Posted on 01/04/2008 10:28:07 AM PST by abb
NEW YORK The Star-Ledger of Newark, N.J., has lost at least $11.5 million in advertising in the past year, according to a letter to staffers from Publisher George Arwady, which predicts the paper will have to undergo serious cutbacks and plans to ask its four unions for work-rule changes in their current contracts.
"As a result of several years of such trends, your newspaper is losing money -- a lot of money. If you’ve attended any of my employee meetings, you've been hearing about this situation in detail for some time," Arwady wrote in the letter to numerous employees before the holidays. "Fundamentally, the Star-Ledger cannot continue to operate the way it has. We need to cut our expenses drastically, and we need many new sources of revenue."
The letter, obtained by E&P, begins: "Dear Full-Time Non-Represented Star-Ledger Employee." It goes on to state, "These are difficult financial times in our industry and at The Star-Ledger, as you all are aware.
"The Star-Ledger’s traditional advertising revenue has been falling rapidly because of several difficulties hitting us at once. Our real estate and automotive customers have been suffering, and they have slashed their advertising this year with us by $11.5 million through November," the letter continues, adding later, "Mergers in banking and retail have also cost millions, while the increased competition from Internet companies has greatly reduced the incoming help-wanted calls to our Classified Department."
Arwady and General Manager John Dennan could not immediately be reached for comment Friday. Editor Jim Willse declined comment.
The letter, included with many employees' annual holiday bonuses, also states that management plans to meet with the paper's craft unions and seek unspecified work rule changes in order to allow future cost cuts. Arwady even declares that the paper is willing to open its financial books to the unions to prove its economic problems. The paper has no Newspaper Guild representation.
"We will be seeking to negotiate certain changes in long-term contracts that were signed before the unanticipated revenue declines occurred," the letter states. "Changes in long-standing work rules and other contract provisions absolutely are needed. As I said above, the paper simply cannot continue to operate as it has. The revenue is not there.
"Since we are a private company and do not release financial information, we will be taking the unusual step of opening our books to independent CPAs chosen by the unions," Arwady explains. "We want to erase any doubts they might have that we are in serious trouble and need contract revisions."
Patrick Lo Presti, president of the Graphic Communications Conference Local 1-L, which represents Star-Ledger plate makers, said the paper has approached the union to discuss work rule changes, but nothing has been decided. "There has been nothing agreed upon at this point," he said.
The letter is not all bad news, however. Arwady ends it by reminding workers they are receiving the same bonuses as last year and will again received a lump sum payment in January, this time 1% larger. But, it appears no raises are in the offing.
"Making these payments is a way of thanking you for your hard work in maintaining the Ledger’s high standards even as we launch new projects and absorb additional work with fewer hands to help," he writes.
The entire letter is posted below: *************************************
Dear Full-Time Non-Represented Star-Ledger Employee,
These are difficult financial times in our industry and at The Star-Ledger, as you all are aware.
The Star-Ledger’s traditional advertising revenue has been falling rapidly because of several difficulties hitting us at once. Our real estate and automotive customers have been suffering, and they have slashed their advertising this year with us by $11.5 million through November. Dozens of retail advertisers have gone out of business, with Rockaway Bedding ($1.5 million spent with the Ledger) being the largest and Levitz furniture ($900,000 per year) the most recent. Mergers in banking and retail have also cost millions, while the increased competition from Internet companies has greatly reduced the incoming help-wanted calls to our Classified Department.
As a result of several years of such trends, your newspaper is losing money – a lot of money. If you’ve attended any of my employee meetings, you’ve been hearing about this situation in detail for some time.
Fundamentally, the Star-Ledger cannot continue to operate the way it has. We need to cut our expenses drastically, and we need many new sources of revenue.
As you know by reading the paper, the Ledger’s new revenue initiatives – things such as JobFinder, AutoFinder, Premier Jobs and Abode – have been quite successful. Our efforts to attract more small advertisers in zones have shown encouraging results. We have raised our circulation prices and expanded our programs on NJ.com. But the truth is that these gains have been much more than offset by the losses.
As far as expense reductions are concerned, you only need to open the paper to see a significant decline in the page count. The Ledger also has intentionally reduced its circulation, particularly “sponsored” circulation that costs more than it brings in. We have reduced the non-represented work force through voluntary buyouts, purchased labor-saving technology, reduced production shifts and made dozens of other cuts in expenses.
As I told you recently, we will be meeting in January with our four largest craft unions to discuss our economic challenges. We will be seeking to negotiate certain changes in long-term contracts that were signed before the unanticipated revenue declines occurred. Changes in long-standing work rules and other contract provisions absolutely are needed. As I said above, the paper simply cannot continue to operate as it has. The revenue is not there.
Since we are a private company and do not release financial information, we will be taking the unusual step of opening our books to independent CPAs chosen by the unions. We want to erase any doubts they might have that we are in serious trouble and need contract revisions.
I promise to keep you informed about the status of these discussions.
In the meantime, you will find enclosed with this letter a check in the same amount you received at this same time last year. Likewise, although the financial conditions again will make it impossible to increase your salary, we will be paying you a lump sum amount in January that will be 1% larger than the lump sum you received a year ago. The lump sum will be paid as an addition to a regular paycheck or direct deposit.
Making these payments is a way of thanking you for your hard work in maintaining the Ledger’s high standards even as we launch new projects and absorb additional work with fewer hands to help. Let me also thank you in advance for your continued flexibility and creativity in 2008 as we make the changes necessary during this time of transition for The Star-Ledger.
Sincerely,
George E. Arwady Publisher
ping
I’ve noticed in our local paper, the Car Dealer’s ads, new and used, have virtually disappeared, in favor of Internet and “free paper” advertisements......
Guess people have grown weary of reading about the main activity in NJ (RAT Party corruption).
The Star-Ledger leans so far to the left that I have to pick up my copy from my neighbor’s driveway.
The only loss of a reduced PRAVDA of the Democrap Party is the reduction of material for bird cages and recycling centers!
The only loss of a reduced PRAVDA of the Democrap Party is the reduction of material for bird cages and recycling centers!
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