Post-Dispatch outsources its copy editing and design jobs

Feb 16, 2019 by

In a move the United Media Guild has long feared, Lee Enterprises announced it would move the design and copy-editing work at the St. Louis Post-Dispatch to its design/editing hub in Munster, Ind.

Post-Dispatch management had long resisted the industry-wide trend toward production consolidation. Lee long ago outsourced the design and editing functions of its other newspapers, mirroring the consolidation to design/editing hubs that occurred in Gannett, GateHouse and other chains.

“Such outsourcing inevitably weakens the newspaper, since editors with little knowledge of the St. Louis region will be editing copy, writing headlines and designing pages of the Post-Dispatch,” UMG president Jeff Gordon said. “But our remaining members will do their best to maintain the P-D’s high journalistic standards and keep serving the community.”

The Post-Dispatch was among the last chain-owned newspapers of its size to retain its design and editing jobs. But that fact offers no consolation to the eight Guild members who now face a lay-off due to this decision.

This outsourcing comes at a time when the Post-Dispatch is already offering buyouts to both Guild-represented and exempt employees. These cutbacks came on the heels of Lee’s sale of the Post-Dispatch building and its agreement to move its operation to a nearby building owned by its new landlord.

Why all the slashing?

The Post-Dispatch remains profitable. But its revenues continue declining, as they are across the industry. Lee wants to maximize its cash flow so it can continue paying down its onerous debt at an accelerated rate and refinance it at better terms.

But another challenge has emerged: Dissident shareholder Carlo Cannell has been highly critical of Lee’s management while urging a makeover of the company’s board of directors. His effort could draw the interest of vulture capitalist firms like Alden Global Capital, which is buying up and stripping down newspapers across the country.

Cannell’s initiative has prompted Lee to find more money to defend this attack at the shareholder level. That has also given Lee motivation to run an even leaner operation, since potential bidders like Digital First (backed by Alden) and GateHouse (backed by Fortress Investment Group) target companies they believe they could squeeze more money from.

Lee’s rationale: If there is nothing left to squeeze, maybe the vulture capitalists will leave us alone. But in the meantime, its newspapers suffer.

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UMG honors Tony Messenger, Shawn Anglin and other members at awards dinner

Feb 8, 2019 by

The United Media Guild honored some of its top activists and one of its most accomplished journalists Thursday night at its annual Local Meeting and awards dinner.

St. Louis Post-Dispatch columnist Tony Messenger won the Terry Hughes Award for exemplary journalism. UMG secretary Doug Moore, himself a more Hughes Award winner, explained why:

His columns on debtors’ prisons in rural Missouri started with the case of Victoria Branson, a woman from St. Francois County who had been sent to prison because she couldn’t afford court costs in a long defunct child support case. Branson was released from prison after Messenger’s column about her was published. Soon, tips came in from all over Missouri’s rural counties of similar stories, and Messenger worked closely with the state public defender’s office, which was filing appeals in such cases, arguing that a scheme to use the courts as a collection service for expensive jail bills amounted to

Hughes Award winner Tony Messenger with past winners Doug Moore and Michele Munz.

a modern day debtors’ prison.

On Wednesday, the Missouri Supreme Court held arguments in two of the cases Messenger has written about. Two of the legal briefs filed in the case reference Messenger’s columns as evidence for the court to declare the scheme illegal.

Shawn Anglin, an editor and reporter at The Southern Illinoisan, was honored as Guilder of the Year. Anglin is the unit chair of this newly-organized group. Journalists at The Southern voted 12-0 to join the Guild and they are currently bargaining their first contract.

The Southern unit won the UMG’s Solidarity Award for that unanimous vote and for its

ongoing internal and external mobilization. Sportswriter Todd Hefferman, the unit vice chair, and reporter Marilyn Halstead, the unit secretary, accepted the award.

Retired Labor Tribune reporter Kevin Madden received the Activist of the Year Award for his tireless effort to defeat “Right to Work” in Missouri. Madden, the long-time unit chair at the Tribune, spent long days gathering signatures in support of other progressive ballot initiatives as well.

“Fight for 15” activist Stanley Jackson received the Steward of the Year. He provided invaluable leadership for of UMG’s national unit of organizers who mobilize fast-food workers in the fight for better wages.

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Sinking revenues force more Lee Enterprises cutbacks, draw shareholder scrutiny

Feb 7, 2019 by

The good news for Lee Enterprises: The company continues paying down its onerous debt at an accelerated rate.

The bad news for Lee: Revenues keep declining, prompting cost-cutting that diminishes journalism content, its core product. The company is also drawing the ire of at least one activist shareholder.

United Media Guild members have felt the brunt of this cost-cutting in several ways:

  • Another round of buyouts is underway at the St. Louis Post-Dispatch. The company is seeking to reduce payroll yet again and we could see more layoffs if the company doesn’t get enough volunteers.
  • The Post-Dispatch building has been sold and the new owner wants to clear the building for renovations. So P-D, which now rents from the new owner, will be moved to another building one block to the east.
  • Negotiations for a first contract for our new members at the Southern Illinoisan have gone slowly. The company has been unwilling to agree to some basic layoff protocols that have worked fine elsewhere.
  • Meanwhile the printing operation at the Southern Illinoisan in Carbondale is closing. The newspaper will be printed by the Post-Dispatch, change that will move up deadlines and knock key content (night meetings, Southern Illinois University sports, high school game coverage) out of the printed product.

Against this backdrop, Lee Enterprises is under attack from Carlo Cannell and his Wyoming-based Cannell Capital. He is urging shareholders to vote against incumbent board members, including chairman Mary Junck.

His complaints are familiar: Lee dramatically overpaid for the Post-Dispatch, Junck has earned more than $40 million of compensation since 2002 despite the company’s free fall, and the current board of directors has a friends-and-family vibe.

He also cited the unwillingness of Lee to go all-in on a digital transformation ala the New York Times. But in fairness to Lee, digital transformations have yielded disappointing results beyond a few major outlets with national audiences.

Most of Lee’s properties are in mid-sized and small markets, where the print product has staying power and the digital potential is somewhat limited. Lee has done a better job detaining print revenue than some rival chains.

Cannell’s complaint didn’t reveal much insight into this distressed industry. Still, he told CorpGov.com that his actions have drawn inquires from private-equity groups.

That is notable. Might this be the start of a hostile bid for the company?

The consolation of the newspaper industry is ongoing. Lee recently bought the Kenosha News and Lake Geneva Regional News, two Wisconsin properties that are a good fit for the company.

Gannett recently fended off a bid from the company that controls Digital First Media, a chain that shamelessly plunders newspapers for cash flow. GateHouse Media, which owns UMG-represented Illinois newspapers in Springfield, Pekin, Peoria and Rockford, has also remains in acquisition mode.

To combat Cannell’s attack, Lee is spending an additional $425,000 to solicit proxy votes. The UMG is monitoring the situation and we plan on attending next week’s shareholders meeting in Davenport, Iowa.

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