Paper Cuts: 'New York Times' Union Agrees
In another sign of the dire situation facing American newspapers, the Newspaper Guild in New York City agreed to a 5% cut in salary for members at The New York Times, clearing the way for reductions that will affect newsroom staff and a number of other salaried professionals. The pay cut is meant to be temporary -- ending Dec. 3 -- but given current revenue trends, may become permanent.
The union faced a choice between the pay cut and the loss of 80 jobs in the newsroom and elsewhere -- an increasingly common dilemma as newspaper executives force hard choices on unions around the country.
Earlier this month, NYTCO threatened to close The Boston Globe if it can't extract concessions -- including pay cuts, cutting or eliminating contributions to retirement and health plans, and layoffs, that equal up to 20% of the current payroll. Half of this is expected to come from the Boston Newspaper Guild, with the other half coming from the remaining 12 unions.
NYTCO has already cut the salaries of non-unionized employees at its flagship paper, as bad financial news is followed by worse.
In the first quarter of 2009, the company's ad revenues plunged 27% compared to the same period in 2008, management revealed last week, declining from $458.3 million to $334.6 million. The revenue declines, which exceeded analyst expectations, were spread across all the main advertising categories.
This includes Internet ad revenues -- a bright spot in years past -- which posted a 6.1% decline, from $72 million to $67.6 million. In discussing the first-quarter results, NYTCO CEO Janet Robinson warned that the second quarter could see an advertising revenue decline of up to 30%.
With a $400 million credit payment looming in May, NYTCO has been scrambling to raise money to keep its core business afloat, resorting to extraordinary measures, including the sale of its new headquarters in Manhattan.
It has also put its Boston Red Sox franchise up for sale -- so far sans takers -- and won about $400 million of new investment from Carlos Slim, a Mexican billionaire with ties to the corrupt former president of Mexico, Carlos Salinas.
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