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A classic battle that may play a role in the future of daily newspapers took place today (June 8). The Boston Globe's Guild members voted 277-265 to turn down a package of concessions, including an 8.4% pay cut, unpaid furloughs and other slashes. The New York Times, owner of the Globe, says it will unilaterally slash wages by 23%. Employees vow to fight the move. Management says the Globe had $50 million in operating losses last year and is headed for $85 million in red ink this year. The Times has threatened to close down the 137-year-old paper if it can't achieve cuts. Advertising and circulation have dropped around 33% in the last five years.

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Comments

WhatGoesAround June 9, 2009 @ 7:32 p.m.

"The New York Times said today (Tues. June 9) that it won't have to close the Globe, at least for now. The needed savings have been achieved."


I wonder if the "needed savings" includes the pending 23 percent pay cut?

Corporate doubletalk is golden. Makes me wonder if the Guild membership did some investigation of their own regarding the Globe's actual financial position. Even though the vote was close, there still is a majority willing to take this fight to court. I am glad they didn't roll over and concede defeat.

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Don Bauder June 9, 2009 @ 9:24 p.m.

Response to post #2: Good point. It was ambiguous. I don't know if the needed savings include the 23% pay cut, and I couldn't find out with what I had to work with at the time I posted the update. It's possible that the guild has found that the losses aren't as grievous as management claims. Accountants generally come up with what they are paid to come up with. Best, Don Bauder

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WhatGoesAround June 9, 2009 @ 10:06 p.m.

Don, that's okay. I researched it a little more at the Globe's website, Boston.com, and the 23 percent is reportedly factored in to their "needed savings," according to at least one article published there. This story keeps breaking with new developments. Here's a link to a letter that some Globe reporters wrote to NY Times publisher Sulzberger:

http://www.boston.com/business/ticker/2009/06/globe_reporters.html

Now Boston.com has a lead article saying that Times Co. has hired an investment bank to manage the possible sale of the Globe. I think you and/or Matt Potter predicted this was coming.

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Don Bauder June 10, 2009 @ 8:08 a.m.

Response to post #4: Yes, the Associated Press is saying that the expected 23% cut will make up half the savings that will permit the Times to keep the Globe for now. Meanwhile, the Boston Newspaper Guild has filed an unfair labor complaint with the National Labor Relations Board to battle that proposed 23% cut. If the Times sells the Globe, will it get anything for it? One analyst says the Globe is worth $12 million to $20 million. That estimate has been repeated a number of times in the press. Who would buy a newspaper that is purportedly losing as much as the Globe is? Perhaps the Times could get a deal in which the real estate is discounted enough that a buyer will take the newspaper and flip the real estate for a fat profit, providing a cushion for trying to do something with the paper. We believe that is what happened with the U-T, but we don't know for certain. Best, Don Bauder

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Don Bauder June 9, 2009 @ 1:40 p.m.

NOTE: The New York Times said today (Tues. June 9) that it won't have to close the Globe, at least for now. The needed savings have been achieved. The Globe said that it will implement the 23% pay cut in paychecks of June 25. However, the Newspaper Guild earlier said it would fight such a cut legally. It will be huddling on its strategy soon. Best, Don Bauder

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