The results are in earlier than expected: members of the Boston Newspaper Guild narrowly rejected a concession package worth $10 million dollars, setting in motion reprisals by the New York Times Co. (NYSE: NYT) that at the worst could mean the end of the Boston Globe. At the least, the 690 staffers who belong to the Guild face a 23 percent wage cut across the board. More than 80 percent of the union took part in the 12-hour vote Monday; the results were 277 “no” to 265 “yes” according to Boston.com. The paper responded by notifying the Guild that the pay cut will be imposed next week. Asked if a 60-day closure notice would be filed, Globe spokesman Bob Powers told paidContent: “We are not planning to file that notice at this time.”
The 12-vote margin is far from a sound defeat. Instead, it’s a measure of the conflict members faced as they tried to choose between the lesser of two evils — concessions that included considerable givebacks and permanent wage cuts versus the NYTCo’s threats of a unilateral 23 percent cut and possible closure of the paper. Either way, the results are similar: heavy wage cuts and continued strife.
The company claims the paper is on pace to lose $85 million in 2009, following a $50 million loss in 2008.
As a result, it demanded $20 million in concessions from its unions; $10 million from the Guild alone. The package finally reached in early May after negotiating under the threat of closure included a wage cut, an unpaid furlough and higher health insurance costs.
But Poynter’s Rick Edmonds says that on a cash basis the paper may be close to break even. He cites a conversation with NYTCo spokeswoman Catherine Mathis, who “conceded” in a recent interview that the $85 million “operating loss” includes depreciation, amortization and special charges. No word on the number before those charges (EBITDA) or on a cash-flow basis.
With that in mind, Edmonds contends NYTCo has little to lose if it keeps operating the Globe. That may be the case, especially if the 23 percent cut is implemented, but it’s the all-things-being-equal scenario.
— Globe/NYTCo Respond: Pay cut imposed next week: In a statement from the Globe, the paper said it already has notified the Guild that “as a result of the rejection of this proposal, we have reverted to our alternative Final Record Proposal which provides for a 23 percent wage reduction for all Guild members. Since the parties are at an impasse, the Globe will implement the wage reduction effective next week. We have told the Guild that we are available to meet any day this week to review implementation of the pay cut. We regret having to take this action, but have no financially viable alternative.”
— Guild Executive Director Dan Totten: “With today’s vote, members of the Boston Newspaper Guild have said that the New York Times Company must do better than the offer that was presented. … The Boston Newspaper Guild is committed to resuming good-faith negotiations with the New York Times Company and Globe management to reach an agreement.” (Video)