The NewStandard ceased publishing on April 27, 2007.

Knight Ridder Halts Union Talks to Ease Company Sale

by Brendan Coyne

One of the biggest recent casualties in the national decline in newspaper audiences, the news conglomerate looks to be heading down the typical path of workforce cuts and other trimmings.

Dec. 5, 2005 – As the owners of the nation’s second-largest newspaper chain seek to sell, staffers at many of the news outlet’s 32 daily newspapers may face unresolved labor issues while Knight Ridder attempts to make itself more attractive to potential buyers.

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The prospect has been discussed in union publications since the company first indicated it might open up to bids. It came to the fore last week, after the publisher of two Philadelphia dailies informed union leaders that he was halting contract talks.

The decision by Joe Natoli, publisher of Knight Ridder papers Philadelphia Inquirer and Philadelphia Daily News, came on the orders of company officials. Executives decided to halt spending increases as potential investors examine the operation’s financial outlook, the Inquirer reported. Natoli and union leaders sought to resolve potential conflicts well in advance of the current contracts’ August 2006 expiration, but the chances of doing so now may well be diminished.

Leaders of the Philadelphia Newspaper Guild, which represents workers at both papers, expressed disappointment at the suspension of contract talks in a statement posted to the website. The announcement calls for solidarity and resolve among all unions affected by the halt.

"This management delay adds to the uncertainty and distraction at a critical time for our newspapers and online services and the communities they serve," the Guild said. "Our best course of action is to continue to build the Guild and focus on serving the customers. Regardless of what happens, our best interests are served by poise and working together."

Workers with other Knight Ridder-owned papers may suffer a similar fate as the company assesses its financial standing and potential buyers consider dismantling the chain or overhauling its workforce.

Last week, industry publication Editor & Publisher reported that financial analysts hired by the company project that it could trim costs by as much as $350 million in order to attract investors or buyers.

Under two scenarios offered by the financial-consultant firm Morgan Stanley, workers would bear the brunt of the cost. One projection is based on trimming the overall workforce by 5 percent for $150 million in savings. The other suggests shuttering the Philadelphia Daily News, thereby cutting costs by about $350 million and trimming the chain’s staff by 6 percent.

Both Philadelphia papers and the San Jose Mercury News and St. Paul Pioneer Press are considered underperforming papers by the financial analysts. A significant portion of each paper’s workforce belongs to a union.

In statements, commentary and articles throughout November, union members and leaders expressed concern over workers’ future and rights under various sale scenarios.

"We believe the best approach to addressing the crisis at Knight Ridder and in the newspaper industry is for employees, the industry and our communities to work together to promote newspapers and their essential role in a free society," Newspaper Guild President Linda Foley said in a mid-November statement. "Our vision for growth runs counter to those who believe that newspaper owners can cut their way to prosperity by eliminating jobs, slashing journalistic resources and dismantling circulation and marketing infrastructure."

The newspaper industry as a whole has suffered in recent years, with analysts pinning the blame on a variety of factors, including a dramatic audience shift to television and online news outlets, as well as an over-arching distrust of establishment media.

More than convincing audiences of the importance of newspapers, some inside Knight Ridder critics have long argued, the industry has to reverse newsroom cutbacks and editorial policies that have hindered papers’ ability to serve a role valuable to the public. The Guild-affiliated Knight Ridder Council, an organization of some 3,000 Knight Ridder employees, has pushed for such a shift.

Leaders of the Minnesota Newspaper Guild, which represents workers at the Pioneer Press, posted a notice to members on November 19 outlining members’ rights, potential strategies and pitfalls should a full or partial sale of Knight Ridder properties take place. Topping the concerns is the potential that a new owner would not be bound by pre-existing contracts. The union said it is committed to a "massive internal organizing effort" to deal with the expected fallout.

Earlier last month, San Jose Newspaper Guild Executive Officer Luther Jackson informed Mercury News workers that a sale of Knight Ridder properties in their entirety would likely leave the existing contract in place. But, Jackson noted, if the chain "sold off some of its papers in an asset sale, the impact on Guild members could be severe."

In addition to the 32 dailies, Knight Ridder publishes over 24 weekly, monthly and other publications, as well as maintaining a popular wire service and separate digital edition.

Should the chain ultimately cut staff, it would be following a growing trend in print journalism. Companies cut over 1,900 newspaper jobs this year, E&P reported last month.

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The NewStandard ceased publishing on April 27, 2007.

Brendan Coyne is a contributing journalist.

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