Major battles loom for GateHouse journalists

Oct 2, 2013 by

Journalists from all the GateHouse/New Media properties need to come together to fight for their craft, their institutions and their communities.

GateHouse managers are painting a pretty picture of life after bankruptcy. The existing properties will merge with the old Dow Jones chain into a new operation called New Media.

Not only will GateHouse’s $1.2 billion debt disappear, the new company would have up to $1 billion to spend on new properties. That sounds great.

But New Media is promising investors the same intense cost controls that GateHouse used to gut its newsrooms and diminish its quality of journalism.

Recently the Boston Business Journal assessed some potential pitfalls facing New Media, as Fortress Investment Group outlined as part of its disclosure or risks to investors,

Here is an excerpt of its report:

There’s also no guarantee that GateHouse’s strategy of merging operations among its papers, in part through its so-called “clustering strategy,” will set it on a profitable path. New Media’s cost control efforts, GateHouse concedes, might not lead to the hoped-for savings, or they could hurt New Media’s ability to recruit and hold on to valuable employees.

GateHouse’s revenue projections, without the former Dow Jones/Ottaway papers, show compensation expenses declining only modestly in 2014 and 2015, to $195 million and $192 million respectively, from $200 million today. Once the former Ottaway papers are added to the mix, the projections call for $257 million in compensation expenses next year and $252 million in 2015, down from $264 million for the combined GateHouse/Ottaway workforce expenses this year.

GateHouse’s projections also rely on its relatively new Propel digital marketing venture taking off: Venture revenue, projected at $9.4 million this year, would grow to $31 million next year and $56 million in 2015. That extra income likely would be necessary to help offset a 3-percent annual projected decline in ad sales. (It’s worth noting that the projected decline might be overly optimistic, given the broader industry trends.)

The New Media group, GateHouse says, could also have a hard time finding acquisitions it can afford. GateHouse also warned of the potential for labor union complications, if negotiations end up adversely affecting the company’s ability to make its operations more efficient. Unions represent about 15 percent of GateHouse’s 4,565 employees (split among Massachusetts, Illinois and Ohio papers). About half of the union contracts expire next year.

The fight for a good first contract is underway at our new Rockford and Springfield units. Soon the battle will start at another UMG unit, the Pekin Daily Times. We are hoping to gain a contract extension in Peoria, but the nothing has been finalized with that unit.

Journalists from all the GateHouse/New Media properties need to come together to fight for their craft, their institutions and their communities.

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TNG monitors GateHouse bankruptcy for its members

Oct 2, 2013 by

The Newspaper Guild and its parent union, the Communication Workers of America, is closely monitoring the GateHouse bankruptcy proceedings.

At the moment it appears no existing Guild contracts will be impacted by this pre-packaged bankruptcy. It also appears the United Media Guild’s negotiations in Rockford will continue without disruption.

We are also negotiating a first contract in Springfield and a contract extension in Peoria. Thus far those talks remain on track as well.

During a conference call with local leaders (including Rockford unit chair Melissa Westphal), national TNG leadership noted that a wage motion was approved in this case. This guarantees that employees will continue getting paid without interruption while the case is pending.

GateHouse hopes to emerge from prepackaged bankruptcy in mid to late November. It expects smooth sailing through the courts.

Unfortunately, TNG and CWA officers have gained extensive experience representing members in all sorts of bankruptcies. We have learned not to take anything for granted.

To that end, attorney Richard Seltzer of Cohen, Weiss & Simon is representing all of current and future members working in GateHouse units. He will keep TNG leadership abreast of all developments in this case as it unfolds.

Since the bankruptcy filing was in Delaware, TNG has also retained local counsel in Wilmington. Susan Kaufman of Cooch and Taylor will on call for us there.

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Mary Junck gets $500,000 bonus

Mar 27, 2012 by

According to a Lee Enterprises filing with the SEC, CEO Mary Junck has received a $500,000 bonus related to Lee’s successful refinancing.  Additionally, Carl Schmidt, vice president, CFO and treasurer, received  a $250,000 bonus.

Junck and Schmidt are the fiscal geniuses who way overpaid in 2005 when Lee paid $1.46 billion for Pulitzer Publishing and the St. Louis Post-Dispatch. Their misjudgment of the industry and its future are what saddled Lee Enterprises with the debt that forced Lee into bankruptcy.  And now after Lee wrongly eliminated promised health insurance to its retirees, forced current employees to take unpaid furloughs, froze pensions, cut pay and laid off hundred of employees across the country — now the fiscal geniuses get $750,000 bonuses.  Outrageous!!!

 

Read what Romenesko said about it:  http://jimromenesko.com/2012/03/28/layoffs-at-lee-papers-as-ceo-gets-500000-bonus/

 

We can only assume that once Junck and Schmidt have finished feathering their nests with $100 bills, they’ll be making an announcement rescinding the scheduled 2012 unpaid furloughs for employees across the company, and enclosing a nice check with their apology to the family of deceased P-D retiree Robert Douglas.

Don’t hold your breath Lee employees; if we’re lucky, maybe we’ll get a pizza party.

 

 

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Open letter to Romenesko

Jan 13, 2012 by

Copy of the text from a letter emailed to Jim Romenesko.

Thursday Jan. 12, 2012

Dear Mr. Romenesko,

St. Louis Post-Dispatch columnist Bill McClellan wrote a great column on Jan. 8, 2012, about Post-Dispatch retiree Robert Douglas, who passed away sometime between Dec. 14 and 16.

http://bit.ly/xJLIOR

Robert had health issues, but he was screwed over by the Post-Dispatch when they cut off his contractually promised health insurance.  The story outlines the situation better than we can. The story created a buzz in the newsroom and is gaining some traction in the community.

The United Media Guild feels that the Post-Dispatch’s actions contributed to Robert’s death and that it and the paper’s owner, Lee Enterprises, should be ashamed.  The Guild is calling on the Post-Dispatch to reinstate the health care it promised to its retirees before another tragedy happens.

Sincerely,

The United Media Guild Executive Board

TNG-CWA 36047

unitedmediaguild.com

 

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Lee Bankruptcy Update

Dec 28, 2011 by

 

 

The United States Bankruptcy Court for the District of Delaware has scheduled a Disclosure Statement Hearing for 2:00 p.m. on January 23.

 

As reported earlier, there appear to be no major obstacles to this process going forward and there have been no filings to indicate that Lee will attempt to cut employee benefits or gut any collective bargaining agreements.  As things stand, it is possible that Lee could emerge from bankruptcy as quickly as 10 days after the hearing.

 

As mentioned in a previous post, all lawsuits are stayed during this process, so the discovery process that we were undergoing for our retiree medical lawsuits has been put on hold until all this is over; likewise the depositions that were scheduled for mid-January.  Still, such a quick emergence should only push things back a month or two.  A recent statement from the court states:

“the Court concludes that the case should be administratively closed until such time as the bankruptcy proceedings have been concluded or Court action is otherwise required.

 

We will keep you advised as events unfold.

 

 

 

 

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Lee Files Chapter 11

Dec 13, 2011 by

 

Lee Enterprises formally submitted the necessary paperwork in Wilmington, Deleware bankruptcy court this morning to refinance its roughly one billion dollar debt.

 

Lee’s action came after the media corporation announced last week that it would enter into Chapter 11.  That announcement understandably upset current and former employees, as they wondered what impact, if any, the filing would have on their lives and burned up the phone lines between those individuals and this office.

 

Our initial discussions with P-D management were met with assurances that Lee had no intention of scrapping collective bargaining agreements or using the bankruptcy court to negate our federal litigation surrounding retiree medical benefits.  However, in those first 24 to 48 hours, those assurances were vague and did not provide us with the certainty we were seeking (to be fair, I am not suggesting that anyone was withholding information, what I think was more likely is that those to whom we were speaking were not yet in possession of all the facts).  Now, while that was proceeding, the Guild was huddling with attorneys, some at our international in DC, as well as others who specialize in bankruptcy law at various points on the map.  During this time we didn’t post much on this site because we didn’t want to jump the gun, get it wrong and misinform anyone.  Other than acknowledging Lee’s announcement, we made a decision to wait until we had a better understanding of just how things would play out before stating anything unequivocally.

 

Bankruptcy law is (hopefully) not something the average person comes into contact with, so there is often quite a bit of confusion on just how such things proceed. Most people understand that creditors are often forced to take less than what they are owed (‘haircut’ is the term used in the industry) and make the assumption that everything is up for grabs.  Such is not always the case; it depends on the filing.  In Lee’s case, this is a prepackaged filing and most of the creditors (94%) have already agreed to terms.

 

Collective bargaining agreements can get a haircut in bankruptcy court but the corporation must file under section 1113 of the code.  Retiree benefits, by the way, fall under section 1114.  Those two sections have a somewhat higher bar, so to speak, offering more protection for employees and retirees than normal creditors or vendors.  Still, a corporation can file and try to make the claim that they need relief in order to remain viable.  In more recent conversations with P-D management, they have assured this office that both CEO Mary Junck and CFO Carl Schmidt have stated such filings would not occur and all indications are that they were telling us the truth.  In filing their plan of reorganization today, Lee stated (section 6.3, page 31) that they were assuming (as opposed to rejecting) all collective bargaining agreements.  So that’s certainly good news for Post-Dispatch employees.

 

Our retirees should know that, when a corporation goes into bankruptcy, any lawsuit in which it is involved is automatically stayed.  And the court can deal with those lawsuits and decide them.  Today, Lee also submitted paperwork detailing their how they want the bankruptcy court to deal with all their pending litigation (besides ours, the corporation is involved with three other suits).  That is found in Section G (pages 35 and 36) of Lee’s Solicitation and Disclosure Statement and reads:

“The Prospective Debtors anticipate that, to the extent any litigation is not resolved
prior to the Effective Date of the Plan and/or removed by the Debtors to federal court consistent with their powers under applicable law, such litigation will continue after the Effective Date in the forum(s) in which it was initiated.”

 

Our attorneys are still going over all this with a fine-tooth comb but it appears that the bankruptcy judge will refrain from getting involved in our litigation and, upon emerging from bankruptcy (hoped by Lee to be within 45-60 days), both parties will pick up where they left off with the retiree medical lawsuit.

 

When a corporation files for Chapter 11 protection, its unsecured creditors can call for the formation of a creditors committee.  Being on that creditors committee means more influence in determining how things are going to get resolved.  Arguments among unhappy committee members could keep a corporation in bankruptcy, delaying its emergence for months, even years. The Guild is well-aware of the potential here to inject itself into the proceedings and perhaps have the tail wag the dog for a while but such knowledge must be tempered by our guiding principal to never cause harm to a member or to do anything that might put their jobs at risk.  Raising hell on a creditors committee (fun as that might be) might only succeed in delaying Lee’s recovery and cause more belt-tightening (read layoffs) at the paper.  We can’t concern ourselves with just one aspect of this; we’ve got to step back and view this thing in its entirety.

 

TNG has seen numerous corporations file for bankruptcy and – in all but one instance – has managed to get itself appointed to the unsecured creditors committee (Media News was the exception and the reason was because it was a prepackaged filing and there was no unsecured creditors committee).  Events seem to be unfolding just as Lee said they would and we presently have no reason to believe that a creditors committee will be formed.  Also, with no apparent attack on our contact or our lawsuit, we have no plans to call for one.

 

Still, The Guild is well aware of all that could still go south and we are watching. And if, over the next few days we suddenly think for some reason that our members rights are at risk we would not hesitate for call for one at once.

 

I hope this provides a little clearer understanding for our members and I hope that each one of you has a safe and happy holiday season.

 

 

 

 


 

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