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About 50 Copley Press employees, anxious to be first in line to get forms for the latest buyout, camped out last night in the U-T lobby in Mission Valley, sleeping on the floor, cots, couches, and futons. Today (Sept. 2) was the first day that employees could fill out forms, beginning at 8:30 a.m. Some had been in the lobby for two days. At least 150 were lined up this morning before 8:30 a.m. It was important to be early in line because when employees will be selected for the buyout Sept. 11, requests will be considered on a first-come, first-served basis, according to the buyout announcement of Aug. 28. In the buyout, employees electing to leave the company will get an amount equal to two weeks of base pay for every year of continuous employment up to 52 weeks. In late July, Copley announced that it is putting the company up for sale. Employee rumors currently run the gamut: some hold out hope that a buyer will come in and try to make the Union-Tribune into a responsible news organization. Others believe an asset stripper will come in, sell off the physical assets, whack employment, and try to milk the paper for a few years, then liquidate it. Despite a lot of bitterness, some employees believe that owner David Copley did not have to make this latest buyout offer; he could have left the head-chopping to the new owner, or could simply have laid off employees without any buyouts.

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Comments

Ponzi Sept. 2, 2008 @ 12:08 p.m.

I read they aim to cut its staff by 76 positions, including 30 in the newsroom. Or could it be more if they honor 150 or more applications for buyout?

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JohnnyVegas Sept. 2, 2008 @ 3:01 p.m.

I am pretty sure David Copley has a buyer for the paper and the buy out is contingent on reducing expenses through payroll.

My question to Don is this-has there been any large daily paper in an major market that has filed BK or been liquidated within the last 5 years??? If yes-were they the only daily paper in town like the UT??

I just cannot see someone buying the paper just to shut it down. San Diego is a major market and if the ONLY daily closes down that would leave a HUGE gap in the market. Just does not add up or make sense.

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Don Bauder Sept. 2, 2008 @ 3:55 p.m.

Response to post #1: As I understand it, it could be more than originally announced. The company lists 77 positions that are eligible for the buyout, 30 in the newsroom. However, the company does not warn this time that if it doesn't get the voluntary buyouts, it will chop heads to make its bogey. My guess is that when it did that last time, it lost some arbitrations of people who took the buyout, but filed for unemployment and got it (after a fight) on the grounds that the buyout was really a layoff. This time, such verbiage is left out. Best, Don Bauder

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Don Bauder Sept. 2, 2008 @ 4:02 p.m.

Response to post #2: I have seen announcements about small papers closing up shop completely, but I have seen no large metro dailies leaving a market vacant. However, it could happen if some city has sufficient online capability that a daily print medium is not needed. I could see a new buyer dropping the Monday and Tuesday editions of the U-T, say, and making deep employment slashes -- e.g., having national and international matters (including the current election) covered only by NY Times, AP, Washington Post reporters, etc. It appears that Copley intends to eviscerate or shut down altogether the Washington and Sacramento bureaus, which have already been cut deeply. Best, Don Bauder

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anon5 Sept. 2, 2008 @ 9:15 p.m.

Don, How were you able to count those 150 people? Were you in town? My guess is no. The only option is that your source is an employee who is totally embellishing. They are completely crushing your credibility for all those who like your column and could clearly count. So, I really think you should start to question your sources a little better. Or, you should get a new source. They are way off. Perhaps you should name them? I sat in that line for over 3 hours. I can promise you that there werent even 100 people in line.

Meanwhile, I think my buyout will be accepted and I will be very thankful for the nice payout from the company.

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Don Bauder Sept. 2, 2008 @ 9:25 p.m.

Response to post #5: My initial source, who is reliable, estimated that 50 spent overnight and 150 were in the line at 8:30 a.m. Later, other sources agreed. I have no reason to suspect that they were overstating the number of people in line. I hope you get your buyout; you will notice my post noted that some employees thought David Copley could have simply chopped heads and not offered a buyout. Those employees thought he deserved praise. That is hardly a unanimous sentiment, however. Best, Don Bauder

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classico Sept. 2, 2008 @ 11:12 p.m.

Don,

I have heard that many of the Copley buyout "victims" of the past few years were offered extended (like until age 65) medical benefits. Any idea what might happen to those promises?

One other question: Is The Copley Press selling the U-T? Or is The Copley Press selling The Copley Press? News stories on this have been rather vague. Might The Copley Press (and what's the difference between that and David Copley?) continue to exist as David's personal piggy bank?

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Don Bauder Sept. 3, 2008 @ 6:27 a.m.

Response to post #7: 1. Employees who take the current buyout offer get free medical, dental, and vision coverage for themselves and their families for three months. After that, they can buy coverage. The coverage they can buy is quite expensive. 2. In essence, all that's left of Copley Press is the U-T and the Borrego Sun, which comes out every two weeks and is a tiny part of the whole. So, basically, Copley Press IS the U-T. Since last year, the company has sold its Ohio and Illinois papers, Copley News Service, and Casa del Zorro resort in Borrego Springs. Best, Don Bauder

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Anon92107 Sept. 3, 2008 @ 6:31 a.m.

Don, for many years you have been exposing dishonorable and immoral practices of U-T owners, editors and managers. One wonders why anyone would want to work for such a corporation at all, especially when the U-T has corrupted San Diego politics so hellaciously with consequences of death and destruction.

But then, I must also ask why do We The People put up with a culture of dishonor and immorality that runs our federal, state and local governments that have caused so much death and destruction.

The truth is that We The People and the Fourth Estate have created the worst governments in the history of civilization and we can expect the same consequences that have occurred so many times before.

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Don Bauder Sept. 3, 2008 @ 8:32 a.m.

Response to post #9: There will be new U-T owners, editors, and managers. The question is how soon. Best, Don Bauder

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classico Sept. 3, 2008 @ 9:56 a.m.

Don,

Regarding the extended medical benefits I mentioned in #7, I wasn't referring to the latest buyout, but rather to those in early 2007 and before, around the time Copley was selling off its Midwest papers. Some of the buyouts at that time were at Midwest papers.

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Don Bauder Sept. 3, 2008 @ 10:25 a.m.

Response to post #11: The late 2006-early 2007 buyout involved people who had been there at least 30 years. My recollection is that they got medical coverage until they reached 65 (Medicare), but that wasn't a huge amount because most were close to that in age. Best, Don Bauder

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Anon92107 Sept. 3, 2008 @ 11:04 a.m.

Response to post #10: OK, next question, the way things are going can the new owners, editors and managers be expected to be even more dishonorable and immoral than the ones you had to work for that have gotten even worse since you retired?

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JohnnyVegas Sept. 3, 2008 @ 11:21 a.m.

The UT must honor any prior contract regardless of who buys the paper. They are on the hook, so new owners cannot come in and say we won't honor any prior contracts.

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Don Bauder Sept. 3, 2008 @ 4:04 p.m.

Answer to post #13: How can this question be answered if we don't know who will buy, if anybody? Best, Don Bauder

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Don Bauder Sept. 3, 2008 @ 4:07 p.m.

Response to post #14: Of course, any new buyer takes on baggage from the previous administration. Best, Don Bauder

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Don Bauder Sept. 3, 2008 @ 9:28 p.m.

Post #17: Here are latest U-T circulation numbers: daily circulation for July was 269,178, down from 278,065 for July of last year. For the week ending 8/10/08, daily circulation was down to 266,253. Sunday fell to 341,051 in July of this year from 356,437 for the same period in 2007. Remember, when the U-T announced it was for sale in late July, it was saying its daily circulation exceeded 300,000 -- a gross misrepresentation. Use of SignOnSanDiego did improve this July from the year previously. Best, Don Bauder

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Don Bauder Sept. 3, 2008 @ 9:41 p.m.

Response to post #11: I have the answer for you. Those with 30 years of service who took the 2006 buyout were promised that Copley Press would pay 75 percent of their medical insurance costs until they were 65 and eligible for Medicare. They pay the remaining 25 percent of the insurance tab until age 65. Some are a little bit uneasy about this arrangement with all the uncertainty these days. Best, Don Bauder

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HellcatCopley Sept. 4, 2008 @ 2:05 p.m.

New owners may or may not have to honor contracts. It depends on how a deal is structured. For example, a new owner could buy only certain assets of the UT and leave any liabilties on Copley Inc's books. Copley Inc could then file BK and fades away into the sunset of San Diego history.

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Shadow Sept. 4, 2008 @ 4:13 p.m.

This is a somewhat selfish question, but I figured one of you would have the answer. With the future of the U-T in doubt, what happens to employees who served a long enough sentence to rate a pension upon retirement, but who left before retiring and still haven't reached official retirement age? That is, if the company goes belly up before we're old enough to get the payout, what then? Thanks for any advice...

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classico Sept. 4, 2008 @ 5:57 p.m.

19: Interesting (and maybe plausible) scenario. I know for a fact that at least some of the buyout agreements at Copley's Midwest papers were guaranteed by the individual papers, not Copley. But these obligations were not transferred to GateHouse in the sale and became Copley's obligations.

20: The Pension Benefit Guarantee Corporation should be involved in protecting the pension fund. Not sure it would cover all obligations dollar for dollar, though. The pension should be a lot safer than other benefits, though.

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Don Bauder Sept. 4, 2008 @ 9:01 p.m.

Response to post #19: Oh yes, any new buyer can only buy some of the assets. But I don't know that Copley could sell some assets, go into BK and unload the pension obligation on the federal government. There are specific laws and precedents on that. Best, Don Bauder

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Don Bauder Sept. 4, 2008 @ 9:04 p.m.

Response to post #20: That is the big question that I get more than any other. Under the law, they should be entitled to what they have coming. But what happens if Copley claims it has no money? David certainly has assets beyond the newspaper. Best, Don Bauder

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Don Bauder Sept. 4, 2008 @ 9:07 p.m.

Response to post #19: I am not aware that GateHouse did not pick up the pension obligation. I do know that Copley assumed the pension programs of those papers it bought, and managed those pension programs. Best, Don Bauder

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Don Bauder Sept. 4, 2008 @ 9:10 p.m.

Response to post #20: The PBGC does not assume obligations dollar for dollar. Highly-paid employees get a significant haircut if the company goes under. Someone expecting a $200,000 annual retirement might get cut back to $65,000, for example. You are correct that pension benefits are in line in front of other creditors in most cases, as I understand it. Best, Don Bauder

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Visduh Sept. 5, 2008 @ 8:31 a.m.

If anyone is wondering what these staff reductions and other expense cutting will do to the already dismal quality of the U-T, take a look at the Business section from this past Tuesday, 9/2. The usual, tiny four page section (with the back page mainly given over to weather) had five articles. Their sources were The New York Times News Service, The Washington Post, and Associated Press (three times). Not a single locally-written piece! Yet one of the articles did involve Qualcomm.

And this is from a paper which once presented itself as a businessman's/woman's newspaper. Its business reporting was always sketchy and generally weak--partly because the editorial policy was to avoid anything embarrassing to the local establishment. This next round of cuts will surely finish off any pretense of the U-T being a real journalistic enterprise.

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Don Bauder Sept. 5, 2008 @ 9:34 p.m.

Response to post #30: Can't agree on Chrysler. GMAC: big problems. Best, Don Bauder

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JohnnyVegas Sept. 5, 2008 @ 11:46 p.m.

Well, today the first major city fell to BK under unsustainable FF and cop pay and pensions.

I expect several other CA cities and counties to follow suit very soon, including San Diego City, San Diego County, Orange County, Chula Vista and Oakland.

http://www.caeb.uscourts.gov/data/cortinfo/opinions/localopinions/mcmanus/in%20re%20city%20of%20vallejo,%20case%20no.%2008-26813.pdf

BOOM!

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Don Bauder Sept. 5, 2008 @ 12:10 p.m.

Response to post #26: I will give you some history on this topic. I was financial editor of the Union from 1973 to the merger in the early 1990s, then financial editor of the U-T for a few years until administrative authority was taken away from me some time in the mid-1990s. I did a lot of tough reporting on local business (particularly scams), and gave encouragement and backing to some excellent writer/reporters such as Craig Rose who did strong journalism on such topics as biotechs and utilities. Admittedly, our coverage wasn't as tough as it should have been, but it was very good in comparison with similar papers and compared well with much larger papers. The biotechs and techs screamed about the tough reporting, and kept screaming even after their stocks crashed in 2000-2002. Top management invariably sided with local business, unfortunately. I had some monumental battles with the top editors, who always functioned more like PR men and lobbyists for local business than like editors. After I retired in early 2003, the section went soft. That was mandated by top management. However, reporters like Rose kept doing honest journalism. (He is gone, having taken the 2007 buyout. He is now working for Mike Aguirre.) There are even a couple of good reporters in the U-T business section now. I won't mention their names, lest they get in hot water. Clearly, the section is not good; the biggest reason is that, like the rest of the paper, its size and staff have been shrunk. But, unfortunately, it has become a cheerleader for local business, and is therefore unreliable. Best, Don Bauder

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JohnnyVegas Sept. 5, 2008 @ 2:21 p.m.

New owners may or may not have to honor contracts. It depends on how a deal is structured. For example, a new owner could buy only certain assets of the UT and leave any liabilties on Copley Inc's books. Copley Inc could then file BK and fades away into the sunset of San Diego history.

19: Interesting (and maybe plausible) scenario. I know for a fact that at least some of the buyout agreements at Copley's Midwest papers were guaranteed by the individual papers, not Copley. But these obligations were not transferred to GateHouse in the sale and became Copley's obligations.

==== ======

If Copley sold the paper and retained the pension liability and declared BK that would be a fraud, and that is simply not going to fly in court. BTW-fraudulent debts cannot be discharged in BK.

So unless David Copley and any potential new owner wants to end up in court with their personal assets on the line I would advise against it.

In fact a very similar buyout situation is in court right now between Mervyns and the two Private Equity Firms who bought Mervyns out-and pulled a similar switcharoo.

The courts are simply not going to allow someone to take all the assets and then BK liabilities.

http://www.latimes.com/business/la-fi-mervyns5-2008sep05,0,6636354.story

Mervyns accuses ex-owners of causing its bankruptcy The department-store chain says it was stripped of valuable real estate, which was later leased back at higher rents. That 'led to Mervyns' bankruptcy,' the firm claims in a lawsuit.

The $1.2-billion acquisition of Mervyns by a group of investors led by Sun Capital Partners Inc. and Cerberus Capital Management was a "fraudulent transfer," according to the suit filed Tuesday in federal Bankruptcy Court against 37 defendants.

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Don Bauder Sept. 5, 2008 @ 5:55 p.m.

Response to post #28: Cerberus has other, bigger problems. I'll name two:Chrysler and GMAC. Best, Don Bauder

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JohnnyVegas Sept. 5, 2008 @ 7:21 p.m.

Cerberus got Chrysler at a decent price-plus they have Toyota North Aerica's top executive to run it. I expect Chrysler to turn around.

GM is another story.

You do know GM owns Di-Tech mortgage don't you Don??? GM made more money off of mortgages from 2002-2006 than they did cars.

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JF Sept. 6, 2008 @ 10:52 a.m.

Major city? The 45th largest city in CA?

Couple of interesting things about this bankruptcy. Union firefighters voluntarily took a almost 8.5% pay cut. Management took a 3% pay cut.

Vallejo is by no means a major city, nor are it's finances similar to San Diego's.

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JohnnyVegas Sept. 6, 2008 @ 11:53 a.m.

JF, Vallejo IS a major city and this is a landmark case.

The entire country was looking at Vallejo and what would happen- and now we know. And since BK Court is a federal court and what happens in a BK Court in Sacramento will have precedent at every BK Court in the country.

BTW, the Chapter 9 BK for municipalities, it is a cash flow BK, not an asset/liability BK, so if San Diego files BK then all city property and other assets are fully protected-read the 52 page decision.

Good reading, and you might actually learn a thing or two about the law.

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Don Bauder Sept. 6, 2008 @ 2:04 p.m.

Response to post #32: Watch to see what the stock market does. Best, Don Bauder

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Don Bauder Sept. 6, 2008 @ 2:07 p.m.

Response to post #33: Yes, but the FFs had such high rates of pay and fringes. They deserved bigger cuts. Best, Don Bauder

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Don Bauder Sept. 6, 2008 @ 2:11 p.m.

Response to post #34: I agree this could be a precedent-setting case. Best, Don Bauder

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Ponzi Sept. 7, 2008 @ 6:12 p.m.

The SDUT Sunday classified Jobs ads was one newspaper sheet, or "four" pages. But it was really only two pages of classified ad after the front page "career" article and the full back page ad promoting "Hospitality" and all the high paying, family wage restaurant, hotel, casino a resort jobs.

Take out the quarter page ad recruiting for the California Prsion Healthcare system and I can see why we, the San Diegans and the SDUT have a problem. Our job market is only growing in the low paying service and high paying prisons sectors.

I don't know what percentage of reveniew the classified used to bring to the San Diego Union, but I do recall the help wanted ad being dozens of pages. So not only are the jobs vanishing, the ad revenues are too.

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Don Bauder Sept. 7, 2008 @ 7:37 p.m.

Response to post #38: The shrinking of U-T classifieds is not necessarily a reflection on the San Diego economy. Craig's List is taking ads from print media all over the country. Best, Don Bauder

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JohnnyVegas Sept. 8, 2008 @ 8:11 a.m.

The LA Times "Sunday Jobs" classified, which used to be 10-15+ pages, is now basically 2 full page, or four half pages with advertiements.

Pretty shocking.

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Don Bauder Sept. 8, 2008 @ 9:02 a.m.

Response to post #40: There are two factors in LA, San Diego, and elsewhere: 1. Craig's List taking ads from metro dailies; 2. The weak economy. There are fewer jobs almost everywhere. Best, Don Bauder

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classico Sept. 10, 2008 @ 9:35 p.m.

I hope you're wrong, tnt. How many lawsuits will this trigger? My own recent contacts with U-T HR about this have been a stone wall.

Thanks for sharing the information. And keep us informed.

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Don Bauder Sept. 11, 2008 @ 7:17 a.m.

Response to post #45: Stock of GateHouse Media, which bought the Ohio and Illinois papers from Copley, is selling for 55 cents a share this morning (Sept. 11). Best, Don Bauder

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tnt Sept. 10, 2008 @ 3:37 p.m.

I was in the Christmas Massacre, & my group (+20yrs w/UT, +60yrs old)was offered severance and: medical dental & vision pd in full by UT for 6 months. Then we could switch dental and/or vision to COBRA if we paid for all of it, & our medical would continue until 65/Medicare, with the U-T paying 3/4 of the premium cost & the retiree paying 1/4 (slightly less than $100. a month in my case). The HR people emphasized what a great deal this was, although I'm now sure, looking back, that at least 1 of them knew the paper would soon be for sale. I called a HR person who has been helpful & fair with me and he/she said David would pay the 3/4 until the sale was final, then it was up to the new owners. I still have all the paperwork, & it sure sounds like a flat promise with no caveats. Most of us can't afford $400. a month. This may or may not be legal, but if they strand people who worked hard over 20 yrs.for them, without medical ins. they had counted on, it's sure not ethical.

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Don Bauder Sept. 10, 2008 @ 4:13 p.m.

Response to post #42: This is typical of the calls and emails I am getting from people who have already left or are contemplating departing in the current buyout. People are obsessed with pensions and insurance. I don't know the answer to your question. I suggest you send a note to the HR person whom you trust and try to get that person to say in writing what he/she said to you verbally. Make the note like this: "I asked you the other day about whether David Copley would cover 3/4 of my medical expenses if the company were sold. I'm not sure I heard it correctly. Could you tell me what the company would do when or if the company is sold before I reach 65?" See if you get a written response. You may need it. Best, Don Bauder

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classico Sept. 10, 2008 @ 10:04 p.m.

tnt, was your deal a buyout or just an offer to get retiree rates on health coverage? Don't know if it would make a difference. Maybe in court.

I wonder how many retirees in Illinois and Ohio read the Reader to get info on what's left of Copley. Might be a good place to organize the class action if Copley craps on the people who paid for Happy Days.

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Don Bauder Sept. 11, 2008 @ 7:14 a.m.

Response to post #44: I have talked with some people who claim they are talking with lawyers. However, I don't know that they have cases. Best, Don Bauder

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Merrilee Sept. 19, 2008 @ 9:24 a.m.

Braun did not take the buyout. He wanted it, but was turned down. (Even if you got in line early, there was no guarantee you'd get a buyout because HR had to determine whether your position was "non-essential.") Don't cry for Gerry, though...he already has a job working for Mayor Sanders and rumor has it that he'll get a very nice salary.

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