New York Times threatens to shut Boston Globe
The New York Times Co has threatened to shut The Boston Globe unless the newspaper's unions quickly agree to $20 million in concessions, the Globe reported on Friday, quoting union leaders.
The union officials said executives from the Globe and the Times, which owns the Boston newspaper, made the demands on Thursday morning in a meeting with leaders of the newspaper's 13 unions, the Globe reported.
If the Globe closed, it would join a growing list of big city dailies that have shut down this year, including EW Scripps Co's Rocky Mountain News and the print edition of Hearst Corp's Seattle Post-Intelligencer. Hearst's San Francisco Chronicle might join that list.
Possible concessions at the Globe, the 14th-largest U.S. daily paper by weekday circulation, include pay cuts, the end of pension contributions by the company and the elimination of lifetime job guarantees for some veteran staff, the paper said, quoting Boston Newspaper Guild president Daniel Totten.
The guild is the Globe's biggest union, representing more than 700 editorial, advertising and business office employees, the report said.
"Management told union leaders Thursday that the Globe will lose $85 million in 2009, unless serious cutbacks are made, according to a Globe employee briefed on the discussions," the Globe report said. That compares with an estimated $50 million loss last year, the newspaper quoted the employee as saying.
"The ad revenues have fallen off the cliff," the Globe quoted Ralph Giallanella, secretary-treasurer of the Teamsters Local 259, as saying. "Just based on everything that's going on around the country, they're serious." His union represents about 200 drivers who deliver the paper.
Giallanella and Globe executives could not be reached by Reuters. A Times spokeswoman declined to comment. Totten was not immediately available for comment.
The Times sought the concessions because it can no longer subsidize the Globe's losses, the report said, quoting the Globe employee, who requested anonymity because the person was not authorized to speak publicly.
The threat comes as a host of U.S. newspaper publishers have reduced staff, declared bankruptcy or shuttered newspapers to cope with a recession that has squeezed advertising revenues and with a new era in which readers seek news online.
Many U.S. newspapers have lost 20 percent or more of their advertising revenue as more people get news online for free.
Earlier this week, the Boston Globe completed cutting the equivalent of 50 full-time newsroom jobs.
Separate media reports have said that the Times may try to sell the Globe to drum up cash to pay off debt. As recently as two years ago, the Globe was considered to be worth more than $500 million. The Times bought it in 1993 for $1.1 billion.
A report late last year by Barclays Capital pegged its value as low as $20 million.
Boston and the surrounding area has not proven to be a good investment for the Times. The Telegram-Gazette in Worcester, which the Times also owns, has been dealing with falling ad revenue like most U.S. papers.
The Times also is trying to sell its stake in the holding company that owns the Boston Red Sox Major League Baseball team as a way to raise money to pay off debt.
It has taken other measures including selling its stake in its New York headquarters and borrowing from Mexican billionaire Carlos Slim, who owns a large stake in the Times.
The company also is awash in widespread media speculation that the Ochs-Sulzberger family, which has controlled it for more than a century, could sell the Times.
The Boston Globe, the most widely circulated daily in Boston and New England, was founded in 1872 and privately owned until 1973, when it went public as Affiliated Publications.
On March 26, The New York Times and the Washington Post, two of the most respected U.S. newspapers, said they were cutting costs further in the face of dramatic declines in advertising revenue.
The Times said it laid off 100 workers and is cutting non-union salaries. It is also asking unionized employees to accept similar concessions to avoid layoffs in the newsroom.
Non-union employees at the New York Times and the Boston Globe would get a 5 percent pay cut for nine months, along with 10 days off, the Times said. At other units, including the company's Worcester, Massachusetts, newspaper, the amounts would be a 2.5 percent pay cut and five days off.
[Source: By Jason Szep and Robert MacMillan, Reuters, Boston and NY, 03Apr09]
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