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Union-Tribune employees expected another mass axing in February. It didn't come. But an even larger head-chopping than expected will inevitably come. Here are some numbers that I have gleaned. U-T annual revenue is at most $250 million and probably closer to $200 million. Some say the company is slightly profitable to break-even; others say it is in the red. The company has neglected critical expenditures such as pagination and updating the antiquated printing presses. SignOnSanDiego revenue peaked at $19 million in 2006 and is probably down to $17 million. The sale was probably for $15 million to at most $45 million. (La Jolla real estate was not included.)The Mission Valley real estate is worth more than $45 million in even a so-so market, but the operating asset, the paper, has little value. The real estate has little bottom line value if the company continues to occupy the building. The company will be run by Black Press, whose bonds are in junk status. Ergo, the privately held company is hurting. It has been eyeing Copley since August, as reported repeatedly here, but probably didn't have the money for the purchase. Enter Platinum as the sugar daddy. It doesn't know newspapers and will rely on Black, even though its newspapers are quite small. So there would seem to be two business strategies: 1. Since online revenue is so small, try to keep the print edition going. This will require very sharp employment cuts. The problem is that as editorial employees are cut, the product will continue to go downhill, losing circulation and market share -- possibly a death spiral scenario. Perhaps enough employment could be cut so that the company could move to smaller quarters and cash in on the Mission Valley property; 2. Go partly- or wholly-online and only go with a print edition a couple of days a week. Printing could be outsourced and the building vacated and sold. Problem: huge gamble, with online revenue so small, and reasonable online profitability so far away. Under either of these scenarios, employment will be sliced sharply.

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Comments

HellcatCopley March 19, 2009 @ 3:02 p.m.

No story on head chopping would be complete without revisiting this pic of UT Editor Karin Winner:

http://img502.imageshack.us/img502/7752/winner2.jpg

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Don Bauder March 19, 2009 @ 4:49 p.m.

Response to post #1: This is the second time around on this photo crop. Best, Don Bauder

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Don Bauder March 19, 2009 @ 4:51 p.m.

Response to post #2: Man, your creative juices are overflowing. Best, Don Bauder

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Copleys_Taint March 19, 2009 @ 5:19 p.m.

That photo of Copley sure does get around. Tab down on the following page: http://menwholooklikeoldlesbians.blogspot.com/

Glad to see that you're getting so much mileage out of that lovely Copley pic. Please abuse it!

Is Burl one of the likeliest (and costliest) candidates to be shown the door? Can't wait to read his column that lists the names of all the people he stood next to at unemployment. "Karin Winner was there, so was Chris Lavin. Also in attendance, Diane Bell..."

And if you need more Copley photos and belong to Facebook, search Andrew Shelton, DC's "aid-de-camp," as Burl once put it. His profile is available to anyone, so you don't even have to be his "friend." Aw, hell. I'm in such a good mood, I did it for you.

Isn't that coat made from the same material as Michelle Obama's Inauguration Day gloves? http://img151.imagevenue.com/img.php?image=08090_copleyingreen_122_47lo.jpg

http://img31.imagevenue.com/img.php?image=08085_copleyaloha_122_1055lo.jpg

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David Dodd March 19, 2009 @ 5:36 p.m.

The UT has been a horrible newspaper for years, the writing is incredibly bad and some of the reporting is inexact, incomplete, and incorrect. But here's the one factor that makes its purchase attractive: It has no competition. While competition makes for a better product most of the time - the lack of it makes for more of a chance at profitability, assuming that necessary changes are made to ensure that this has a chance of happening.

Firing many of their writing staff would be an excellent start to that process. I can name names, if it would entertain anyone.

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Copleys_Taint March 19, 2009 @ 5:39 p.m.

I dunno. I, for one, could stand some entertainment along those lines.

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Don Bauder March 19, 2009 @ 5:45 p.m.

Response to post #5: Yes, that is Andrew. I have always been told that Burl Stiff worked directly for David, not for the U-T. So, yes, he will be gone. Best, Don Bauder

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SurfPuppy619 March 19, 2009 @ 5:49 p.m.

I can name names, if it would entertain anyone.

By refriedgringo

===========================

Please....... fire away!

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Don Bauder March 19, 2009 @ 5:53 p.m.

Response to post #6: You are free to name writers that you think are not doing a good job. There are a lot of good journalists out of work. But hiring a new staff can be expensive. Best, Don Bauder

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mustangannie March 19, 2009 @ 6:24 p.m.

Copley's yacht has its own postage stamp issued by the Marshall Islands, according to Voice of SD

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Don Bauder March 19, 2009 @ 7:47 p.m.

Response to post #11: My Reader column of January 18, 2007, "How to Avoid Taxes, Cruise European Seas," explained how David's $33 million yacht is registered in the tiny tax haven of the Marshall Islands, thus saving him bucks.Put "Marshall Islands" in the Reader search box and it will come up. Best, Don Bauder

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JustWondering March 19, 2009 @ 8:15 p.m.

Response to #4.... I was thinking the EXACT same thing!

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Visduh March 19, 2009 @ 9:13 p.m.

Another big round of axing at the U-T will have its news gathering capabilities so weakened that even if the editor WANTED to do some stories, there would be nobody there to write them. They cannot now adequately cover basic stuff in No county such as school board and city council meetings. When they do, the stories appear a day late.

I was amused by the pic in today's U-T of Winner and Bell standing in the newsroom. Isn't that Bell's first appearance in front of the U-T staff in two or three years? He finally had a reason to come out of his fortified ivory tower and face the unwashed. His job is apparently done. He got the paper sold. Gee, I wonder how big his final bonus will be? If the paper sold for $15 million or so, just how much does he deserve to receive from David? I'll bet you he wants just about a million for himself, but will he ever see it?

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Don Bauder March 20, 2009 @ 7:52 a.m.

Response to post #13: Since it is agreed all around that Copley took an extremely low price for the paper ($15 million to $45 million, say), then who got conned? Good question. I understand Black/Platinum were the only actual bidders. Best, Don Bauder

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Don Bauder March 20, 2009 @ 8:04 a.m.

Response to post #14: Bell earlier told employees that he was not in on the negotiations. I believe that. He does not have the sophistication for that. Hal Fuson, corporate COO and de facto CEO, supervised the process, but investment bankers actually handled the negotiations, I am sure. That is the way it goes in any deals of this kind. I would guess the deal was driven by several factors: 1. David Copley, perhaps influenced by another person, wanted to sell and was willing to slash the price, which he obviously did; 2. Stock market valuations of newspapers influenced the negotiations. The market has slaughtered these stocks, as the Reader has been reporting. A potential buyer could have bought more enticing properties by making a bid on a publicly held stock, or a paper owned by a depressed parent; 3. The real estate market is also depressed; 4. Black wanted to buy it earlier but didn't have the resources. The deal only took place when Platinum entered as sugar daddy. Best, Don Bauder

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pascal March 20, 2009 @ 9:15 a.m.

Response to post #6: "...[The UT] has no competition." Really?!

Guess that's why they, like so many other papers, are seeing their audience high-tailing it to the internet. Guess that's why more than a few advertising dollars are following suit. Guess that's why even more advertising dollars end up in local broadcast (radio, TV and cable). Guess that's why so many inserts appear instead in the mail these days, stuffed into Pennysavers, Red Plums and the like... etc., etc., etc...

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Don Bauder March 20, 2009 @ 10:43 a.m.

Response to post #17: Good points. The U-T always has acted as if it had no competition. But it did, both in print and electronics -- the ones you mentioned, and more. Many times I saw editors hold stories without even considering that a competitor might jump on them. After the merger of the early 1990s, and the Union and Tribune were no longer competing, journalism is San Diego suffered. Best, Don Bauder

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SurfPuppy619 March 20, 2009 @ 10:51 a.m.

Guess that's why so many inserts appear instead in the mail these days, stuffed into Pennysavers, Red Plums and the like... etc., etc., etc...

By pascal 9:15 a.m., Mar 20, 2009 > Report it

============================

The insert advertisments in daily papers-especially Sunday editions- are in awful shape.

The UT and the LA Times used to have hundreds of inserts on Sundays, now it is almost nothing.

Same goes for the classified section on Sundays, where on Sunday the employment section would have 10-15 opages of jobs, where today there is 1-1.5 pages max. And that is not because of the economy either.

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Don Bauder March 20, 2009 @ 1:22 p.m.

Response to post #19: The inserts are, in a sense, the raison d'etre for the Sunday paper. And they never were as profitable as other advertising. Best, Don Bauder

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FoolsGold March 22, 2009 @ 4:58 p.m.

Don, Tell everyone about the heads that were chopped at the SD Reader this month. Why aren't you talking about that. Jobs being cut and outsourced to India. Let me guess...just not in the loop...thats the business side, or is it because you don't hear that much about local issues in San Diego because living in a small podunk town in Colorado. Surfing the net all day from home a tossing in your 2 cents doesn't make your comment local. Get a clue. Well over 20 jobs were eliminated and it didn't make any news report, online report, or dumb blog.

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Don Bauder March 22, 2009 @ 9:37 p.m.

Response to post #21: I heard a couple of months ago that some Reader jobs were cut. If there were some cuts lately, I am not aware of them. In any case, job eliminations at the Reader, CityBeat, Voice, or any of the TV or radio stations, including KPBS, would not be big news currently. The collapse of the U-T and other metro dailies has been big news, both in San Diego and elsewhere, because there are huge societal implications. Best, Don Bauder

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Xray March 22, 2009 @ 10:32 p.m.

I was so hoping that crappy biased rag would fold. Oh well maybe the new owners will give decent legitimate content that is not biased.

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Don Bauder March 23, 2009 @ 7:15 a.m.

Response to post #23: I have been covering Black since last August. I have looked at some of his papers online. When the deal was announced last week, several people asked me about Black's politics, and whether he pushes them in his own papers. I was embarrassed to say I didn't know. I had not checked that out. In retrospect, that seems pretty stupid. The only thing I can think is that at the time, I was only considering him a prospect to buy the paper, so I didn't look at that aspect. Best, Don Bauder

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Shadow March 23, 2009 @ 3 p.m.

Good thing Diane Bell made her money the old fashioned way - by marrying it. She sure couldn't write for a living.

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Don Bauder March 23, 2009 @ 6:54 p.m.

Response to post #25: A lot of the mysteries about the U-T -- columnists who can't write, department editors with little knowledge of the area they supervise -- are a result of something I have talked about before: decisions at that company are made on the basis of personal friendships. Skill, productivity and such factors are minor factors. Best, Don Bauder

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PaperGirlSD March 26, 2009 @ 8:59 a.m.

Wow, no UT stories for a week. Are your internal sources not leaking or are they leaking information that is just not caustic enough to be blog worthy?

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Don Bauder March 26, 2009 @ 12:02 p.m.

Response to post #27: There is no new information that is ready to be released at this time. More homework is being done. As to the U-T: the employees are frozen in fear. Black mistakenly said that the U-T missed the rounds of layoffs that other papers have endured. Therefore, he said, there will be deep cuts. No doubt he is seeing what cuts make sense for the survival strategy he has selected, or will select (in consultation with Platinum). Best, Don Bauder

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PaperGirlSD March 26, 2009 @ 3:44 p.m.

Response to post #28: Where did you hear/read this Black statement? I have been following this story closely and this is the first I've heard it.

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Don Bauder March 26, 2009 @ 9:41 p.m.

Response to post #29: He was interviewed by some publication early on and made that statement. I can't remember which publication it was, but I definitely recall his words. Best, Don Bauder

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PaperGirlSD March 27, 2009 @ 8:46 a.m.

First of all, even if he did say that, you are speculating as to his meaning. Second, I can't believe you are quoting him without anything to back it up. I suppose making things up to make your blog more interesting to the few who read it is your MO.

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kernowboy2004 March 27, 2009 @ 9:15 a.m.

The UT Employees are not frozen in fear, that is a lie. If Don saw a half full glass he would say it was three quarters empty.

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WhatGoesAround March 27, 2009 @ 10:10 a.m.

In answer to PaperGirlSD, the following is an excerpt from the Union-Tribune sale story that ran on SignOnSanDiego and was written by reporter Thomas Kupper on March 18, '09.


Black said in an interview that he would be on an operations committee for the paper but does not expect to have an office in San Diego or take a day-to-day role in management. He added that, given weakness in the industry, there would be some degree of “reorganization and severances.”


That sounds like further job losses to me.

Anyone care to spin this one?

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HellcatCopley March 27, 2009 @ 10:53 a.m.

My insiders say that frozen is too soft a term -- petrified might be better. So far the new owners are not communicating with the old employees about anything. There is an information vacuum there.

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Don Bauder March 27, 2009 @ 11:30 a.m.

Response to post #31: I am not making it up; I told you that I remembered the statement specifically. I am sure I could dig it up, if I have time. Best, Don Bauder

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Don Bauder March 27, 2009 @ 11:42 a.m.

Response to post #32: This reminds me of the old adage: "If everybody around you is losing their heads, but you remain calm....maybe you don't understand the situation." Best, Don Bauder

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Don Bauder March 27, 2009 @ 11:43 a.m.

Response to post #33: Right, and the U-T was stating it euphemistically, to put it mildly. I see I will have to dig up those Black quotes. Best, Don Bauder

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Don Bauder March 27, 2009 @ 11:45 a.m.

Response to post #34: I believe your insiders have a better view of things than those whom PaperGirl and Kernowboy purportedly speak for. Best, Don Bauder

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Don Bauder March 27, 2009 @ 12:08 p.m.

HERE IS THAT BLACK QUOTE ON COMING U-T PERSONNEL CUTS: I found the quote by David Black that PaperGirlSD challenged. It was in the Wall Street Journal March 19, the day after the announcement. Said the Journal, "Mr. Black said he will have to cut costs to hep offset the bleak newspaper revenue outlook. 'In this case the paper [U-T] hasn't had [cuts] as of the sale process and a whole lot of papers have,' Mr. Black said. 'There is some catch-up there.'" The meaning couldn't be clearer. Best, Don Bauder

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PaperGirlSD March 27, 2009 @ 2:05 p.m.

I found it on wsj.com. Looks like you did not misquote. :-( Bad news for the 1050 loyal.

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Shadow March 27, 2009 @ 3:07 p.m.

I'm guessing the closest PaperGirlSD gets to the real U-T is when she chucks it into the driveway... or the bushes...

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Don Bauder March 27, 2009 @ 3:18 p.m.

Response to post #40: There are other stories, including in the Canadian press, showing how Black makes fast and deep cuts in taking over a paper. The Akron Beacon-Journal is an example. Best, Don Bauder

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PaperGirlSD March 30, 2009 @ 11:12 a.m.

Response to #34 - I suppose you must work in Editorial. I truly do worry for your department. I hope all works out for you. I heard from someone in management that they are not "allowed" to tell anything. Of course, they could say that to everyone so you could breathe out. Hang in there!

Response to #38 - I am on the inside... just not in Editorial. I think that is where the fear is brewing.

Response to #41 - I help put the U-T out every day. Why don't you get a job making a difference and see if you feel ownership and pride in what you do. Maybe that will make you less bitter.

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Don Bauder March 30, 2009 @ 11:59 a.m.

Response to post #43: I truly appreciate your optimism. I really do. You must be a cheerful person to work around. I do feel, however, that for your own sake you should look at this realistically. There have already been many layoffs and buyouts at the U-T. Yet the individual who will lead the editorial effort, whose own company (Black Press) is doing poorly, erroneously says that the U-T has missed the personnel cuts of other papers, and has some catching up to do. It makes economic sense for Black to try to put out both SignOnSanDiego and the paper with many fewer people, so he can move the company to a cheaper location and try to cash in on the real estate, which has value. (This won't be his decision alone; it will depend on how quickly Platinum, which put up most of the money, wants a payback.) However, this solution may have to wait until the real estate market recovers, and that could be a long time. Meanwhile, keep up your cheerfulness. Best, Don Bauder

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HellcatCopley March 31, 2009 @ 7:14 a.m.

Karin Winner explaining to employees that the paper's purchase by a private equity group is a "terrific thing": http://img257.imageshack.us/img257/7205/winocci.jpgvv

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SurfPuppy619 March 31, 2009 @ 8:10 a.m.

Response to #41 - I help put the U-T out every day. Why don't you get a job making a difference and see if you feel ownership and pride in what you do. Maybe that will make you less bitter.

By PaperGirlSD

LOL...PaperBabe laying on smackdown of her own!

PGSD, what dept. do you work in??? Are YOU worried about YOUR job.

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SurfPuppy619 March 31, 2009 @ 8:11 a.m.

http://img257.imageshack.us/img257/7205/...

By HellcatCopley

HC-you are the MASTER of todays Photoshop contest!

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PaperGirlSD March 31, 2009 @ 9:53 a.m.

Response to #47 - In this economy, I'm worried. But I am the master of my fate and know that even though I would be sad not to be here with my family, I would be fine. Folks who have done the same manual process or who work in editorial would most likely have to move or choose a new type of work. I'm in the kind of niche you can do anywhere, which is why I don't worry as much.

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Don Bauder March 31, 2009 @ 12:46 p.m.

Response to post #45: I'm not sure the announced purchase -- not yet consummated -- will prove to be a "terrific thing" for anybody. Platinum gets the assets at an extremely low price -- $15 million to $45 million -- but it gets a newspaper that is either losing money or breaking even. The numbers are almost certain to sink more as the employee count drops and the product worsens. The real estate came cheap, but a slumping newspaper and online operation weigh down the value of the assets unless the building can be vacated and sold. And the commercial real estate market is very soft. It's a terrific thing for David Copley to get out from under the responsibility of owning a newspaper (which he never wanted), but he got very little money. Black Press gets to run a large newspaper, but that will be a tough test of its managerial skills -- no terrific thing. Employees definitely do not get a terrific thing. Best, Don Bauder

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Don Bauder March 31, 2009 @ 12:49 p.m.

Response to post #46: The expression on her face does not connote "terrific thing." Best, Don Bauder

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Don Bauder March 31, 2009 @ 12:51 p.m.

Response to post #47: Got me again. What does PGSD stand for? Best, Don Bauder

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Don Bauder March 31, 2009 @ 12:57 p.m.

Response to post #48: We have already awarded that prize to Hellcat. Best, Don Bauder

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Don Bauder March 31, 2009 @ 1 p.m.

Response to post #49: You're fortunate. The people with editorial skills -- writing, reporting, editing, etc. -- not only can't get jobs in SD, they can't get them anywhere, with some exceptions. Best, Don Bauder

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SurfPuppy619 April 1, 2009 @ 12:20 p.m.

What does PGSD stand for?

PGSD= PaperGirlSD

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Don Bauder April 1, 2009 @ 1:52 p.m.

Response to post #56: Damn. My stupidity. I thought it was another LOL. Best, Don Bauder

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