Fresh Newsroom Cuts At Tribune Stir Mistrust As 'Vulture' Investor Looms

Inside the Tribune Publishing newspaper chain, all eyes are focusing on Thursday's annual shareholder meeting. The hedge fund Alden Global Capital is expected to consolidate its control over the company and usher in even more severe cuts than the ones the company has put in place.

Citing the economic effects of the coronavirus pandemic, Tribune has just announced unpaid furloughs at its properties, which include the New York Daily News, the Chicago Tribune and The Baltimore Sun. It has also cut pay permanently for many of its journalists.

While the pandemic has hurt news outlets across the country, many Tribune journalists are skeptical of the company's call for shared sacrifice.

In recent years, executives have prospered even as newsrooms have endured waves of cuts and layoffs. Shareholders have, too, most recently with a $9 million dividend payout in March.

Alden is expected to tighten the squeeze once it has greater influence over the company's actions. It has earned the title "vulture capitalist" from a leading analyst for driving increased profit margins at the more than 200 U.S. newspapers it owns through Digital First Media, even as the industry has plunged ever more deeply into financial crisis.

"We have members who are selling plasma to help pay for their groceries and their bills," says Sara Gregory, who covers education for Tribune's Virginian-Pilot in Norfolk, Va., and is chair of the local Tidewater Media Guild. "We have folks making lots of sacrifices to do the jobs that they've that they feel called to."

Tribune Publishing also owns regional dailies in Hartford, Conn., Allentown, Pa., Annapolis, Md., Newport News, Va., and Fort Lauderdale and Orlando in Florida.

Journalists vote to unionize as mistrust grows

Trust in the credibility of Tribune's corporate leadership — battered repeatedly over the past two decades — may well be at an all-time low.

The Orlando Sentinel has become the 10th Tribune Publishing bargaining unit to unionize in the past three years, according to the news guild, with many members citing a distrust of management.

"We will be a different company on the other side of this," Tribune Publishing CEO Terry Jimenez told staffers in a digital town hall earlier this month, according to audio obtained by NPR. "We will need to be structured differently. We need to think differently. We will need to be more flexible."

Jimenez declined to comment for this story through a spokesman, who cited the Thursday's meeting.

That flexibility has meant reporters making more than $40,000 a year are taking three weeks' unpaid furloughs over the next three months. Those making more than $67,000 in many newsrooms agreed to permanent pay cuts to try to stave off layoffs. But the company's promise not to institute layoffs holds only until late July.

"We didn't like the permanent pay cut at all," says Liz Bowie, an education reporter and union representative for Tribune's Baltimore Sun. "But we also felt that, given the situation in our country, we could not face the idea that five of our co-workers would be walking out the door almost immediately into an environment where they'd find it very, very difficult to get a job."

While many news outlets, including NPR, are implementing furloughs or pay cuts because of the pandemic, the ones at Tribune come after years of financial cuts.

Many reporters have gone without raises, even for cost of living, for years. Newsrooms have been decimated. In Baltimore, the Sun's newsroom now employs about a fifth of the people it did two decades ago. Tribune bought the New York Daily News in 2017 and cut its staff by half a year later. Similarly, in 2018, Tribune acquired the Virginian-Pilot in Norfolk — Virginia's largest circulation daily — and combined its newsroom with the smaller Newport News Daily Press. The blended news staff of journalists was slashed by almost half.

Virginian-Pilot reporter Sara Gregory says the community notices the difference.

"I get messages from sources. 'Why didn't the paper cover this or why didn't the paper cover that?' And a lot of times the answer is just manpower, right?" she said. "There are only so many things that we can do with the people that we have."

"We're already living paycheck to paycheck"

In late April, scores of journalists from across the company took to Slack, the company's internal messaging platform, for a digital protest, tagging Jimenez in each complaint. NPR reviewed the transcripts. Many were fueled by the pay cuts, but others were aimed at the payouts of tens of millions of dollars in shareholder dividends over the past few years.

"I'm a single mom that lives largely paycheck to paycheck. I love my job. I adore my career. And I have no illusions about the economic hardships the industry is facing right now," wrote a reporter from Allentown. "But the idea that Tribune could be putting myself and my colleagues on furloughs and permanently cutting the salaries of some while then turning around to pay out shareholder dividends feels like a betrayal."

"A pay decrease or furlough would be devastating for my family. We're already living paycheck to paycheck," wrote another from Chicago. "Any salary decrease could essentially decide whether my son can attend college."

Some union members celebrated afterward, saying they had spooked Jimenez into deactivating his Slack account. A corporate spokesman said the CEO had already quit the messaging service and preferred to communicate with employees in other ways.

Days after the protest, Jimenez held the video chat and addressed questions submitted by colleagues. He said the company's ongoing digital transformation had been accelerated by the COVID-19 crisis, with a spurt of new digital subscribers. But according to the recording obtained by NPR, Jimenez said, "the digital business model does not generate revenue." He noted buyouts earlier in the year, said calls for job shares to avoid further job reductions or furloughs would not be sufficiently cost-effective, and said newspaper sections would be collapsed or disbanded.

At one point, while noting he was not a financial adviser, Jimenez encouraged lesser-paid employees to embrace the unpaid furloughs: He said that given beefed-up unemployment benefits, they could make more money off the job for those weeks than they would on Tribune Publishing's payroll.

Executive's severance exceeds savings from newsroom cuts

The company had hoped to attain approximately $560,000 in savings from its newsrooms with the furloughs and cuts in pay, according to union officials in multiple newsrooms. Tribune Publishing is poised to pay a hundred thousand dollars more than that in severance pay to its general counsel, Julie Xanders, who is departing the company at the end of the month.

The company said it would suspend all shareholder dividends, for now.

On Tuesday, the News Guild released a study surveying journalists at Tribune's newspapers. Three-quarters of respondents said they worried about their ability to care for their family or to keep their jobs. Another three-quarters said the continued cuts have diminished the quality of journalism they produce.

Tribune employees took to the companywide Slack channel once more Tuesday. They announced they were taking lunch breaks in solidarity with furloughed colleagues. Tribune Publishing responded by limiting their ability to post comments in Slack.

In Baltimore, a push for local ownership

In Baltimore, the local news guild has joined with two major foundations to try to break the cycle.

"It's been very worrisome and troubling, the downsizing that's happened at the Baltimore Sun, and, really, newspapers across the country," says Matt Gallagher, president and CEO of the Goldseker Foundation in Baltimore. "There is no institution that I can think of that is more central to the day-to-day life of the city than the Baltimore Sun and a free and independent and robust local newspaper."

"It literally is part of the daily fabric of what happens in Baltimore every single day," Gallagher said.

Goldseker and the larger Abell Foundation (established with money from the sale of the Sun in 1986) pitched Tribune Publishing on selling the newspaper to them and a consortium of local figures. Gallagher declined to characterize the reception he received, saying he's looking ahead to the corporate board meeting accompanying Thursday's shareholder event.

Like many Tribune journalists, Gallagher has his eye on late June, when Alden Global Capital can increase its 32 percent stake in the company to more than 50 percent. Alden Global Capital is the primary investor in Digital First Media, which owns about 200 publications. Its record of intensive cuts and inflated profit margins in comparison to its peers has set newsrooms across the country on edge.

The union has urged shareholders to vote against Tribune's plans to seed its corporate board with two Alden nominees this week. Alden's president, Heath Freeman, keeps a low public profile. He did not return an inquiry seeking comment for this story through a former spokesman. [Copyright 2020 NPR]