television and online categories. Kenneth Weiss and Usha Lee McFarling's ambitious series that examined the profound disturbances that have been occurring in the ecology of the world’s oceans also won a 2007 Pulitzer Prize.

“The Altered Oceans series was an unusual undertaking for a newspaper,” Weiss said. “There was no single dramatic event like a hurricane or tsunami. No mass human deaths. Instead, we looked at the slow creep of environmental decay — the kind of changes that most people never notice.”

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Wednesday, November 14, 2007

Rumors of LAT building sale re-surface *

LA blogger and journalist Joe Scott says there's buzz among major real estate brokers that Tribune intends to sell the LAT building and the block it sits on. Will Zell sell Tribune Tower, LAT bldg?

* Tribune can't sell the a building it doesn't own. LAT publisher puts a lid on the rumor/buzz: LAObserved
(end of post)

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Two FCC commissioners ready to give Tribune waivers

From E&P:

In a joint statement, Commissioners Michael J. Copps and Jonathon S. Adelstein say FCC Kevin Martin is using the Tribune deal to rush passage of the changes to the newspaper/broadcast cross-ownership rules he proposed on Tuesday. Copps and Adelstein have been outspoken opponents of easing or eliminating regulations prohibiting common ownership of a newspaper and broadcast property in the same market.

"We realize there is some urgency with respect to the Tribune transaction," Copps and Adelstein said. "The chairman, however, has refused to act on Tribune's waiver requests that would permit the transaction to close. Let us be clear: it is improper to hold the Tribune hostage in order to force a vote on media ownership before the end of the year. We are prepared to vote on the Tribune waiver requests within three working days after the Chairman circulates a draft decision. There is simply no excuse for using Tribune as a human shield."
(end of post)

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Tuesday, November 13, 2007

FitzSimons speaks

In a memo to employees, Tribune's CEO said the cross-ownership rules change in just the big markets doesn't go far enough and the company will "seek an expansion of the cross-ownership relief beyond that contained in Chairman Martin's proposal."

"The Chairman previously said that he expected the commission to act on our application within 180 days -- we're now beyond that timeframe," FitzSimons wrote. "The content of today's proposed rule change and Chairman Martin's aggressive timetable for voting on it are likely to face challenges in the weeks ahead and there will be a great deal of speculation in the media about its impact. In addition, the proposal as currently written is likely to need further clarification. Until that clarification, we are declining to comment publicly about the proposal."
If the Zell Deal doesn't close by year's end, financing costs for the $34 per share buyout will be higher or, give the four investment banks — JPMorgan Chase, Bank of America, Citigroup and Merrill Lynch — a basis for withdrawing the $4.2 billion commitment. (Remember those material adverse effects clauses?)

Tribune shares closed up 62¢ today at $28.53.

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Martin to propose rule change for large markets only

In a New York Times editorial today, the Commission chair makes his case for modifying the cross-ownership rule for the largest markets only. Martin wrote:

A company that owns a newspaper in one of the 20 largest cities in the country should be permitted to purchase a broadcast TV or radio station in the same market.
The ban on newspapers owning a broadcast station in their local markets may end up hurting the quality of news and the commitment of news organizations to their local communities. Newspapers in financial difficulty often have little choice but to scale back news gathering to cut costs. Allowing cross-ownership may help to forestall the erosion in local news coverage by enabling companies that own both newspapers and broadcast stations to share some costs.
Martin told journalists on a conference call Tuesday morning that he hoped the modest reform he was proposing would address the concerns of critics opposed to any change.

An open letter to Kevin Martin: People understand threat of big media; so should FCC chairman.

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Monday, November 12, 2007

Congress: FCC's Martin moving too fast to scrap rules

Martin has deployed the Tribune deal as a kind of political hostage in his confrontation with Congress, making for a situation that seems strange to outside observers: the FCC is threatening a deal it actually supports, to force through rule revisions that would limit its own power. MediaDailyNews

Some senators are threatening legislation that would force Martin to wait at least 6 months before holding the vote Martin has scheduled for Dec. 18.

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Tuesday, November 6, 2007

Zell's comments raise speculation in Allentown

Folks in Allentown have no doubt followed published reports for months now about the Tribune sale, the Zell Deal, ESOPs and undefined material adverse effects clauses, but comments published in The New Yorker must have really captured their interest. Zell was quoted as saying: "I've had offers on every single asset in the portfolio. Chuck Schumer calls me, because he's hustling for some people who want to buy Newsday. Baltimore people are calling, Allentown's calling, Florida's calling, and, in L.A., David Geffen and Eli Broad."

Tribune said in March that it had no plans to sell The Call, though it had 2 Connecticut papers on the block as part of a corporate restructuring plan. Under the Zell Deal, there's a big tax incentive to keep the company intact for 10 years.

''Sam Zell is not known for selling at the bottom, which is where the newspaper industry is these days,'' said John Morton, a news industry analyst in Maryland. ''I don't think selling is something Sam Zell would be interested in.''
Well, who's to say there won't be solid incentive offers attractive enough for Zell to sell off some of the papers — sooner than later — right after the Deal is done. The money people calling Zell to express interest in the papers must know there's a chance, if not a possibility, he'll sell.

Speculation from every corner will continue until the Deal is done. Zell has everyone's attention, but most especially the future employee-owners who under the multi-billion dollar deal stand to gain big but lose bigger if the company fails.

Zell's track record as a moneymaker is impressive. He doesn't lose. But in this, the most leveraged deal ever, the employees carry the greatest risk. So how come he's getting all the ink and not them?

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Monday, November 5, 2007

Former LAT editor says Zell favored over Tribune guys*

Perhaps Sam Zell is not an ideal newspaper owner, but "If you took a vote in the L.A. Times newsroom today, they would vote Zell in and the Tribune guys out. They’re hoping and praying the deal will go through,” Dean Baquet told Connie Bruck for The New Yorker profile that sheds more light on Zell's business practices (he would be “chairman of everything, C.E.O. of nothing”), his personality and politics ("I'm an economic conservative and a social liberal").

If the Deal gets done – and there's a whole lot of folks with fingers crossed that it does — will Zell sell off some of the papers?

“I’ve had offers on every single asset in the portfolio. Chuck Schumer”—the New York senator—“calls me, because he’s hustling for some people who want to buy Newsday. Baltimore people are calling, Allentown’s calling, Florida’s calling, and, in L.A., David Geffen and Eli Broad. So all I can tell you is that for a dead industry with no future there are an awful lot of schmucks who want to take it away from me!”
* LAObserved breaks out other important stuff
Bloomberg News Photo (end of post)

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Sunday, October 28, 2007

Catching up here

There's a lot of things going on and we're trying to filter some of the info we're getting. Info relevant to this blog seem to rehash news we've posted, linked or commented on, but here's a couple of catch-up items:

-- Tribune's sale of Stamford Advocate and Greenwich Time in Connecticut to MediaNews Group will include recognition of union contracts but all employees will be required to re-apply for their jobs. MediaNews also said it will eliminate by years' end the print and packaging departments which will leave 55 workers without jobs. MN's MO is to cluster, consolidate and cut.

-- We attended the California First Amendment Coalition's Free Speech & Open Government Coalition at USC last week, mainly because former, current (and perhaps future) Guild members were among the panelists. Though the conference was the Coalition's 12th annual, it was the first we have attended. It certainly won't be the last.

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Thursday, October 25, 2007

New buyer for Stamford Advocate, Greenwich Time

Hearst Corporation will fork over $62.4 million for the 2 papers, but MediaNews Group, Inc. will manage them under an existing joint venture agreement with Hearst. Tribune is selling the real estate separately. The deal is expected to close in a few weeks.

Earlier this year, Gannett offered $73 million for the two newspapers, but the deal was derailed, supposedly because Gannett wouldn't assume the union contracts.

Will the structure of the Hearst deal still the fear of a MediaNews' unfair advantage in southwestern Connecticut?

When this deal is done, MediaNews will be running the day-to-day operations. Check out our MediaNews website at of post)

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Wednesday, October 24, 2007

Tribune 3Q Earnings Drop 7 Pct As Ad Revenue Slows, but Shares Rise As Results Beat Estimates

Despite skepticism on Wall Street, CEO Dennis FitzSimons said the transaction under which Tribune is going private remains on track to close in the fourth quarter. AP
Tribune release

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Tuesday, October 23, 2007

Caught in the grip of a fire disaster*

*New link added
Los Angeles Times print and online staff are working around the clock in challenging conditions to cover a dozen or so Southern California fires that have blackened more than 360,000 acres, burned 1000+ homes and disrupted the lives of more than 500,000 residents. Associate Editor Leo Wolinsky said the firestorm "is shaping up to be the biggest one" in his time at the paper. More from E&P

Our thoughts are with them all and hope none experience personal loss from the fire disaster.

*Image from an LAT reader submitted to the site's Reader Photos page. (end of post)

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Monday, October 22, 2007

Zell pledges to change Tribune's corporate culture ...

Just as he has with his acquisitions in other industries.

"Just by being private, the culture will change. We won't be forced to make decisions that are 90 days in relevance," Zell told a group of newspaper executives at the Inland Press Association's annual meeting in Chicago this afternoon. (The group is a newspaper trade group that represents about 1,200 papers.) He sees Tribune as a very good long-term investment and is in for the long haul with no exit strategy.

Newspaper management, in general, he said, was too complacent about the changes going on around them. "I believe there was a fellow named Nero who fiddled while Rome burned," he said.
(end of post)

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Saturday, October 20, 2007

Risk master

Zell told The Wall Street Journal's Collin Levy that he's a professional risk taker, "but I'm a professional risk taker who understands all the risks he takes. A lot of people don't." ("Sam Zell: Professor Risk". Registration required.)

Zell gave Levy the interview on the condition that Levy agreed not to ask about the high-profile Tribune buyout, but writes "Mr. Zell isn't completely without exposure. Many now think that the deal will be junked or rebuilt."

Zell showed Levy his Christmas decorative music boxes and explained why he sends friends and business associates the boxes with songs "on themes ranging from politics to the world economy"— they're his "economic forecasting machines". Zell on YouTube. No kidding.

The commentary offers a bit more insight into the MO of your new boss/co-owner when (if?) the Deal is completed.

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Friday, October 19, 2007

Lunch? Hmmm, no thanks.

For a minimum bid of one hundred bucks, staffers had a chance yesterday to win lunch with the editor and publisher, proceeds to go to the United Way. The result is surprising. Or is it? LAObserved

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Tribune FCC exemptions on the line *

Martin's proposed schedule threatens Tribune's request for waivers by early November. The Zell Deal will be more expensive to Zell and Tribune if the transaction is not completed by Dec. 31. Chicago Tribune:

The merger includes a clause granting shareholders an 8 percent "ticking fee" in the event the deal isn't done by the end of this year. A delay would put Tribune on the hook to shareholders for $871,884 a day, or $318 million a year, an obligation that would make financing the deal more expensive.
* From the Los Angeles Times:
Martin has proposed an ambitious timetable for the FCC to vote on a package of media ownership rule changes by Dec. 18. Among the changes he is expected to propose is the elimination of the ban on owning a newspaper and a TV station in the same market. But some FCC commissioners, lawmakers and public interest advocates criticize the vote as coming too soon.

A Dec. 18 vote could come too late for Tribune, which has long pushed for lifting the cross-ownership ban. The company needs 20 days to complete the transaction after FCC approval.

To go private by the end of the year in a deal led by real estate mogul Sam Zell, the company needs the FCC by mid-November either to grant temporary waivers or to lift the cross-ownership ban, said Shaun Sheehan, Tribune's Washington vice president.
(end of post)

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Thursday, October 18, 2007

Analysts predict impact of FCC cross-ownership rule change may be minimal

The cross-ownership strategy is widely considered a failure as evidenced by the struggles of Tribune Company after its purchase of Times Mirror and the recent decision by Belo to isolate its newspapers from its local TV stations. "All the supposed advantages of owning a newspaper and TV station in one market haven't worked out to be as profound as once imagined," said John Morton, president of Morton Research Inc., a media consulting firm in Silver Spring, Md. WSJ

In 2003, when the FCC failed to loosen ownership rules, media companies still thought it was beneficial to merge TV and newspapers to sell combined packages of advertising in the same market. "Cross-selling of advertising has been elusive and is not widely believed in at this point," said Leland Westerfield, an analyst with BMO Capital Markets.

FCC Chairman Martin wants a vote Dec. 18.

Related: Two senators urged the FCC not to "rush forward" with rule changes USAToday

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More newsroom staff cuts happening

Media companies continue to assert that cuts to newsroom staff levels must be part of their cost-saving fix aimed at slowing their steady decline of profits.

In the past week, cuts have been announced in Detroit and San Antonio. Now there is speculation that more cuts will come at the Washington Post.

Rick Weiss, national reporter and co-chair of the Post unit of the Washington-Baltimore Newspaper Guild writes:

“I’ve certainly heard for many months now that the last round of buyouts didn’t achieve the cost savings that they hoped for, and I’ve heard more recently that the most recent economic numbers here cannot support the current staffing levels here.”
(end of post)

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Wednesday, October 17, 2007

The future of the newspaper, without the newspaper

Hal Crowther, former Buffalo News reporter, Newspaper Guild member and veteran journalist wrote a long (very long) column on what he believes are the not-so-positive forward-thinking changes happening in our industry that threaten professional journalism's survival. Interesting read, but here's what caught our attention:

The Tribune Company, the grasping conglomerate owner that strangled the Los Angeles Times, has been entertaining a buyout offer from an "angel," Chicago real estate megabillionaire Sam Zell, who's on record saying "there is no difference" between running a newspaper and managing any other for-profit business. If that isn't irony enough, Zell's nickname is "The Grave Dancer," for his ability to spot moribund properties and exploit them profitably. How I'd relish the opportunity to lecture him on the difference between owning a newspaper and owning a mall. [Former LAT editor John] Carroll argues that these corporate leviathans are "genuinely perplexed" by journalists—"people in their midst who do not feel beholden, first and foremost, to the shareholder. What makes these people tick, they wonder. The job of any employee, as they see it, is to produce a good financial result, not to indulge in some dreamy form of do-gooding at company expense. ... Our corporate superiors regard our beliefs as quaint, wasteful and increasingly tiresome." If we believe Carroll, who ought to know, nothing we ever held sacred is safe from jungle capitalism and its harsh ideology, as we might have guessed from the awful mess the free market has made of American health care. Citing Carroll and Washington Post owner Donald Graham as his star witnesses, [Russell] Baker comes to the radical conclusion [in an Aug. 16 essay] that "free-market capitalism doesn't really work very well in the newspaper business, and if rigorously applied, tends to destroy it."

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FCC head has proposal to repeal media ownership rules in December

Kevin J. Martin's plan to relax cross-ownership rules, which has the support of three of the five commission members, would be a huge win for Sam Zell, who needs FCC approval to complete his buyout of Tribune and Rupert Murdoch, who has lobbied against the current rules for years. NYT:

Mr. Martin said he was striving to reach a consensus with his fellow commissioners, both on the schedule and on the underlying rule changes, although he would not say whether he would move the measures forward if he were able to muster only three votes.

“We’ve had six hearings around the country already; we’ve done numerous studies; we’ve been collecting data for the last 18 months; and the issues have been pending for years,” Mr. Martin said in an interview. “I think it is an appropriate time to begin a discussion to complete this rule-making and complete these media ownership issues.”
If Martin rushes through to rewrite the rules and push for a vote in December, there'll be a whole lot of hollering from folks who oppose relaxing rules that will increase media consolidation.

* AP story at
(end of post)

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Another example of why outsourcing is a bad idea

Customer service representatives in Manila apparently don't speak English well enough to handle pissed off Chicago Sun-Times subscribers who aren't getting the paper delivered — and only part of it when it is.

In August Tribune took over home-delivery of the Sun-Times. The S-T figured the deal, worth millions to both papers, was a good one: it's advertisers and subscribers would get better service and at a reduced cost to the S-T. But for S-T subscribers, the deal's not working out so well. (end of post)

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Tuesday, October 16, 2007

Sun-Sentinel throws out national/foreign desk

In a sign of the times, the South Florida Sun-Sentinel will reassign its resources to focus on local coverage. Fortunately, the dozen or so affected staff will still have jobs.

Given the ease with which readers can access other countries' media online, Editor Earl Maucker said, many U.S. publications can no longer justify covering international news the way they have in the past. "We don't look for the Sun-Sentinel to be the hometown paper of Caracas, Venezuela."

"Today, we're not in control. The customers are in control," said Howard Greenberg, publisher of the South Florida Sun-Sentinel. "We have to create a new business model."

Customers? Strange. The headline says "Readers in control ..." (end of post)

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Sunday, October 14, 2007

Dow Jones union approve new contract agreement

With an overwhleming "yes" vote, the Dow Jones membership of IAPE, The Newspaper Guild-CWA, has ratified a new three-year contract with Dow Jones & Company.

As reported by the the IAPE Election Committee the "yes" votes totaled 831 while the "no" voters totaled 90: 90.23% in favor of ratification and 9.77% opposed.

From the union's bulletin: "Our commitment has to be unchanged— and unbreakable: This is your union and it exists solely to defend and promote your interests. That fight continues long after the headlines and contract rallies fade. For IAPE to be successful, you have to remain engaged and active."

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New buyer for Stamford Advocate and Greenwich Time?

Connecticut Tribune workers beware.

The company has sought a buyer for the 2 papers since it's deal with Gannett was torpedoed in March. Now Dean Singleton's MediaNews Group, looking to expand its Denver-based empire, is showing interest in 2 more papers in Connecticut. (He owns 21 newspapers in NE — 8 in CT).

But MediaNews' offer was met with a complaint filed with the state attorney general by a competitor that owns The Hour in Norwalk and weekly papers in Stamford.

Brett L. Whitton, president of The Hour Publishing Co., wrote in a letter to Attorney General Richard Blumenthal that MediaNews made an offer to buy the two newspapers from Tribune Co. Whitton said he was concerned that a sale would give an "unfair competitive advantage" to MediaNews in southwestern Connecticut.


"The purpose of this letter is to make you aware of this potential acquisition and to request you investigate whether this transaction would violate any federal or state anti-trust legislation," Whitton wrote.

Whitton said that MediaNews could put The Hour out of business and become a monopoly, leaving southwestern Connecticut with only one newspaper company for local news and advertising.

"There would be left but one daily newspaper ownership voice in Fairfield County," he wrote.
We strongly encourage workers at The Advocate and The Time to be aware of MediaNews' "clustering" strategy and the negative impact that strategy is having at the papers it snatches up. In the San Francisco Bay area, the regrouping of MediaNews papers and consolidation of numerous operations in the past year has resulted in the elimination of at least 280 jobs (another 50 ad production jobs were outsourced to India) and the dilution of the unique character of coverage at each paper.

In a recent Editor & Publisher story Rachele Kanigel, a journalism instructor at San Francisco State University and a former Tribune reporter, said "It is one big newspaper group that doesn't really serve any of its communities adequately. I am very concerned." ("A Lock on the Bay?" by Joe Strupp. October 1. Available by subscription only.)

A major component of the "clustering" strategy in California was to move work from the union papers to non-union papers, eliminate jobs and reduce union membership to minority status.

Check out The Newspaper Guild's OneBigBang for information on Singleton's MediaNews and the "clustering" situation in California — from the workers' perspective. (end of post)

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Friday, October 12, 2007

Newspaper 3Q results will show significant drop-offs in real estate advertising

Print ad revenues continue to decline as a result of the housing slump. Tribune's real estate sales slid 30.4% in August on declines in Los Angeles, Chicago and Florida. Editor&Publisher
(end of post)

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Thursday, October 11, 2007

Zell is taking a long, hard look at LAT, Newsday and Chicago Tribune

Before Zell made his Deal he had never seen a copy of Newsday. Donald Trunp sent him a copy the day after the Zell Deal was announced. From Daniel Wagner's weblog at

Speaking after a no-press-allowed speech before the Argyle Executive Forum’s 2007 CEO Leadership Forum on Manhattan’s Upper East Side Thursday, Zell said he has been giving Tribune’s papers — including Newsday, the Los Angeles Times and the Chicago Tribune — a long, hard look.
Zell said he already has in mind some of the changes he hopes to bring to the papers, though several people who attended his speech said he had described himself as a businessman who does not know anything about newspapers.
Given voice, he'll have thousands of experienced employee-owners who could advise and help him make positive changes to the papers. (end of post)

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Smoker fee, surcharge draws angry reaction from staffers * **

Editor & Publisher reported today on Tribune's plan, pointing out that Gannett and Scripps Newspapers have similar fees in place. Gannett said their fees are part of a wellness plan. Washington-Baltimore Newspaper Guild president Bill Salganick said "What strikes me is that [other] employers try to encourage healthy living, but they do it in a constructive way by developing programs for weight management and smoking cessation. But Tribune immediately went negative."

Tribune spokesman Gary Weitman said ""We pay the lion's share of medical expenses and we have a responsibility to contain those costs. We are and have been doing everything we can, it is a shared responsibility between employees and the company."

Shared responsibility? Maybe. But what about fairness? Why not give the non-smokers a price break.

* Also: Mark Lacter at LAObserved weighs in
** Read Eric Gershon at the Hartford Courant: "Spouses, Smokers Earning Penalties"

(end of post)

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Wednesday, October 10, 2007

New blogger at LAT: the publisher!

"A number" of staffers have suggested David Hiller do "a blog about things going on at The Times and in our industry." A two-way blog. Folks can post comments, but not anonymously.

No one outside The Times will be privy to the blog contents or comments. (Of course not.) "This is internal, just for us, so please don’t share the blog content outside the company." LAObserved

Well, if nothing else, Mr. Hiller will soon discover that blogging can be very time-consuming if one is to stay up on it along with the other very important duties needing attention as well.

'Course, the blog just may offer the workers the perfect opportunity to have on-going, 24/7 communication with the guy in charge! Great!

If the content stays inside, of course. (Riiiiiight.) (end of post)

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Sam Zell, self-described "professional opportunist"

Zell built his empire through a willingness to buy assets when everyone else hates them, according to someone that attended the private soiree (Beverly Hills?) where Zell explained what he does with his money. "So what else is Zell buying? He's about as contrarian as it gets. He bought real estate when it was down and out in the 1970s... and he's buying newspapers today. Many of the nation's largest newspaper publishers are down more than 50% from their highs."

Also: Zell is worth billions of dollars more than Donald Trump, is the biggest warehouse/distribution property owner in Mexico and runs a "secret investment society".

He'll make big money while you carry big debt. Ouch. (end of post)

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Trib employee wonders if other unhealthy lifestyle sins will be surcharged

Michael Mayo was "completely shocked when [he] got the letter yesterday from Tribune Company (corporate parent of the South Florida Sun-Sentinel) outlining the changes to our 2008 health plans."

“Tobacco use fee – Tribune employees who use tobacco products (or have covered dependents who do so), will pay a $100 per month fee (per family) in addition to their medical premium. Smoking cessation programs will be offered to assist those who use tobacco in leading a smoke-free lifestyle. The fee will be waived upon completion of the program.”
And another thing: "... there’s no reward for not being a smoker. If the company imposed a surcharge on smokers and then gave a proportionate break to all the non-smokers I could maybe be a little more positive about the whole thing."

The concerns and questions you raise, Michael, are similar to those of Baltimore Sun employees who, unlike you, have the right to challenge the company's new — and arguably unfair — strategy for saving money by shifting more of the cost burden to the workers.

Will the top-tier executives and publishers will also be required to pay the additional fees? (end of post)

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Tuesday, October 9, 2007

No plans to sell the LAT, unless ...

Sam Zell in Beverly Hills at a conference on corporate growth, said he has told LA gazillionares that he had no plans to sell the Times, but "... if you have a price, we can talk." So does he mean he WOULD sell the paper, but NOT to those guys? Sounds like he'd sell if the price was right. You know, maximize his profits. See post below. (end of post)

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Monday, October 8, 2007

Efforts to sell Cubs slowed to a crawl

Zell is looking to maximize profits so the team may still be a Tribune property after the Zell Deal is finalized.

The slowdown has mystified bidders, who months ago submitted applications required by Major League Baseball, but since have heard little. "It's maddening," says an adviser to one bidding group who, like most involved with the sale, requested anonymity. Offering documents won't be ready for weeks, a source familiar with Tribune's planning says.

But Tribune is in no hurry as it decides whether to sell the team, Wrigley Field and other assets in one piece or individually.

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Unions at Baltimore Sun balk at smoker, other "fees"

Tribune has joined the ranks of employers that are imposing additional fees on a segment of its workforce as a means of cutting its health care costs. It intends to charge a "fee" of $100 per month to smokers (or those who have smoker dependents) in the company health plan, and a $75 per month "fee" if a Tribune spouse has coverage available at work, but opts to to be in the Tribune plan.

Have you heard about the plan? No? Well, the unions at the Sun know because they have notification and meet-and-discuss provisions in their contracts that must be honored if and when the company seeks to make changes to union-covered employees' benefits.

The Guild, the pressmen and the mailers at the Sun have filed grievances because their contract clauses say premium share can only increase by four percentage points in any year and the "fee" is a premium that violates that clause.

Stay tuned, because the outcome of the Baltimore dispute could influence the fees charged you as well. (end of post)

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Wednesday, October 3, 2007

AASFE winners: LAT and Chicago Tribune

The 2 Tribune papers were among 10 winners of the 2006 Best Sections contest for the American Association of Sunday and Feature Editors that were announced at its conference this afternoon. The judges said the Chicago Tribune "presents a strong and consistent features package that reflects their community." About The Los Angeles Times: "There’s a definite 'wow factor' here." Read what else the judges has to say at AASFE. Props to the hard-working folks that do the great work.

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Mystery in Melville * **

Three gold Pulitzer prizes are missing from a Newsday safe and reports are that the the missing medals may have been sold for a total of $15,500 last Friday at a Long Beach, CA auction. Replicas of the coveted prizes have been on display in the newspaper's executive offices for years so no one remembers ever seeing the real medals firsthand. Odd. So they could have been stolen years ago and no one was the wiser? Very strange.

* UPDATE: Pulitzer medals thought to be Newsday's recovered
** How do you prove they're real Pulitzers? Weigh them.
(end of post)

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Tuesday, October 2, 2007

Could Belo's move spark similar moves at other newspaper companies?

* Corrected
Belo Corp. is splitting itself up, moving its current debt of $1.2B to the TV business and leaving its new newspaper company, A.H. Belo, debt-free. (The Dallas Morning News, The Riverside(CA)Press Enterprise and The Providence Journal, where the Guild represents workers.)

From Content Bridges: "It's an interesting bet and one that will be watched from several angles by the industry and its investors. ... The Belo newspaper approach stands against the soon-to-close (?) Tribune approach. That one ladles more than $10B in debt on the "new Tribune," highly leveraging it. Belo seems to understand that each dollar it puts into debt service is a dollar it can't use to keep the newspaper content and ad engines primed, until that eureka moment arrives."

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Why RedEye West won't work *

Freebie tabloids target the 20-minute public transportation commuters who may be looking for a distraction and a quick read on yesterday's news. Los Angeles commuters are different. Michael Miner at Chicago Reader asked someone who knows LA and Chicago:

"It's absurd. . . . The reason it wouldn't work in LA is the same reason a Red Eye wouldn't work in Milwaukee: with rare exceptions, 95 percent of people here commute in cars and not to fixed destinations. They'd have to give the rag away at gas stations or Starbucks. A Spanish-language edition would be necessary for these downtown office and maintenance workers who make full use of the buses in the wee hours . . ."
Also, Miner has heard the same thing we have: "... a lot of hands at the LA Times are hoping that if and when [the Zell Deal is completed,] Zell will sell their paper to somebody local, somebody who knows how LA goes to work."

* "C'mon. Get real." Native Intelligence at LAObserved.
(end of post)

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Monday, October 1, 2007

Reinvention, revitalization at LAT

Editor Jim O'Shea, left, outlined in a memo to staff today plans to implement many of the 48 recommendations made by its Reinvent Committee (comprised of newsroom staff members) to improve the Los Angeles Times. New on the horizon: reorganization of some newsroom departments; a reader's page on with a moderated blog; update online staff lists with contact info and bios (great!); shorter, better stories ("That doesn't mean we won't run long stories."); staff development opportunities, revitalize local coverage ... Read the full memo at LAObserved. (end of post)

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European journalists unions to stand up for journalism

Journalists' rights, collective agreements and quality journalism are actively promoted by the member unions of the European Federation of Journalists. The growing pressure of political interference, media consolidation, excessive commercialization of the news (sound familiar?) and failing workplace conditions and standards is creating an alarming crisis that, according to the EFJ, is negatively impacting quality journalism. Member unions are being called to "stand up" in a full day of continent-wide collective action Nov. 5 to protest the decline in quality journalism.

The EFJ is part of the International Federation of Journalists (IFJ). The Newspaper Guild-CWA is also a member of the IFJ.(end of post)

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Chicago columnist on why unions are needed

Neil Steinberg, left, of the Chicago Sun-Times and a Newspaper Guild member decided last week in the wake of the GM workers strike "that union solidarity demands something be said." From his 9/26 column:

Workers in the Third World are paid less for a reason. They are less educated, less efficient, and work under harsher conditions, churning out pollution we would never tolerate here. Their standards can be woefully inadequate, as U.S. toymakers discovered to their sorrow.

They don't have unions. We do. Years of Republican lobbying have given unions a bad name by focusing on all-too-real corruption. But we wouldn't have the standard of living that's imperiled now without them.
(end of post)

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Friday, September 28, 2007

Guild, Time Inc. agree to 3-yr contract

The Newspaper Guild of New York, representing writers, editors and photographers at Time, Sports Illustrated, People, Fortune, Fortune Small Business and Money has reached a tentative agreement for a 3-year contract that calls for annual pay increases. Complete terms are undisclosed pending ratification of the agreement by Guild members. (end of post)

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Do as we say, not as we do?

Crack open your copy of the Tribune Ethics Policy. Reporters are supposed to refrain from activities that give the appearance of a conflict. So how is it okay for Tribune Company executives to disregard the company's code of ethics and offer gifts to pols and policymakers its reporters cover?

The Cubs are offering a pair of tickets for purchase at face value to each of the pols who represent the area surrounding Wrigley Field. Steve Rhodes at The Beachwood Reporter calls the question. (end of post)

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Another ESOP tale, from a business perspective

You may feel at this point that you know everything you need to know about ESOPs, but here's another story in the news. In part:

The ESOP concept was developed in the 1950s by lawyer and investment banker Louis Kelso, who argued that the capitalist system would be stronger if all workers, not just a few stockholders, could share in owning capital-producing assets. ... The study found that ESOP companies perform better than their pre-ESOP performance would have predicted and also are more likely to remain in business. Moreover, ESOP companies have other retirement-oriented benefit plans more often than comparable non-ESOP companies.
One unnamed employee is quoted as saying "I own a piece of this company — that allows me to make it a better place to work.” He/she must have a voice in the company.(end of post)

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Free in LA

LAT may launch a free tabloid-sized, fast-read daily aimed at attracting 18-34 year-old readers and boost advertising sales. Not a new idea for Tribune: RedEye, Chicago Tribune's free daily and amNewYork (Newsday) are tabloid freebies. Reuters

Will LAT hire additional staff to produce the freebie? Or will it dump the additional work on existing staff? (end of post)

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Thursday, September 27, 2007

Zell Deal will get resistance from FCC commissioner

Michael Copps, Democratic FCC member who has previously expressed concern over three proposed media mergers including Zell's purchase of Tribune, said today he still isn't convinced the proposed deals are in the public interest.

As one of five FCC commissioners, Copps will cast a vote on whether the Sirius-XM merger and Tribune sale should be allowed to proceed. As things currently stand, there would be no vote by FCC commissioners on the News Corp. deal.

"The Tribune (sale) would be a steep climb for me, given my history of concerns over consolidation," Copps said. "I do not buy into this argument that you might be considering rules changes, ergo you can't apply the current rules to current pending applications."


Shaun Sheehan, vice president for regulatory affairs at Tribune Co., said the company was "fighting for its very survival and was dependent on the continuation of the waivers."
In the bigger scheme of things, media consolidation is a big, big Newspaper Guild concern. That said, Tribune may survive its regulatory challenge, and maybe it will eventually do okay under Zell. And maybe the employees will eventually share in future profits, risky as the ESOP is for them.

But if Tribune doesn't get the waivers, it would have to downsize itself. If the company's goal is to push "hyperlocalism" in its products, why not really go local and push localism in its properties — sell to local owners willing to buy. (end of post)

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Rate cut may favor Zell Deal

The Federal Reserve's 0.5% rate cut could be good news for the Deal's financing given the current limited credit climate. “The real question is whether the [Tribune] company’s cash flow is sufficiently affected to interfere with their being able to borrow,” Silver Spring-based media analyst John Morton said. “And the company has said they don’t anticipate that it will.”

Deal failure, however, would not upset The [Baltimore] Sun’s Newspaper Guild members, said Angie Kuhl, commercial vice chair of the union unit at the paper. Kuhl said that most members prefer local control — a possibility if Tribune divests The Sun. “It’s a big, unwieldy company — and hierarchical,” Kuhl said of Tribune. “That’s one of the frustrations of employees here.”

A busted deal also would not upset Ted Venetoulis, spokesman for a local group interested in buying The Sun. “[Now] we just have to wait for Zell to make a judgment,” he said, “and not bother him until he gets his arms around [the merger].”
(end of post)

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Wednesday, September 26, 2007

Your health, lifestyle is fair game for employers looking to cut costs

In recent years, many employers offered healthy initiatives to their employees: discounts for health clubs and WeightWatchers classes, healthy offerings in their cafeterias and snack machines, free smoking cessation classes. But these days, employers looking to cut their health care costs any way they can may fire employees who don't quit smoking, lose weight or lower their blood pressure. According to "Get healthy or get fired" in today's Baltimore Sun (Monday's Chicago Tribune), "punitive measures are gaining a foothold in the workplace, according to lawyers and groups that follow insurance and employment trends, because health-care costs are growing at high single-digit to double-digit rates annually."

Punitive measures short of discharge may include, for example, charging employees monthly or yearly fees if they smoke. Today's huge health-care costs burden most employees. (Some just can't afford to pay for coverage.) An increase in his/her cost of the health care premium is bad news enough, but then add fees on top of that for activity outside the workplace that the employer decides is unhealthy?? Whoa!

The question for employees is: How far will these requirements on personal habits and penalties go, and what sort of criteria will employers use to define good health?
Damn good question. Guild members have the right to not only ask those questions, but the right to request a meeting to discuss the potential legal slippery slope that would allow an employer to implement medical and behavioral dictates that reach outside the workplace, the impact such dictates and fees could have on its members and alternatives to the implementation of such fees that may satisfy both side's concerns. (end of post)

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Is that your kid? Prove it.

Tribune has succeeded in irritating and insulting its LAT staffers, according to memos sent to fishbowlLA and LAObserved.

Employees are being required by Tribune, via consultant Mercer, to provide documented proof – no later than October 5 – that dependents claimed under the LAT medical benefits plan are in fact really, legally dependents — or poof! no coverage for spouse and kids after that date.

In an email exchange with management about the paperwork fiasco and the resulting panic the requirement has caused, a staffer wrote:

Making honest people fear losing their health insurance -- which polls show is a major anxiety throughout the population -- is inexcusable. It is no "assurance" to be told that Tribune will make contact before yanking your spouse and kids off their insurance. You have a moral responsibility to proactively inform each employee when their dependents have been verified to the company's satisfaction so they don't have to keep worrying.

In addition, Tribune owes an apology to every employee who received one of these threatening letters after they had already provided the paperwork. It may not meet the legal definition of workplace harassment, but the bullying approach of this audit is an affront to everyone who works hard at the Times and the other Tribune properties.
As unionized employees, YOU would have the right to be proactive on an issue like this, rather than finding yourselves in the reactive position you have found yourself in. Tribune has the right to introduce plans that will save costs. However, as a union you would have the right to have your representative meet with the company in advance to discuss for example, the current documentation requirements plan and give voice to questions and concerns on process that could eliminate similar confusion, outrage and panic that this mismanaged situation has apparently created.

The above quoted writer, to his coworkers:
Given the time, trouble and insult this exercise has put all of us through, I would also like to know how many ghost dependents this audit and the previous one end up discovering here at the Times, and whether the savings Tribune-wide are greater than the consulting fees Tribune is paying Mercer. Since Tribune's corporate values include Employee Involvement and Teamwork, such an action would be perfectly consistent with this audit's respectful skepticism of our integrity (which, when capitalized, is also a Tribune value).
Indeed! So, how's things in YOUR workplace? (end of post)

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Tuesday, September 25, 2007

LAT reporter's legacy to be honored

Ruben Salazar, a reporter for the Los Angeles Times who was killed Aug. 29, 1970 during a riot he was covering in East Los Angeles, will be honored with a USPS commemorative stamp (left) for "giving voice to those who didn't have one". Staff writer Louis Sahagun wrote in today's Los Angeles Times:

In honor of trailblazing newsman Ruben Salazar's relentless efforts to chronicle the complexity of race relations in Los Angeles, the U.S. Postal Service in 2008 will issue a commemorative stamp of the former Los Angeles Times reporter and columnist.

"He was a groundbreaker for Latinos in this country, but his work spoke to all Americans," Postmaster Gen. John E. Potter said Monday. "By giving voice to those who didn't have one, Ruben Salazar worked to improve life for everybody. His reporting of the Latino experience in this country set a standard that's rarely met even today."

... [snip, snip] ....

Inspired by Salazar's legacy, [Frank] Sotomayor [associate director of USC Annenberg's Institute for Justice and Journalism] and the dozen Latino journalists working in Los Angeles at the time formed a professional organization, the California Chicano News Media Assn., to encourage other ethnic minorities to pursue careers in journalism. Over the years, the group, which has since changed it name to CCNMA Latino Journalists of California, has awarded nearly $700,000 in scholarships to 680 students and sponsored 29 journalism opportunity conferences.
(end of post)

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California Interpreters still out

Check out the CFI website for updates on the strike. CFI represents the largest corps of highly skilled professional interpreters in the nation working for one county, and has served as a role model for court interpreter organizations throughout the U.S. (Issues)
Donations to their strike fund can be sent to NCMWU, 433 Natoma St. 3rd Floor, San Francisco, CA 94103. Payable to Northern CA Media Workers, Local 39521. In the memo field: CFI Strike Relief Fund (end of post)

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Stock analyst thinks Zell will find "that 34 bucks"

Here's what Jim Cramer had to say about Tribune Monday evening on his "Mad Money" TV show on CNBC: "I think Sam Zell's gonna find that 34 bucks. I think he's gonna do it, because he is a man of his word. Because of that, if I were an arbitrageur, I would be in the stock. But I don't recommend that, so that's why I've been saying sell it if you're an employee."

Do you still hold Tribune stock??? (end of post)

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Monday, September 24, 2007

For newspapers, transition from print to online a huge, but not impossible, hurdle

More than ten years after the Internet began stealing ad dollars and eyeballs away from the daily newspapers, newspaper-publishing companies still struggle to figure out a business model that works in the new media landscape.

John C. Dvorak offered his commentary on the jam newspaper publishers are in. MarketWatch. "As more newspapers make the mistake of eliminating reporting jobs, they fall into the pit of redundancy with nothing special to offer. There are no foreign correspondents anymore. There are hardly any stringers on the site of breaking stories any more."

Tens of thousands of journalists have lost jobs during the past decade's industry upheaval, but thousands more have survived the calamity by developing multi-platform skills that enhance their expertise and value. Many publishers – Tribune Company included – are employing the new skills and expert talent of their print reporters, editors, designers, copy editors and photographers in the development and production of original content unique only to their site.

Building a loyal online readership is taking a long time — arguably too long. But some of our employers are well on the way to figuring out a new workable business model because a) they know the old one is no longer working, b) they know change has to happen and happen NOW, and c) they're including in the decision-making processes their workers' ideas and expertise and in some cases, placing them in crucial roles that will help effectuate the transition to new media.

With the advent of the television medium, radio feared its own demise. Like radio, newspapers will survive the transition to online by not only finding its own niche, but employing the top-flight seasoned journalists who can make it all happen. (end of post)

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Lovers of the press, liberty must root for the Cubs

Columbia Journalism Review's Dean Starkman doesn't care how they do it but the Chicago Cubs must win the Pennant and the Series.

The greater the Cubs’s success, therefore, the higher the price the club fetches in a sale, creating a virtuous cycle of financial success and American progress. The lower the newly private Tribune Co.’s debt, the higher its chance of success, the more likely it will continue to publish, the more reporters and editors it will employ, the more information will emanate from the Tribune, the more enlighted our polity, the wiser our leaders, and the greater the spread of the American way of life throughout the world.
Tribune generated cash flow of $1.3 billion last year. When the Zell Deal is complete, the company will initially have to meet annual interest costs of $1 billion. With revenues down and continuing to slide, there won't be much wiggle room.

(end of post)

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Saturday, September 22, 2007

Guild reaches tentative agreement at Chicago Sun-Times

The new 3-year agreement will go to 190+ union members for ratification next week with full recommendation from the bargaining committee, less than a week shy of the expiration of the current contract. The agreement includes a 1.5% wage increase for all Guild-covered employees in the first year; 2% in each remaining year. Employees' healthcare contributions will increase $5 per week in the first 2 years, $10 in the final year. (end of post)

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Friday, September 21, 2007

FCC chief tips his hand to Tribune and Big Media *

Chairman Kevin Martin met privately with Tribune's editorial board yesterday prior to the FCC public hearing in Chicago. Timothy Karr wrote on Huffington Post:

Martin reportedly told his private Tribune audience that that he wants to relieve the strain placed on newspapers by the digital marketplace for news -- a claim that has been soundly disputed by a recent Free Press study on Chicago news diversity.

"Many of the properties that Tribune owns date back to that original cross-ownership here in Chicago," he said, referring to the company's many local holdings -- including the Chicago Tribune newspaper and TV stations WGN-AM 720 and WGN-Ch. 9 -- which were exempted from the 1975 cross-ownership ban."

– [snip, snip] –

If Martin's FCC proceeds in lifting cross-ownership, the Tribune or any other single company could own the main daily newspaper, eight radio stations, three television stations and a major cable provider in the same town.
Read Tribune media columnist Phil Rosenthal here.

Another viewpoint: Tribune's Truthiness: Blame the Internet

"Wherever you go, from Los Angeles to Nashville, Tampa to Chicago, there's no mistaking what the public thinks about media consolidation," said Yolanda Hippensteele, outreach director of Free Press. "They think it has gone too far at the expense of too many. And they want more local voices, more choices, and a media that actually represents their communities. The question is whether the FCC is listening."

Union leaders, industry representatives, community activists and academic experts were among the 800+ people who waited for hours to testify in front of the five FCC commissioners about the negative impacts of media consolidation.

ALSO: A Night At The (FCC) Opera -- Tribune At Center Stage E&P

(end of post)

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Thursday, September 20, 2007

August revenue down 5.2%

Classified ad sales slid on sharp real estate declines. Publishing revenue slipped 6.1% to $271 million, with ad revenue declined 7.2% to $210 million. AP More details. (end of post)

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Monday, September 17, 2007

WSJ Guild reaches tentative contract agreement with Dow Jones *

The union's bargaining committee will send the deal to to the membership with a recommendation to ratify. The agreement includes annual wage increases of 3% through 2009, compensation for jobs lost to outsourcing, and health care changes including new caps on out-of-pocket medical expenses. AP

"Obviously, this contract is not everything that we wanted and the Board believes it is short of the Quality Contract that you deserve as the people who, day in and day out, create one of the most trusted and respected products in the world," said union president Steve Yount in a note to members posted on the union's website. "But the Board also believes – at this time, under these conditions — this is the best package available."

One of the many differences between a company where employees have union representation and a company where employees are without voice and vote, is in the application of periodic salary increases. WSJ journalists will ALL receive the same percentage wage increase regardless of merit. That's not to say an employee can't request and receive an increase over and above the contractual rate nor are managers prohibited from awarding an individual a merit increase in recognition of a job well done. A union contract sets the MINUMUM wage rates — not maximums — and through collective bargaining, guarantees wage increases will be applied to all employees covered by the labor agreement.

UPDATE: "This is not the best contract we could have gotten"— The New York Observer We are nothing if not a democratic union and dissenting views are common. At the end of the day, the decision to accept or reject the tentative agreement lies solely with the voting members at the Wall Street Journal. (end of post)

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Saturday, September 15, 2007

Tribune considers split in Cubs' franchise

Those close to the transaction wonder if they might not get a better price by selling the franchise in pieces, which would complicate the sale and likely delay its completion until next year, the Los Angeles Times reported.

Estimates of the value of the team, its historic home at Wrigley Field and Tribune's 25% share of Comcast SportsNet, a regional cable TV network, have rocketed to $1 billion and beyond.

The Cubs, after all, are among the biggest draws in the major leagues. About 3.1 million fans flooded into Wrigley last year, keeping the stadium 93% filled despite the team's poor on-field performance. The Cubs finished in last place in the National League's Central Division, although they've come back this year and held on to first place by a slim margin going into Friday night's game with the St. Louis Cardinals.
(end of post)

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Friday, September 14, 2007

Northern California Guild succeeds in defending rights of employees

Employers that unilaterally impose policies without negotiating with the union over the potential impact such policies will have on the terms and conditions under which union-covered employees work violate federal law.

Confirmation of that came yesterday when the Northern California Media Guild announced that the National Labor Relations Board has found that MediaNews Groups ANG Newspapers' imposed policy restricting employees' use of the company email system is illegal.

The NLRB panel ordered the company to rescind its illegal policy, post notices that it would cease violating the law and bargain in good faith with the Guild before imposing any more such rules.

Why is this important? Because left unchallenged, employers could impose or change rules regarding personal breaks, lunch breaks, telephone use, days off — you name it — perhaps for only one, or only a few ...

Most of our Guild employers respect the rights of their employees to have Guild representatives bargain on their behalf over any new rules. And usually, the employer and the workers come quickly to agreements that satisfy the needs of both sides. As it should be.

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Thursday, September 13, 2007

Why media revolution is only just beginning

MarketWatch editor-in-chief David Callaway, whose first full-time job as a reporter was in 1987 for a Murdoch-owned Boston tabloid, explains in his commentary today that "as long as there are Enrons and Worldcoms out there; hedge funds and pyramid schemes; crimes and wars and corrupt leaders, there will be journalists who will find platforms to report on them — whatever the technology."

Back in 1987, it was widely assumed that newspapers were dying. The post-Watergate rush to become a reporter was over. Circulations were down. And new technologies were threatening. At one point, the hot new thing was to deliver news by fax machine, and papers were going to die because readers would be able to get news quicker by fax. They would even be able to tailor the type of news they wanted to receive. Imagine that?
[snip ..snip]
.. this is not the beginning of the end for journalism. It wasn't 20 years ago either. It's a bull market for those who can write a sentence and tell a story and know how to do it across the mediums of print, Web, audio, video and mobile. The stories are there for the taking."
Callaway is a former member of The Newspaper Guild (end of post)

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Wednesday, September 12, 2007

Tribune websites up for digital journalism honors

Finalists for the 8th Annual 2007 Online Journalism Awards include:

Winners will be announced during the Online News Association's national conference Oct. 18-19 in Toronto. From ONA website: "The Online Journalism Awards are a comprehensive set of journalism prizes honoring excellence in English-language Web journalism. They are administered by the Online News Association and the Annenberg School for Communication at the University of Southern California." (end of post)

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Tuesday, September 11, 2007

Analyst: Industry prospects better than what is implied by current share prices

Though ad revenue will continue to decline through 2008, the fall in advertising revenue is cyclical and initiatives to charge for online content are paying off better than some might expect. AP

BTW: Tribune closed at $27.51. (end of post)

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Tribune to outsource jobs at the Sun

Plans are in the works to outsource some finance dept. work to Costa Rica, India and Chicago. The Washington-Baltimore Newspaper Guild (WBNG) says 11 folks in the advertising credit and collection sections of the department could be impacted. Details of the plan aren't clear because the union hasn't yet met with the company to discuss alternative options for the effected employees.

“Under our contract, people can’t be laid off because of outsourcing,” [WBNG president Bill] Salganik said. “So they might be offered buyouts, might be retrained or moved elsewhere.”

Salganik said employees were informed of the move in a Wednesday letter, which did not give a specific reason for the decision. Thomas called the move “an effort to improve service to advertisers and reduce costs.” The Tribune Co. is in the midst of a private buyout, and Salganik said he was not aware of any further impending job cuts.
We find that most employees would rather have an opportunity to remain with the company even when buyout or severance packages are offered. It isn't surprising that people would rather be offered opportunities and training in other departments of the organization these days.

These are stressful times for Tribune workers, but challenging and exciting ones too! Sure, there's quite a number we've talked to that just want to get the hell out of the business entirely, but others want to be a part of the team that is creating the vision for the Tribune's new future.

And as members of the Guild, they are in a good position to do so. (end of post)

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Democracy and The Media

In an editorial in yesterday's The Seattle Times, FCC member Michael Copps (left), makes his case for democracy and against media consolidation that does not serve the public interest.

We have a system that has been buffeted by an endless cycle of consolidation, budget-cutting, and bureau-closing. We have witnessed the number of statehouse and city hall reporters declining decade after decade, despite an explosion in state and local lobbying. As the number of channels has multiplied, there is far less total local programming and reporting being produced. These days, if it bleeds, it leads.
If technology and changes in the economics of the news business have made the old ways impossible, then we need to find new ways to develop a media system that can serve democracy.
Note: The Seattle Times is exploring the state of American democracy and the news media in a series of editorials and essays titled 'The Democracy Papers." The series began yesterday.

Earlier: FCC brings media ownership debate to Chicago (end of post)

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Wednesday, September 5, 2007

This strike is about equity, fairness*

Salary increases have already been allocated; the money is in the county budget. Yet California court interpreters had to take to the streets today in Los Angeles, Santa Barbara and San Luis Obispo, left with no choice but to strike in protest of their low wages. The 400+ interpreters have been negotiating over pay issues since May.

"Interpreters have only had two cost-of-living increases in eight years," said Silvia Barden, who heads the California Federation of Interpreters (CFI). "We're excluded from the salary step system other employees have that provides regular increases based on years of service."

The CFI, affiliated with our parent union Communications Workers of America, seeks salary standards similar to those of thousands of other court employees.

The pay disparity has caused problems with retaining qualified interpreters. "The population we serve includes the most victimized people in society and our services open the doors of justice for them to make their cases in the courts," said Barden.

Union members' decision to strike is a painful one and almost always the least popular action workers will take to get a fair contract. A strike requires careful consideration, strategic planning, unity in execution and tremendous sacrifice.

The California interpreters are absolutely united in their fight for equity and fairness. We hope they are back to work and the bargaining table very, very soon.

* UPDATE: Workers at L.A County courthouses pledge to stay out indefinitely. Widespread disruption of legal system results. LAT (end of post)

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