Blue flu at WSJ today**

Reporters were sick this morning. The WSJ union said in a statement:

Wall Street Journal reporters across the country chose not to show up to work this morning.

We did so for two reasons.

First, The Wall Street Journal’s long tradition of independence, which has been the hallmark of our news coverage for decades, is threatened today. We, along with hundreds of other Dow Jones employees represented by the Independent Association of Publishers’ Employees, want to demonstrate our conviction that the Journal’s editorial integrity depends on an owner committed to journalistic independence.

Second, by our absence from newsrooms around the country, we are reminding Dow Jones management that the quality of its publications depends on a top-quality professional time and staff. Dow Jones currently is in contract negotiations with its primary union, seeking severe cutbacks in our health benefits and limits on our pay. It is beyond debate that the professionals who create The Wall Street Journal and other Dow Jones publications every day deserve a fair contract that rewards their achievements. At a time when Dow Jones is finding the resources to award golden parachutes to 135 top executives, it should not be seeking to eviscerate employees’ health benefits and impose salary adjustments that amount to a pay cut.

We put the reputation of The Wall Street Journal and the needs of its readers first. That’s why we will be back at our desks this afternoon, producing the day’s news reports. But we hope this demonstration will remind those entrusted with the future of Dow Jones that our publications’ integrity must be protected, and sustained, from top to bottom.

CNNMoney.com's Paul R. La Monica doesn't think the action will make a difference, "... after taking a quick look at the WSJ’s Web site on Thursday morning, it didn’t appear that there was any indication that people weren’t working. Breaking stories were covered by writers there and not just wire stories".

We think the action by WSJ's unionized reporters sends a powerful message: The staff is willing to take action in full demonstration of their convictions. United, they can and will make a difference in the future of the company in which they too have so much invested. And united, they will continue to demand a fair contract.

We do agree with La Monica's conclusion:

The WSJ’s strength is its brand and that comes from its reporting and editing talent. So if Murdoch succeeds in winning control of Dow Jones, he’s really going to have to extend an olive branch to the union, stat, or he may quickly find that he just threw $5 billion of his shareholders’ money down the drain.

*Will Murdoch walk? "They can't sell their company and still control it — that's not how it works..." An exclusive interview with Murdoch: Time

**Bill Moyers on Murdoch: YouTube

(end of post)

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Shares are sliding

Tribune shares are falling well below the $34 deal price as analysts struggle to decipher the meaning of the drop. Dow Jones reports that shares of Tribune Co., have been steadily weakening in recent weeks. On Wednesday, the stock dropped another dime to $29.36 by midday. A month ago the stock was trading above $33. "It's very puzzling," said Ed Atorino, an analyst with The Benchmark Co. " There has been some very negative news that is off the mark."

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In Baltimore, what they wanted is what they have

A couple of non-union Tribune staffers contacted us about the recent Guild contract settlement at the Baltimore Sun: What about it is a good deal?

We passed on the question to Washington-Baltimore Newspaper Guild president Bill Salganick. Here's his reply:

– We came out of this contract with our real, defined-benefit pension and with company contributions to a 401(k), while unrepresented Tribune employees have neither, having been given a risky ESOP and a cash balance plan. There's no guarantee ours will do better, but it's what our members wanted, and it's what we have.
– We have guaranteed raises for the next four years. While some of that is on the scales and some is "pay for performance," the performance pool must be distributed each year.
– Through bargaining, we were able to maintain a sick leave plan we like, rather than have the inferior Tribune short-term disability plan forced on us.
– Although we've lost our original reporter-photographer combo prohibition, we have, written into the contract, a guarantee of training, and guarantee that people won't be disciplined or downgraded in evaluations for work they weren't hired to do, and a joint Guild-management committee to oversee the transition.
– Our members got to discuss and set priorities, vote on what we proposed, and vote on the final contract (which they approved overwhelmingly).
– Guild-represented Sun employees had voluntary buyouts during the last couple of months and there was a layoff of three ad artists (less work for them), but they got severance and they go on a rehire list – which means they will have right of first refusal should The Sun seek to fill those positions during the next two years.

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NYT on empire-building Murdoch

Today's four-bylined story comes just as reports on the talks between Murdoch and Bancroft family and Dow Jones advisors may be closing in on a deal.

Murdoch's vast media holdings give him a gamut of tools — not just campaign contributions, but also jobs for former government officials and media exposure that promotes allies while attacking adversaries, sometimes viciously — all of which he has used to further his financial interests and establish his legitimacy in the United States, interviews and government records show.

Too bad the gamut of tools at his disposal aren't used for fair and balanced news and information gathering and delivery that truely serves the community and common good rather than simply to promote his agenda and expansion of his personal empire. Readers and employees should hope another valid offer comes along mighty quickly.

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Zell 'doesn't have a silver bullet'

NYT's Joe Nocera went to Chicago last week to see Sam Zell because he wanted to hear what Zell had to say about "his recent — how to describe it? “Takeover?” “Bear hug?” “Assumption of control?”— of the Tribune Company..."

As it turns out, Mr. Zell doesn’t have a silver bullet either. He seemed to take the view, for instance, that all it would take for the Tribune Company to start generating more ad revenue was a smarter advertising sales approach. And while he said he had ideas he wasn’t ready to unveil until the transaction closed, he didn’t seem to believe, as so many do (myself included), that the news business is going to have to find a different model if it hopes to thrive again. “It is a 160-year-old business that has a lot of history and an opportunity to do a much better job,” he said, speaking of the Tribune Company.
[snip]
Zell also made it plain that he did the deal not because he harbored some deep feelings about the role of newspapers in a democracy, but because he was getting a good asset on the cheap. “I looked at this as a business transaction,” he told me. “That’s just who I am. My entry point is $34 a share”— and that low price is why he jumped in. (The ESOP trustee negotiated the lower $28 a share for the employees.) He was just doing what he’s done his entire career: buying an out-of-favor asset.

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A worthy news item you probably don't know about

The International Federation of Journalists (IFJ), which represents about 600,000 journalists around the world, is marking Sunday as a global day of solidarity with Iraqi journalists to highlight the increasing danger and uncertainty their colleagues face as the conflict in Iraq worsens. At least 212 Iraqi colleagues have been killed since 2003 in a conflict that has claimed more media lives than any other in modern history. The IFJ knows of 39 Iraqi journalists who have been killed since January of this year.

The Newspaper Guild, AFTRA, National Writers Union and The Writers Guild of America are U.S. members of the IFJ. The IFJ has 161 member unions in 117 countries and promotes international action to defend press freedom and social justice through strong, free and independent trade unions of journalists. It does not subscribe to any given political viewpoint, but promotes human rights, democracy and pluralism.

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Staff cuts move west to Hawaii

Seventy-four union workers are among 86 employees at the Honolulu Advertiser who are being offered buyouts packages that include a week's pay for every year of service up to 40 weeks, medical, dental and vision coverage for three years or until age 65 and two years of service credits toward the pension plan.

The Hawaii Newspaper Guild reports the buyout is being offered to workers 55 or older and have at least 20 years of service. The company seeks to eliminate 30 full-time positions, including up to a max of 20 union slots.

"We've seen a softening of the Hawaii economy over the past eight months and we believe it is prudent to adjust our staffing as we have other expense elements to provide us the flexibility we need to operate our business successfully," (Publisher Mike) Fisch wrote in a letter to employees yesterday.

Though Hawaiian papers haven't downsized to the extent stateside papers have, Fisch's comments are similar to the mantra we've heard from corporate owners coast to coast.

Sure, the newspaper industry is in the middle of a cultural and economic earthquake that's forcing it to develop a new business model. So why are companies still using an old business model: Need to save money? Cut the staff, slash the payroll! Result? The older, higher-paid employees are being replaced with younger (usually inexperienced), eager-to-work-for-almost-nothing folks while Corporate tries to figure out which new business model will generate the double-digit profits the industry enjoyed during the Nineties.

Employees shouldn't be considered liabilities needing to be eliminated. They are the real assets of every company.

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An ESOP tale from Maryland

Readers of this blog are coming back to re-visit ESOP info posted here and here. The following is from a story in yesterday's The Daily Record about a Maryland-based company that is held by an Employee Stock Ownership Plan "Selling the Benefits of Ownership". It's worth the read.

The recent annual shareholders’ meeting at Macfadden, a Silver Spring-based contractor that works primarily with the federal government, had the feel of a company retreat.

The conference room was packed and guests talked and laughed while they networked before a presentation by President/CEO Russ Hall. In a group exercise, participants pretended to be geese in a flock, a process designed to highlight the virtues of teamwork and leadership.

Hall highlighted company financial information and described Macfadden’s 2006 performance, but the meeting was longer and more detailed than many other companies’ stockholder events. After all, these weren’t just shareholders; they were also employees.

(end of post)

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Market confidence slipping on complex Zell deal

Chicago Tribune – Following Tribune's announcement late Wednesday that May revenues had fallen 11.1 percent -- bringing the year-to-date decline to 5.6 percent -- the company's stock lost 1.3 percent to close at $29.57 Thursday, or 13 percent below the $34 price Tribune pledged to pay for its shares outstanding.
[snip]
"It's an indicator that the market's appetite for the deal is waning," Donnelley said.

Investors aren't the only ones anxious about this deal. Employees are too. We've noted a significant increase in page views to our posts on the ESOP here and here. (end of post)

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Update: Eight buyouts, no layoffs at Hartford Courant

Word is that three veteran reporters and five long-term copy editors left the paper, resulting in enough expense savings for Tribune that no one was forced to leave involuntarily. At a time of wide-spread bad news regarding the extent of Tribune Co. newsroom staff cuts, that's a bit of good news. (end of post)

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Another Tribune staff purge

Twenty-five veteran employees at the Daily Press (Newport News, VA) will leave their jobs within the next few weeks. No details on the buyout severance package.

Some will be replaced and others will not. The move is part of an effort to cut $1 million worth of annual expenses. Some of these savings will be invested in new areas as the newspaper tries to diversify its sagging core business.

Core business being the print product. Tribune continues to slash costs and redirect its resources to the Internet. At least in Newport News, the number of reporters will remain the same though no doubt the jobs will require different skill sets.

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'For years, I had no interest in the union'

I have been a Wall Street Journal reporter for 28 years, in Hong Kong, Tokyo, Paris and now New York. I have written about every imaginable topic from sumo wrestling to diplomacy. I currently cover financial markets. For years I had no interest in the union. My wages went up steadily and my benefits were excellent. Then, in the past decade, management pulled out its knife and began trying to grow through cutbacks, a recipe for disaster. At first, people figured cutbacks were inevitable and tried not to worry about it. But with time, we came to realize that the cuts were hurting the paper, not helping, and that they were a crutch management used to avoid exercising actual leadership. When they cut our retirement benefits, a lot of us who had had little involvement with the union got involved, forcing management to roll back most of the planned cuts. When the union later agreed to a deal to cut health benefits, we voted to reject the proposal contract and negotiated a new one. A new group of people took over leadership of the union. Now we are locked in yet another fight over proposed cutbacks, this time involving both health benefits and real, take-home wages. We have realized that the only way to protect ourselves is to act together. We are much stronger today than we were five years ago, and management is slowly discovering that it will have a fight on its hands every time it tries to cut. The cutbacks are threatening the newspaper's quality, and the only way to protect the paper -- and our families -- is to stand up for ourselves.

E.S. (Jim) Browning,
WSJ reporter

(end of post)

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Carl Bernstein on LAT staff cuts: "A truly awful tale"

Carl Bernstein was in LA last week for at a book signing for his recently-released Hillary Clinton biography where he was interviewed by LAObserved's Jacob Soboroff. Bernstein has much to say about the LAT - "a truly awful tale ... to watch a great newspaper get stripped and great people leave ... to watch this parent company with an interest in very little except the bottom line ..." Watch the video at LAObserved

Bernstein voices the sentiments of many we've talked to at the LAT. The Tribune's demands for higher profits from its newspapers from out-of-town corporate makes it extremely difficult for a reduced staff of managers, editors and staffers - all of whom share a strong commitment and obligation to the Los Angeles readership and community - to put out a great newspaper with fewer and fewer resources. Yes, it's being done well for the time being. But, how much longer before the next failed cost-saving and staff-cutting plan comes along? Cutting staff and resources at a profitable paper is not a way to make the LAT a better paper.

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New BS/Guild contract ok'd by voice vote*

* Read Baltimore Sun story here
* Read E&P story here

"I am glad both sides were able to work together for a fair contract,” said Bill Salganik, President of the Washington-Baltimore Newspaper Guild. “Now, we can put this behind us and work together to produce a great newspaper to serve our community, our readers and our advertisers.”

Congratulations to the bargaining committee and union members at The Sun who stood united during intense negotiations. Both sides – management and union – are winners today.

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Looking the same is not the same as being the same

A little off topic for this blog (but certainly related to what we do) is a post on John Duncan's The Inksniffer – "Why newspapers should get out of the internet business before it kills us all". We're linking it here because his reasoning raises some interesting points that are worth considering for those of us who are tired of hearing newspapers are dead and the internet is the future.

The internet is great. The access it has given consumers like me and you to news and information is great. But becoming commercially successful at distributing information on the internet requires us to completely change who we are and what we do, to compete with completely different people.

Who succeeds there? Individuals with a million ideas who execute them quickly and effectively. And some huge global companies with vast resources who snap them up. People who think outside of geographies and inside communities of interest. People who can apply the language of computers to solving real-world information needs. People who want to do something for themselves or others just for the hell of it and don't carry huge costs. People who experiment and fail all the time and just keep on going. People who can gather other people's work and spread it around in a useful way without making much money off it. People who are happy to put something out there and see it used in a completely different way to what they intended. Does that sound like any newspaper company you know. Me neither.

(end of post)

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