Posted by chicagomedia.org on May 06, 2009 at 07:13:29:
Chicago Sun-Times newsroom union members to vote on proposed wage cuts
Chicago Sun-Times newsroom employees represented by the Newspaper Guild are set to vote tonight on whether to accept a temporary 9 percent pay cut and other proposals, as parent Sun-Times Media Group operates under Chapter 11 bankruptcy protection and seeks a buyer.
Sun-Times Media, parent of the Sun-Times and dozens of other area publications and Web sites, has said it needs to reduce its overall compensation costs by 15 percent. With non-union employees, the company already made the reductions through layoffs, elimination of severance pay, furloughs and other reductions.
Tonight's ratification vote by the Guild unit at the flagship Sun-Times, the first of five Guild units in the company to complete negotiations on a proposed agreement, comes as James C. Tyree, chairman and chief executive of Mesirow Financial, has emerged as leader of a group of Chicago investors he's trying to assemble in hopes of acquiring the ailing media group.
"When you think of this organization innovatively ... not only with the Sun-Times but all the other names, I think there can be a business model struck from whatever revenue figure you think you can generate [but] it has to be a conservative one," said Tyree, who added that he has been eying Sun-Times Media for several years. "I would not be interested at all if that were not the case. ... You just have to be innovative, not tied to the past."
One factor complicating Chicago Newspaper Guild negotiations is that of the five units it represents within Sun-Times Media only the Sun-Times and Waukegan's Lake County News-Sun have "successor and assigns" clauses in their collective bargaining agreements to extend the union deals to a new owner in event of the sale. The units he represents in the newsrooms of the Herald News in Joliet and Pioneer Press weeklies, as well as Pioneer Press production unit for which he negotiates, do not.
Thomas Thibeault, executive director of the Chicago Newspaper Guild, called this "problematic" because "the anticipation is that the company is going to be sold" and "without having the contracts go with them, you're asking us to give a piece of us today and tomorrow we get nothing."
In addition to the 9 percent pay cut, the reduction package before the newsroom union at the flagship Sun-Times includes severance pay but at post-concession wage levels. Employees will have five unpaid days off by the end of July. The Guild receives a credit toward the 15 percent target for the company not making pension contributions for the first half of 2009.
A scheduled 2 percent wage increase for Guild members, plus an increase in company contribution toward health care, remains set for Sept. 30.
The proposed union concessions are to last only one year, but would end immediately if the company is sold, if there is a filing in bankruptcy court to reject the collective bargaining agreement or if the company strings together two consecutive profitable quarters. Also included is a "me too" clause that would give the Sun-Times unit adjusted terms should any other union negotiate more favorable terms.
"They keep saying they have a 13-week window, which I think is pretty accurate," Thibeault said. "What happens is that as they save money, that window opens up a little more."
A Sun-Times Media spokeswoman said the 13-week window is a standard cash management tool common in bankruptcy situations and not in any way a reference to the longevity or operating window of the organization.
Tyree, whose interest in acquiring Sun-Times Media was first reported by Crain's Chicago Business, said he is still seeking investors and that it is early in what could be a relatively quick 60-day to 90-day process. He said he does not believe he is the only entity interested in acquiring the company. No one else has come forward publicly.
"We'll do everything we can to put a fair deal together," Tyree said. "If somebody wants to pay more, God bless them."
With advertising revenue having suffered a steep decline in recent months, few are eager to enter the industry.
The failure to find buyers earlier this year convinced E.W. Scripps Co. to fold Denver's Rocky Mountain News and Hearst Corp. to discontinue print publication of the Seattle Post-Intelligencer, turning it into an online-only entity. But the Beverly Hills, Calif., investment firm Platinum Equity said Monday that it had completed its purchase of the San Diego Union-Tribune for an undisclosed price.
Highly regarded investor Warren Buffett loves newspapers and yet even he said over the weekend he would not acquire one these days "at any price" because "they have the possibility of going to unending losses."
"What I think our group could bring to the table is strategic planning and capital planning to look at it a different way, an innovative way," said Tyree, who also is chair of the Chicagoland Chamber of Commerce. "You look at the revenue here. It's well over $200 million. I've got to tell you, you ought to be able to make money at that.
Sun-Times Media Group filed for Chapter 11 protection in March because it faced a looming U.S. tax bill alleged to be more than $600 million, a legacy of the company's operation under now-imprisoned global press lord Conrad Black.
Tribune Co., which owns the Chicago Tribune, filed for Chapter 11 in December because it was unable to manage the massive debt taken on in going private a year earlier.
"I've been a reader for a long time," Tyree said. "There are two great newspapers in Chicago and I'd hate to see either one of them leave, especially if there's a capability of keeping them independent and private and in Chicago."
(Phil Rosenthal, Chicago Tribune)