6/24/08

News Union faces dues hit in Detroit

No comment from left-wing Newspaper Guild official

In an effort to cut costs, the partnership that oversees the joint business and advertising operations of the Detroit Free Press and The Detroit News is seeking 150 volunteers to accept buyouts by July 18.

The Detroit Media Partnership also will halt publication of the 11 Free Press weekly community sections and Twist, the Free Press Sunday supplement aimed at women, by early August, said Susie Ellwood, the partnership’s executive vice president and general manager.

“The environment in which newspapers operate continues to worsen rapidly, and the Detroit Media Partnership faces unique challenges because of the state’s business and economic climate. We must take action to reduce our expenses,” The Detroit News Editor and Publisher Jonathan Wolman wrote in an e-mail to staff on Monday.

Layoffs are a possibility.

“If the voluntary offer doesn’t result in a sufficient number of volunteers, or if in the future, economic conditions worsen, it may be necessary to consider layoffs,” Wolman wrote.

Volunteers will be selected based on seniority and position, and will receive two weeks of severance for every year of service, capped at 52 weeks.

Ellwood didn’t know how many staffers work on the weekly sections, but she said the partnership hoped enough volunteers would accept buyouts to allow those staffers to be moved elsewhere in the newsroom. Some of the weekly content will be folded into other sections.

In October, the partnership trimmed its overall workforce, including newsrooms, by 5 percent, or about 110 employees. All were volunteers.

A message was left for Lou Mleczko, president of Newspaper Guild Local 34022, which covers newsroom staff of both newspapers

The buyouts come in the wake of financial struggles for the parent companies of both newspapers.

Standard & Poor’s credit-rating service recently lowered Denver-based MediaNews Group Inc.’s debt rating by two levels to CCC, four levels above default. MediaNews owns The Detroit News.

S&P analyst Emile Courtney in a report said MediaNews is in danger of default and is likely to restructure because it faces increasing cash-flow problems this year due to dwindling advertising.

The partnership is 95 percent controlled by McLean, Va.-based Gannett Co. Inc., owner of the Free Press.

Gannett has reported its May print advertising revenues dropped 14.3 percent compared with May 2007, and the company has lost about half its share value over the past year. The company plans to write down its assets by up to $3 billion this quarter, citing declining value of its U.S. and British operations.

(crainsdetroit.com)

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