Star-Ledger gives staff a deadline for buyouts

[Jesse Espinoza]

BY STEVE CHAMBERS
Star-Ledger Staff

The owners of The Star-Ledger announced yesterday they will sell the newspaper if they cannot win union concessions and persuade a large number of non-union, full-time workers to take buyouts in the next two months.

The owners set a deadline of Oct. 1 for getting 200 of the newspaper's 756 non-union full-time employees to take a buyout and for achieving the union concessions. The Star-Ledger's total work force is 1,412.

The announcement comes as the newspaper industry nationwide reels from plunging advertising revenues linked to a troubled economy and the growth of online media.

The news was announced to grim-faced employees by publisher George E. Arwady at the paper's headquarters in Newark yesterday morning. He characterized the paper as being "on life support" and urged employees to consider the offer for the good of fellow employees.

"Despite the best efforts of all of us, The Star-Ledger is losing a battle to survive," Arwady said, noting the paper has suffered heavy losses the past two years. "If The Ledger is to have a future, it must make further changes in how it operates."

The Star-Ledger is New Jersey's largest newspaper -- selling roughly 350,000 papers daily and 520,000 on Sunday -- and in recent years has won two Pulitzer Prizes and numerous other national awards. But like others in the industry, the newspaper has been buffeted by losses. Hiring and wage freezes have been in place for years, and the paper has tried other cost-saving measures, including consolidating news and feature sections and closing one of two printing plants.

The plant closing is at the heart of the union negotiations, with the paper's parent company, Advance Publications Inc., seeking unspecified concessions from unions representing mailers and drivers. Two smaller unions have agreed to needed changes, company officials said.

"We're in arbitration and waiting for the outcome," said Glenn LaChance, business agent for the Newspaper and Mail Deliverers Union, which represents about 90 Star-Ledger drivers. "We have never told them we do not want to negotiate. We're not here to put anybody out of business."

Non-union employees were offered one year's pay and a year of health coverage regardless of years of service. Employees would leave by the end of the year, Jim Willse, the newspaper's editor, said.

Even if the buyout effort is successful, Arwady noted, the radical reduction in force will mean big changes at the organization, which also supplies online news and a daily webcast at noon on nj.com.

Willse said the newspaper, which unlike many other newspapers has not laid off newsroom staff, remains committed to quality.

"A staff reduction that size means we can't do some of the things we do now, but it doesn't mean we won't be a good paper," he said. "Our stock in trade is local news and sports, heavy on the investigations and powerful storytelling. Even with fewer people, that won't change."

A similar buyout announcement was made at The Ledger's sister paper, The Times of Trenton, with the goal of cutting 25 jobs, a roughly equivalent ratio. The two papers would be sold as a package if the Oct. 1 deadline isn't met, and Advance has retained J.P. Morgan Chase to handle any potential sale, Arwady said.


CLASSIFIED AD LOSS

Earlier this week, Advance, which is owned by the Newhouse family, announced it will close the Newhouse News Service in Washington, D.C., following the presidential elections.

Advance owns 27 daily newspapers, including The Oregonian in Portland, Ore.; The Plain Dealer in Cleveland, and The Times-Picayune in New Orleans. It also owns Condé Nast Publications, the second-biggest magazine publisher in the country.

Similar buyouts have not been offered elsewhere in the chain, but Advance President Donald Newhouse said The Ledger had been hit harder than most. Combined, The Times of Trenton and The Star-Ledger are losing between $30 million and $40 million a year, Newhouse said. As for The Star-Ledger, Newhouse said the paper relied more heavily on classified advertising, and those ads have been disappearing to the internet.

Advance has never sold one of its newspapers in a history dating to the 1920s, but Newhouse said the one-two punch of the economic downturn and sinking ad revenues was unprecedented and required a downsizing of personnel. If buyouts are accepted and union contracts renegotiated, he said, he is optimistic the paper will survive.

"There is no question that this is a necessity," Newhouse said of the changes. "Provided we cannot get voluntarily what we need -- and I am optimistic we will and we will avoid needing to sell it -- we have no choice but to sell."