Friday, August 31, 2007

Labor Day: From the folks who brought you the weekend

The holiday designated for the first Monday in September is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.

The Industrial Revolution changed our nation and the world. Unfortunately, it ushered in 12-hour work days, seven days a week for workers of every age — children included — and often under terrible working conditions. Check out for an illustrative history of Labor Day and and the labor movement.

We'll be back Tuesday. (end of post)

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The Motley Fool remains skeptical that Tribune will go private under the Zell-engineered buyout of the company at $34 a share. Shares closed at a little more than 20% below that at $27.55 today.

The sharp decline in ad revenue, the glum real estate worries and eyeball migration to the Internet is impacting all the larger newspapers, but at Tribune "that resulted in a 5.9% revenue decline in July, with revenue at the publishing unit down 8.6%. Advertising revenue fell 10.3%. Classified ad revenue tumbled 18.2%, as real estate revenue dropped a steep 24%. It was another disappointing month from a company that recently reported lackluster earnings."

We were assured 10 days ago that the financing commitments are "tightly written" and include undefined material adverse effect clauses tied to industry performance. But Fool's David Lee Smith writes "The Zell group has arranged for the financing that would facilitate the buyout, although participating banks might pull that commitment if there is a material change in the company's circumstances -- which appears to be happening."

Guess we'll re-read the Merger Agreement.

We're all nervous about the possibility that the Deal will die. Of course, we hope it doesn't, because the alternative is even more distressing — because uh, well ... what isthe alternative?

Next week here, some thoughts on the shrinking iceberg and a few Guild ideas for transformative change.

Meantime, have a happy and safe(!) Labor Day weekend.

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Thursday, August 30, 2007

KTLA-TV building is for sale

The Tribune property, where talking pictures were born when Al Jolson recorded "The Jazz Singer" in 1927, could be worth about $175 million. The building on Hollywood's Sunset Boulevard also houses Tribune Entertainment and Tribune Studios. It was built in 1919 and was formerly home to Warner Bros Pictures. LAT

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Wednesday, August 29, 2007

Will Zell sell Tribune Tower, LAT bldg? *

With profits and revenue falling, newspaper companies are increasingly looking to real estate to shore up their finances. WSJ:

Eyes are also on real-estate swashbuckler Sam Zell, who is in the process of buying the Tribune Co. Some in the real estate industry believe he could sell its properties, including the 1925 neo-Gothic Tribune Tower on Chicago's North Michigan Avenue and the Los Angeles Times building, which is not far from the Walt Disney Concert Hall and other downtown landmarks.
*Update: WSJ includes the $45M sale of four downtown blocks owned by the Minneapolos Star Tribune (Avista Partners)to the Minnesota Vikings. Nope. The deal fell through. (end of post)

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Tuesday, August 28, 2007

Zell on YouTube. No kidding.

We found this on "Sam Zell’s warning at the end of 2005 in his annual “holiday card” that excess liquidity, falling yields and narrowing spreads will violently return to equilibrium seems awfully prescient. Zell produced a parody of the song “Raindrops Keep Falling On My Head,” with lyrics detailing his take on the current economic situation."
(end of post)

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Monday, August 27, 2007

Slate Magazine: Zell's Big Dis of LAT *

[Link added]
On his "mostly political weblog" on, Mickey Klaus suggests LAT's publisher should release the video of Zell's visit to LA staff:

...David Hiller sent a memo to the paper's staff describing Zell as a "high energy straight-talking business owner" who "believes Los Angeles Times is very important and 'has a great future'." Kf hears Zell was rather more critical than that. In his talk to the assembled staffers, he said he found the paper "pretty bland." He pissed on the business section. He ran down the importance of foreign coverage as opposed to local news. Asked whether front-page ads compromised the integrity of the paper, he called that idea a "crock of shit." He made a big point of saying the paper had to print what readers wanted to read, not what LAT editors wanted them to read — an idea that's pretty much in complete conflict with the existing DNA of the Times ... Whose account is more accurate — Hiller's or mine? There's an easy way to find out, since a video of Zell's talk was posted on the Times' internal network. Hiller could release it.
Ouch. Sounds like he saw the video. We haven't. (end of post)

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Friday, August 24, 2007

Cluster, consolidate and cut

Media News Group's Bay area "cluster bomb" is the topic of Timothy Karr's column at Huffington Post. Media consolidation, staff demoralization, layoffs, cheapening the news, federal labor law violations, unhappy readers ... it's all there. Read why it matters. (end of post)

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The jobs are online *

[*UPDATE: Glazer writes a follow up, "The Difficulty of Putting a Number on Journalism Jobs". He concludes "It’s going to take hard work and focus to figure out how to successfully compete (and collaborate) online with the Googles and Yahoos of the Net world — and cutting staff indefinitely isn’t a solution." Check out the comment section for both.]

MediaShift's Mark Glaser says traditional journalism job cuts are being countered by digital job additions: "If you follow the world of traditional journalism, you can’t help but notice the seemingly constant stream of layoffs and buyouts at news organizations. But media observers don’t often emphasize the flip side: As newspapers and broadcasters slice their senior-level workforce, they are also quietly building their digital and online teams."

Glaser's piece is worth the read and here's some tidbits that should inspire you to click-click:

— As of today, there's 46 editorial interactive and broadcast jobs available at Tribune. As of yesterday, there was 645 "online/new media" job listings on mediabistro and 628 newspaper openings on
— Companies want to hire digital folks because they’re trying to get the younger set, the technologically savvy journalist who doesn’t have the pay built up yet and has the skills of the next generation
— Newspapers who have cut print jobs to add digital positions are having a hard time finding people with necessary journalistic skill sets
— The talented people pushed out could have easily been re-trained, but most companies don't invest in training or "human capital"

Guild journalists negotiate training provisions in contracts with their employers that when exercised, benefit workers and the company. Journalists with the latest in tech-savvy skills have better job security.

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Thursday, August 23, 2007

Zell: 'I promise you I did not come here to be captain of the Titanic'

For you folks east of Los Angeles who may have missed this – posted on LAObserved is LAT publisher David Hiller's memo to staff recapping Sam Zell's off the record visit with managers last week. Snippets:

— He doesn’t associate with mediocrity, so wants to “go for greatness”
— “My head and neck only look forward;” “I don’t really give a [ ] about the past”
— Without revenue we can’t print the paper
— Believes in giving people authority and local decision-making, and then holding them accountable

And – he's "Committed and confident in the deal getting done (don’t focus too much on current stock price)"

Wonder if he'll drop by for a visit to other owners? (end of post)

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Wednesday, August 22, 2007

For employees, a step closer to ownership

Yesterday's 35-40 minute shareholders meeting was dry and dull, except of course, for the dozen or so questions from employee representatives. There was very little CEO FitzSimons said that provided information new to what had been previously available in published reports. Though we knew the vote outcome was a no-brainer – shareholders wanted out for sure – we were disappointed there wasn't a bit more shareholder pressure on the ESOP question. But hey. There were only nine of us (of 75-80?) in attendance who care about employee rights.

So if all goes as expected, by year's end you'll be the owner of one of the nation's biggest multimedia companies. Tribune will become employee-owned, but not employee-managed. Upon completion of the deal, Zell, with his option to purchase 43.5 million new shares from the ESOP, will own 43.5% of Tribune Company and become it's Chairman of the Board and you will own 56.5% of the company, but have no seat on the Board or the ESOP committee.

Okay. That's the Deal and as a Tribune employee in Chicago told us recently, that horse had already left the barn. But unlike our good ESOP tale, this ESOP should be plenty worrisome for non-union employees because in addition to being an owner without a voice, you'll also own more debt than you ever could have imagined and certainly never asked for. And though your pre-April retirement accounts may be in good shape, you folks in your 40s and 50s particularly need to pay close attention to how this ESOP performs going forward.

You can find analysis, numbers, projections and reports about next steps of the Zell Deal here Chicago Tribune and here Los Angeles Times, but we need to talk about something else.

There's about 3000 Tribune employees who will not automatically become employee owners of the new Tribune (Baltimore Sun, Newsday, Stamford Advocate and the LAT Pressmen), nor will they shoulder the company's $13 billion debt load. Why? Because they're either covered by a Newspaper Guild contract, a GCIU/Teamster contract or a UAW contract, that guarantees their right to have a voice on their retirement plans. In other words, Tribune could not impose the ESOP on union-covered employees. That's not to say future negotiations may not include ESOP participation, but the decision will rest with the parties involved.

The #1 concern we hear from you relates to Tribune's long-term survival. The company for which you have dedicated your talent and time – in some cases, your entire careers – is in serious trouble and many of you are scared enough to seriously consider getting out of journalism all together. It's sad, it is discouraging and it may be tempting, but now, at a time when the company (and the industry) needs your experience and talent the most, there are other alternatives that can ensure you have more say in the process.

So it is in this context that we'll talk about your value here, rather than day-to-day comment, discussion and prediction of Tribune's value. Because at the end of the day, without you, Tribune Company has no value.

Next: Ideas for moving from a shrinking iceberg to terra firma

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Tuesday, August 21, 2007

Yes, the shareholders ok'd the merger, but ...

you aren't surprised, are you? Well, neither are we.

Why vote against a deal that guarantees you $34 per share at a time when they're worth less? (Although they closed up today at $27.98, who knows where they'll be next week or — in the 4th quarter.) The handwriting has been on the wall for weeks and the proof was in the 97% of the shares voted cast in favor of the buyout.

But what alternative is there?

The Q and A session before the vote was brief: other than the 8 or 9 questions from a delegation from the Teamsters and a Guild question (yes, we were there too) about the Deal's financing agreements, only one claiming to be a private investor spoke up.

We have more to share with you about today's meeting and the ESOP worries. Stay tuned. (end of post)

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Saturday, August 18, 2007

Doubters continue to give debt-fueled buyout 'no better than 50-50'

There's little doubt shareholders will approve the merger Tuesday, but the real question is: "With credit markets badly hurting – and newspaper revenues declining – can Tribune and its lenders complete the 2-stage deal?"

The Merger Agreement specifically excludes changes in the credit or financial markets as reason for the deal not to go through. Nor can can Zell and the lenders bail because of Trib's operating weaknesses. Take a look. Reading it word for word could make your eyes glaze over but you'll find answers to some of your questions. (end of post)

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Friday, August 17, 2007

A few cost-cutting measures

In addition to restricting long-distance calls in Fort Lauderdale (see previous post), plans to cut more costs include shrinking the paper width in Chicago (will other Trib papers follow?) and using Los Angeles employees to shoot a promotional commercial.

In a memo to employees we found on FishbowlLA, LAT creatives invite mom and dad exempt staffers who "smile big, yell and get excited" to volunteer to participate in a crowd scene for the shoot. Sounds fun.

We just hope the LA script actually calls for LAT employees, because in a city full of union-represented talent (AFTRA, SAG), we'd hate to think the company would use its own people to avoid paying for professional actors. (end of post)

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Thursday, August 16, 2007

Sun-Sentinel restricts long-distance calls

The idea came from an employee during one of the paper's "Transformative Change" meetings. To make a long distance call, you'll need a personal authorization code. Implementation of the new program expects to save the Sun-Sentinel $100K a year. Maybe the plan will save a job or two over time. (end of post)

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Wednesday, August 15, 2007

Read the Merger Agreement yet?

Edited— The special shareholder's meeting to consider and vote on a proposal to adopt the Merger Agreement and approve the merger is next Tuesday in Chicago. There's 127,330,754* shares of common stock outstanding and if you are still holding some ...

Can't find your copy of Schedule 14A – 200+ pages of info on the shareholder meeting, Board recommendation and Merger Agreement? Jump on the Tribune's website here and click on the second form, DEFM14A (July 13).

Scroll down the left rail and you'll find the Table of Contents (page 5) where you can then locate your topic of interest. For example: Q&A about the Special Meeting and the Merger is on page 14. How to vote your shares held in the Tribune Employee Benefit Plans: page 18. What happens if the merger isn't completed: page 63. The effect on the overall vote an abstention, a broker non-vote or just plain failure to vote? page 85

You won't find lender financing guarantees there. But the Credit Agreements must be secure because Zell says its a go.

* Number of shares outstanding at close of business July 12, excluding shares held by subsidiaries.

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Tuesday, August 14, 2007

Tribune shares continue to fall, but Zell remains committed *

Yeah, we keep hearing that.

Shares closed at $25.28, but word is (still) that the $8.2 billion in financing needed to complete the deal is in place.

Meanwhile, there's a meeting in LA Thursday where Zell will be a special guest. (LAObserved, scroll down to find the post.) It should be a very, very interesting meeting for future employee-owners.

Oh but wait. The meeting's only for the executive types.

Well, there is the shareholders meeting next week ...

UPDATE: Tribune disputes the analysts, plans "to go ahead with the sale and that it expects to remain in compliance with the terms of the financing commitments." Like we said, we keep hearing that.

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Dow Jones workers stand up

The DJ union (IAPE) is set to return to the bargaining table Wednesday with hopes it can resume "serious and constructive" bargaining for a new contract with the company tomorrow.

In advance of the meeting, reporters and editors emptied DJ newsrooms in New York, Boston, Chicago, Washington, Los Angeles and Dallas to talk about how to get their message to the new owner "that its 'investment' in Dow Jones must include a quality contract" for union members.

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Monday, August 13, 2007

New Zealand's largest daily outsources editing and layout work

Here in the U.S. newspapers have outsourced maintenance, accounting and billing, human resources, call centers, and recently ad production departments, none of which according to the companies, are part of the core business. But editorial is the sacred core of the business, right?

Apparently not. The current seismic newspaper industry environment has forced companies to implement similar cost-cutting measures in editorial functions.

Media companies in other countries will be watching to see if New Zealand's largest daily, which began outsourcing editorial production work Sunday to a subsidiary of Australian Associated Press, can make it work. (FYI: Murdoch's News, Ltd. owns a 45% share of AAP)

Starting Sunday, 20 full-time sub-editors at contractor Pagemasters New Zealand will be "operating on an extension of APN's 'Cyber' computer editorial production system" at a site 20 minutes from the paper's editorial offices.
The Engineering, Printing and Manufacturing Union that includes New Zealand journalists, said the move will erode the quality of news coverage because stories will be handled by copy editors not familiar with local issues.

Employer business decisions such as these threaten the product and jobs. Having a union gives employees the right to engage the company over outsoucing plans and to offer alternatives that may help the company achieve its goals while perserving journalists' jobs.

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Friday, August 10, 2007

Tribune journalists received Guild's 2005 and 2006 Heywood Broun Awards

Lisa Chedekel and Matthew Kaufman (left), of the Hartford Courant clinched the 2006 $5000 award, named for The Newspaper Guild's founder, for their four-day series* “Mentally Unfit, Forced to Fight’’, an examination of the U.S. military’s approach to mental health problems within the military. The reporters found that troops were sent into combat despite suffering from post traumatic stress trauma, depression and bipolar disorders and that diagnosis and treatment in the field was negligent at best.

“The Courant series happily lives up to another Broun legacy,’’ said the Guild contest judges in their announcement of the award. “In publicizing the little-known plight of mentally ill soldiers, the paper helped prompt new legislation addressing the flaws in the military’s mental health system…’’

TNG-CWA members and supporters from other labor unions and the media celebrated the journalistic award winners at the annual Freedom Award Fund Banquet, held May 3—World Press Freedom Day—in Washington, D.C.

Heywood Broun founded the American Newspaper Guild (now The Newspaper Guild) in 1933 and was a crusading columnist for the Tribune and The World in New York from 1912 until his death in 1939. He also wrote frequently for The Nation and The New Republic, as well as Harper's, Bookman, American Mercury and Collier's.

Broun is best remembered for his reporting on social issues and his passionate championing of the underdog and the disadvantaged. He maintained a steadfast belief that journalists could help right wrongs, especially social ills. The annual Broun Award is awarded for outstanding work by a journalist, especially work that helps correct an injustice.

Matt Lait and Scott Glover (right), reporters for the Los Angeles Times, won the 2005 Broun Award for “A Case of Doubt” — their review of a 20-year-old murder case** that was so painstaking it forced the prosecutor in the case to question the evidence he had used.

* NPR interview
** AJR story

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Consolidation at MediaNews threatens SF Bay Area newspaper workers' protections *

A plan to consolidate editorial functions of the six-paper Alameda Newspaper Group (ANG) and the five-paper Contra Costa Newspapers, could mean the end of the Newspaper Guild unit at one of the entities, union leaders fear. “I think he wants to get rid of us,” Doug Cuthbertson, executive officer of the Northern California Media Workers, said about MediaNews CEO Dean Singleton. “The group we represent would be a minority of the [combined] editorial staff and they believe they could withdraw representation.”

In a Call to Action to other MediaNews Guild members, ANG members wrote in part "Our union, which we have fought almost 20 years to maintain, is under attack. Our long-won right to collective bargaining, it seems, is being ignored. Our voice in our own future is being threatened. We are outraged, and we are fighting - hard. If the company denies our existence, we must deny them their right to do so."

Related:'s take on MediaNews' success that is "based on aggressive cost controls, rather than journalistic excellence.”

* UPDATE: Guild disputes withdrawal of recognition during consolidation process

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Thursday, August 9, 2007

FCC brings media ownership debate to Chicago

A public hearing with FCC commissioners scheduled for Sept. 20 will give the public an opportunity to weigh in on media consolidation and changes being considered under the FCC media ownership rules.

In a release today from Free

In Chicago, the cross-ownership rules have taken center stage as the FCC considers whether to allow Sam Zell, the new owner of the Tribune Co., to hold onto the Chicago Tribune as well as WGN-TV and WGN-AM. When the cross-ownership ban was instituted in 1975, the FCC "grandfathered" the Tribune's ownership of these outlets.

"It's time for the FCC to stop pretending that media conglomerates like the Tribune Co. are local businesses that serve local communities," said Linda K. Foley, president of The Newspaper Guild-CWA. "In this age of media consolidation, the FCC should not only continue its rule banning cross-ownership of newspapers and broadcast stations in the same market, the commissioners should reconsider the multiple waivers of the ban granted Tribune Co. over the years."
Among the local and national groups urging its members to attend are Broadcast Engineers Union I.B.E.W Local 1212, Communications Workers of America and The Newspaper Guild-CWA*.

*The Guild represents employees at the Chicago Sun-Times.

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Firm recommends holders approve Tribune buyout

Proxy Governance, an independent proxy advisory and voting firm, recommended today that shareholders approve Zell's $8.2 billion deal.

According to AP, the firm "views the acquisition as Tribune's best option after a comprehensive evaluation of strategic options."

Tribune shares closed today at $26.96. (end of post)

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Wednesday, August 8, 2007

MSNBC's Olbermann credits the Guild with saving his career

In an interview prior to moderating last night's AFL-CIO's Presidential Candidates Forum, MSNBC's "Countdown" host, Keith Olbermann said the News Media Guild * saved his career years ago after a boss who'd returned from a liquid lunch "fired me on the spot and said 'you don’t give the managers no lip. You get your stuff and get out of here.'”

"If that firing had held I might not have been able to continue in broadcasting."

How was the Guild able to get Olbermann reinstated? He was covered by a union contract that provided protections against discharge without just cause. The union contested his dismissal and prevailed, which allowed Olbermann to continue on in his chosen career.

*The Media Guild was formerly called Wire Service Guild and is a local of The Newspaper Guild-CWA.

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Tuesday, August 7, 2007

ESOP expert says interest by wealthy investors in the plan is growing

In an interview with The Boston Globe, Chris Mackin, founder and president of Cambridge, Ma-based Ownership Associates and a Newspaper Guild consultant, said the recent action by the Dow Jones union in evaluating alternative options to the News Corp bid is notice to the investment banking world that "unions can be savvy participants in the process and can influence events". (end of post)

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A journalists' chain letter, of sorts *

A bit off topic but worth sharing: Minneapolis journos at the Star Tribune and Pioneer Press got energy boosts Saturday night and Monday in the form of very big boxes of treats from The Roanoke (Va.) Times newsroom. Here's why.
*More about the care packages from E&P (end of post)

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Wednesday, August 1, 2007

Like Tribune sale, News. Corp deal will face FCC scrutiny

Regulatory approval will be no "slam dunk" for Murdoch's deal.

"It's interesting to hear the 'experts' claim the transaction faces no regulatory hurdles," said Michael Copps, a Democrat on the FCC. "Not so fast! This deal means more media consolidation and fewer independent voices, and it specifically impacts the local market in New York City."

Copps said the FCC "should immediately conduct a careful factual and legal analysis of the [News Corp.] transaction to determine how it implicates specific FCC rules and our overarching statutory obligation to protect the public interest."

On a related note, yesterday the FCC unveiled 10 new studies on media consolidation and its plan to give the public a 60-day comment period. The studies are drawing criticism from consolidation critics, including Consumers Union and Free Press.

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Los Angeles Daily News hit with staff cuts

The paper is eliminating zone coverage that will eliminate 8 jobs. The company is offering a buyout package of one week's pay for every year of service up to 6 years and 3 months paid COBRA coverage.

Guild leader Brent Hopkins blogs at The Paper Trail:

... today is a terrible day. Once again, MediaNews' corporate moneyhounds have put profit ahead of people and good journalism, and that's horrible for everyone involved. While the overall job loss should be relatively minor, that doesn't matter much when it's your job that's eliminated.
Recently, Dean Singleton's MediaNews Group (flagship paper is The Denver Post) has expanded his MediaNews empire in California (41 properties)and is merging some and closing other newspaper operations in the San Francisco Bay area and just completed a massive staff slash at the San Jose Mercury News.

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Newspaper Guild president Foley on Murdoch takeover of Dow Jones Company *

Linda Foley, president of The Newspaper Guild-CWA, expressed disappointment with the deal yesterday, but said the future editorial impact on the Journal "is an unknown ... If News Corp. didn't get the message that that is important, then they are not listening. We're going to continue to hold their feet to the fire." More responses at E&P.

* DJ union leadership's message to members:

For the record, IAPE's focus is unchanged: This union exists solely to protect your interests. Everything we've done over the past two years has been designed to win you the contract that you deserve.

That effort continues.

The employees of Dow Jones are the most important asset of this company — and that's true regardless of who owns Dow Jones & Company. IAPE will continue to do everything it can to ensure that the employees of Dow Jones are recognized and rewarded for their contributions — the very contributions which make Dow Jones & Company worth $5 billion.
(end of post)

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