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Boston Globe Union Reaches 4AM Deal To Save Paper

DENISE LAVOIE   05/ 6/09 05:55 PM ET   AP

Boston Globe

BOSTON — While a tentative agreement between the owner of The Boston Globe and its largest employees union may keep the newspaper alive for now, the long-term future of the 137-year-old Globe is still uncertain.

The Globe reported on its Web site Wednesday that the proposal calls for employees in the Boston Newspaper Guild to take an 8.3 percent wage cut and a five-day unpaid furlough, for a total pay cut of roughly 10 percent. Other cutbacks include a freeze in pension contributions for many employees, an end to matching contributions to 401(k) accounts, and the elimination of lifetime job guarantees for 190 Guild employees.

The deal is subject to approval Thursday by the Guild's members, who include 700 editorial, business and advertising staffers.

Looming in the background of their vote is the threat the newspaper's owner, The New York Times Co., made last month to shut down the Globe if its unions did not agree to cut annual expenses by $20 million.

"We all have to be realistic here. I think the situation is dire," said reporter Shelley Murphy, who has worked for the Globe for 16 years. "It's going to be a serious whack, but I think the primary goal is to save the newspaper."

Even now, assuming the Guild membership approves what will amount to $10 million in concessions _ coupled with another $10 million in concessions already agreed to by the Globe's other unions _ the newspaper probably has not seen the last of the cutbacks it has endured in recent years. The Globe had $50 million in operating losses in 2008 and had been projected to lose $85 million this year.

"It's clear they are going to have to really restructure that business even further than they have done already," said Stephen Burgard, director of Northeastern University's School of Journalism.

Like many newspapers across the country, the Globe has struggled as readers have migrated to the Internet, advertising revenues have declined drastically and circulation has fallen.

This year alone, E.W. Scripps Co. closed the Rocky Mountain News in Denver, and Hearst Corp. stopped printing the Seattle Post-Intelligencer, making it online only. The Christian Science Monitor stopped daily publication in favor of a weekly print edition with online news.

Other major newspaper companies, including the owner of the Chicago Tribune and Los Angeles Times, have filed for bankruptcy protection.

Still others have had layoffs, pay cuts and unpaid furloughs to try to stay afloat. Employees at The New York Times agreed Monday to accept a 5 percent pay cut through the end of the year in exchange for 10 days of paid vacation. Gannett Co., the owner of USA Today and more than 80 other daily newspapers, is having many of its highest-paid employees take two weeks of unpaid leave.

In the Globe talks, a key sticking point was the lifetime job guarantees that offered protections from layoffs. Nearly 470 employees across six unions had the guarantees, including about 190 Newspaper Guild members. Most got the promises in exchange for concessions in a contract ratified in 1994, shortly after the Times Co. bought the Globe for $1.1 billion.

Media analysts said the Times Co. likely sought the newest labor concessions to attract potential buyers for the Globe.

"No buyer is going to pick up a business with people who they might or might not want with lifetime guarantees," said Tobe Berkovitz, a communications professor at Boston University. "The New York Times has wrung all these expenses out of the Globe and it will make it possible for a buyer to at least consider picking up the Globe."

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Filed by Danny Shea  |