Staff at Kingston’s only daily newspaper are bracing for layoffs as the Freeman’s parent company emerges from bankruptcy with a plan to shed costs and, potentially, cut editions.
The Journal Register Company, owner of the Freeman and dozens more daily and weekly papers in the Northeast and Midwest, went into Chapter 11 bankruptcy protection last September. It was the troubled media conglomerate’s second journey through the bankruptcy court since 2009, when JRC emerged with a new “digital first” philosophy espoused by new CEO John Paton. Over the next year, Paton led a reorganization which included transferring production of the Freeman from Kingston to another JRC printing plant in Troy and outsourcing distribution and other company operations.
But a reported 235 percent increase in digital revenue failed to offset a 19 percent decline in revenue from print advertising sales. In 2011 JRC reported revenues of $167.1 million in print advertising, $86 million from circulation, and $30.1 million from digital sources, indicating that digital has a long way to go before it becomes the dominant revenue source. At the time of its second bankruptcy in September 2012, the company reported $225 million in liabilities and a revenue stream unequal to its financial obligations.
Last week, 21st Century CMH Acquisition Corp made the sole bid for JRC assets, $122.15 million. The new buyer is a subsidiary of JRC’s current owner, Alden Global Capital LLC. The maneuver, known as a “stalking-horse bid,” allows the company to wipe out certain liabilities and if it wishes existing labor agreements.
JRC employees at seven newspapers in Kingston and the Philadelphia and Detroit areas are currently represented by The Newspaper Guild, a 32,000-member union under the umbrella of the Communications Workers of America. Shortly after the acquisition, JRC employees, including staff at the Freeman received a letter essentially laying them off and inviting them to reapply for their positions under new conditions. The letter starts by informing the “potential candidates” that that the new terms include “at will” — non-union — employment, a 15 percent cut in wages, an end to employer contributions to the company’s 401(k) retirement plans and a provision that employees will pay 50 percent of their health insurance premiums.
Hard bargaining
Calls to the Freeman’s publisher were referred to an official at JRC who did not return calls for comment. But Tim Schick, director of administration for the Guild, described the letter as a bargaining position laid down by the company as both sides work to reach a new labor agreement.
“That’s what the company is putting out as their initial terms of employment if an agreement can’t be reached at the bargaining table,” said Schick.
Schick said that company had last been in talks with union officials in mid-February. Schick and Kingston local Guild president Patricia Doxsey, a Freeman staff reporter, declined to discuss the outcome of earlier negotiations or whether the local had taken a vote on the contract proposal. But according to the Kingston local’s Facebook page, the layoff letter came after Guild members rejected a contract offer from the company.
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