The latest local casualty of the crisis in the newspaper industry: Jobs and wages at the Kingston-based Daily Freeman, whose corporate parent, the Journal Register Company (JRC), is emerging from bankruptcy for the second time in four years.
In February, the JRC went on the bankruptcy auction block, and was sold for $122.15 million to the sole bidder: A group called 21st Century CMH Acquisition Co., a subsidiary of former JRC owners Alden Global Capital. In a bit of corporate sleight of hand, the ailing news chain's owners were able to shed debt and obligations to workers through the bankruptcy process, then essentially buy the business back again.
In a recent story, Kingston Times reporter Jesse Smith reports that the JRC's corporate owners have effectively laid off the entire staff of the Freeman, and invited them to reapply for their old jobs with steep paycuts and no union representation:
JRC employees at seven newspapers in Kingston and the Philadelphia and Detroit areas are currently represented by The Newspaper Guild, a 32,000-member union under the umbrella of the Communications Workers of America. Shortly after the acquisition, JRC employees, including staff at the Freeman received a letter essentially laying them off and inviting them to reapply for their positions under new conditions. The letter starts by informing the “potential candidates” that that the new terms include “at will” — non-union — employment, a 15 percent cut in wages, an end to employer contributions to the company’s 401(k) retirement plans and a provision that employees will pay 50 percent of their health insurance premiums.
The Times Herald-Record -- a Freeman competitor that has been making inroads into the Freeman's Ulster County territory in recent years -- reports, in a story about ongoing negotiations between the union and managment, that CMH Acquisition Co. intends to eliminate four copy editors, four clerks and three district circulation managers at the newspaper.
According to union representative and Freeman reporter Patricia Doxsey, the Freeman's owners also want to shut down the printing press at the Troy Record -- which has been printing the Freeman since its Kingston press was shut down in 2010 -- and outsource printing to the Albany Times-Union.
If adopted, the plan to outsource the Freeman's printing would also mean another move for the Arkville-based Catskill Mountain News, an independent weekly that prints on the Journal Register Company's presses, and moved with the Freeman to the Troy Record's press in 2010.
Catskill Mountain News publisher Dick Sanford told the Watershed Post today that no one at the Freeman has contacted him about the prospect of the Troy press shutting down.
"I had not heard that. I can't believe they wouldn't tell me," Sanford said.
Turmoil in the daily newspaper industry is hurting the local weeklies that depend on their infrastructure, Sanford said.
"One of the threats that our industry people say exist for us is a lack of printing presses. If the daily newspaper industry can't figure out how to survive, and they close all their printing presses, it will create a problem for us weeklies," he said.
Another potential cost-cutting measure the Freeman might take: The elimination of some paper editions. Journal Register CEO John Paton told Poynter last September that the company was considering scaling back from seven days a week to a less-frequent schedule at some of its papers:
“I would consider and am considering a reduction in print frequency in some markets — (which ones) to be determined,” CEO John Paton wrote me in an e-mail interview earlier this week. “I think it makes sense to think about the frequency of print as print revenues decline and digital revenues increase."
Last September, when the JRC announced it was filing for bankruptcy (again), the Nieman Lab's Joshua Benton wrote that a second trip through the Chapter 11 process could give the company a much-needed blank slate in an industry bogged down with business practices that are no longer profitable. Benton writes:
The newspaper industry’s problem today is not that its leaders don’t know how to make money in media. Lots and lots of money still flows through newspaper offices every day. It’s that they can no longer make that money at the scale they could 10 years ago — but their cost structures are still tied to that old scale. That’s why the past half-decade has been a seemingly endless string of layoffs and cutbacks, shaving dollars and people to keep up with revenue declines, while still being stuck in a fundamentally print-driven structure.
Meanwhile, as newspapers were busy writing press releases about layoffs, their nimble online-native competitors have been able to start from a blank sheet of paper and build for a digital scale of revenue.
This bankruptcy will allow JRC to have get the closest thing the newspaper business has seen to a true reboot.
But the fresh start that the JRC is seeking depends on its workers absorbing deep cuts -- not only in pay, but in their ability to engage in collective bargaining. In Michigan, where the JRC owns several papers, local unions representing JRC staffers say that the company has "declared war" with its union-busting demands, and are threatening to strike.
Freeman publisher emeritus Ira Fusfeld, who sometimes blogs about the news business on the Freeman's website, has kept quiet about the turmoil at the paper. His last blog post, on February 27, was about the Oscars.