As we mentioned earlier, the Hearst-owned San Francisco Chronicle recently made the stunning announcement that it might close that paper--the dominant daily in the Bay


SF Chronicle's Lesson for Frank Blethen?

As we mentioned earlier, the Hearst-owned San Francisco Chronicle recently made the stunning announcement that it might close that paper--the dominant daily in the Bay Area--as it's expected to do with the P-I. Now that looks more like a hard-line bargaining tactic with the unions. The Chronicle itself reports that the Media Workers Guild agreed to some major concessions. The paper quotes a Guild statement to this effect:

"The terms reached late Monday include expanded management ability to lay off employees without regard to seniority. All employees who are discharged in a layoff or who accept voluntary buyouts are guaranteed two weeks' pay per year of service up to a maximum of one year, plus company-paid health care for the severance term, even in the event of a shutdown."

As we consider the imminent closure of the printed P-I, as The Seattle Times prepares to become the sole (but likely still money-losing) daily in town, I'll bet both Frank Blethen and the Pacific Northwest Newspaper Guild recognize what the Chronicle's cost-cutting means for them...

The Chronicle has previously stated it was losing millions, perhaps as much as $50 million last year. But Hearst, being a private company, doesn't have to open its books to audit its financial statements. Nor does the Blethen family-controlled Seattle Times Co., which owns the majority stake in the Times. But publicly traded McClatchy, with 49.5 percent ownership in the Times, recently devalued that investment in its SEC filings to zero. As we've previously reported, McClatchy once put a $100 million value on its Times stake, which it bought from the defunct Knight-Ridder chain.

Staff (including benefits) constitute the largest slice of a newspaper's cost pie. The Chronicle currently has 483 Media Workers Guild employees (in several departments) and a daily circulation of 339,430. That's about 33 percent greater than the Times, which has 420 of its staff represented by our local Newspaper Guild (of about 1,300 total employees), per the Guild. (Let's leave other unions, like the Teamsters, out of the discussion for now.)

But think of it this way: If the 33 percent larger Chronicle, as a starting point for anticipated cuts, has a unionized staff only 15 percent larger than the Times, a management consultant is going to say the Times should be another 15 percent leaner to match its circulation. And the Chronicle begins as the de facto monopoly daily in San Fran, since the old Examiner (which Hearst dumped in a brand-swap) is hardly a competitor. Times Co. is only just now preparing to reach the point where Hearst says further cuts are needed.

Even before things turned really dire for the P-I this year, as our Rick Anderson has reported, the Times had shed some 500 employees to save money. Some veterans in the newsroom took buyout packages, but seniority rules in most labor agreements. It's easier to fire the young and the cheap.

However, if Blethen were to Hearst the union--if I may use the term as verb--and threaten to take the Times into bankruptcy to break its union (and other) contracts, the Pacific Northwest Newspaper Guild might decide it had no option but to follow the Bay Area example. Caving to management is bad, from a union perspective, but having no union at all would be worse.

Other Bay Area union concessions, the Chronicle reported, "include reductions in vacation time, sick leave and maternity/paternity leave; expansion of the work week from 37.5 hours to 40; and the right for the company to subcontract any work."

Those, too, may soon be up for discussion between the Times and the Guild.

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