- The Washington Times - Thursday, September 14, 2006

From combined dispatches

The Pittsburgh Post-Gazette’s owners gave the newspaper’s unions a Dec. 31 deadline to reach a deal or face the prospect of a sale.

The paper has lost almost $23 million since 2003 and will lose money again this year, the company said yesterday. It said unions representing about 1,100 workers “have not responded substantively” to contract proposals.

A sale may be forced if the 220-year-old newspaper’s unions don’t let it reduce its costs, the company said, adding that it has lost money in seven of the past 13 years. The company cited a study that found that employee costs represent 70 percent of revenue, compared with 40 percent for other newspapers of its size. It said the newspaper industry faces “enormous challenges” from the Internet, television and other media.

“The Post-Gazette’s financial condition reflects, more than any other factor, the failure of the current labor contracts to address the issues of rapidly rising costs and declining revenue,” said David Beihoff, Pittsburgh Post-Gazette president. The company said it needs the unions to agree to job cuts and changes in work rules.

A Teamsters representative said employees have been willing to negotiate on job cuts, work rules and health care costs. He said the newspaper’s owners seem more intent on breaking the unions then on reaching an economic agreement.

“We told them up front that we will give you the concessions necessary to make this paper profitable, even if it means cutting jobs,” said Joseph Molinero, director of the International Brotherhood of Teamsters Newspaper and Electronic Media Conference. He said the unions were willing to accept “tens of millions of dollars” worth of cost cuts.

The unions are unwilling to accept demands that would restrict their rights to picket the company.

The Post-Gazette is owned by Block Communications, which also owns the Blade of Toledo, Ohio, where the company is engaged in a bitter battle with its unions.

Most of the Blade’s labor contracts expired in March and about 200 workers there, including engravers and drivers, have been locked out and replaced by temporary workers.

In Texas, the Dallas Morning News said yesterday that 111 employees would accept buyouts.

Jim Moroney, publisher and chief executive officer of the paper, estimated the buyout would cost about $6.7 million in severance payments. Annual savings, he added, would be about $9.9 million is savings in compensation and benefits.

It was not the first vetting this year. Robert W. Decherd, chairman and chief executive officer of the Belo Corp., parent of the Dallas Morning News, said more than 200 positions within the organization had been eliminated so far this year, though 30 employees had been reassigned to Internet-related roles.

The severance package amounted to a year’s base pay plus a lump-sum payment to handle health care for a year.

Meanwhile, the chairman of the New York Times Co, is taking a pay cut for the next two years with his cousin, the vice chairman of the company, to create a bonus pool for employees, the Times said in a regulatory filing yesterday.

Arthur Sulzberger Jr. and Michael Golden told employees in a letter that their plan to forgo stock-based compensation for two years — which they described as a personal decision — would result in about $2 million becoming available for payments to reward exceptional performance by staffers who don’t participate in the Times’ annual bonus plan.

The first round of bonuses would be distributed in February, with a similar amount being paid out the following February, they said.

Last year Mr. Sulzberger and Mr. Golden received restricted stock awards and stock options valued at $2.2 million, according to the company’s proxy statement.

Mr. Sulzberger earned a salary of $1.1 million and a cash bonus of $560,521, while Mr. Golden had a salary of $608,960 and a bonus of $233,536.

Hugh Aynesworth contributed to this report from Dallas.

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