The Star Tribune, which grossed $303 million in 2007, is expected to bring in a staggering $100 million less this year, according to a bankruptcy court filing.
The paper’s David Phelps broke the story Thursday night, highlighting ownership’s request to abrogate its pressmen’s contract. That Teamsters local has been the most recalcitrant; its refusal to take double-digit wage cuts and changed work rules last summer upended concessions Teamsters drivers and mailers were willing to take. The three locals agreed to hang together on any givebacks.
Looking at the Strib’s survival plan — which would carve out a $30-million-plus profit on a projected $203 million in revenues — it’s not hard to see why the pressman would object. As Phelps notes, the proposal asks them to take $6-$12 wage cuts (roughly $12,000 to $24,000 a year), or between 23 and 50 percent of their salaries.
Unlike other Strib employees, the pressmen have so-called “manning” rules guaranteeing crew size, which makes it harder to cut jobs. (Though not impossible, especially as papers shrink: the Strib laid off 19 workers after the summer concession rejection.)
Assuming ownership isn’t overstating the revenue drop as a negotiating ploy, the paper’s post-bankruptcy profit margin would be at least 15 percent (at least $32 million on that $203 million in revenues). That would be enough to service restructured debt, ownership maintains. (Without union concessions, the Strib says, its profit would be about $3 million.)
But with revenues falling this fast — and the economy getting worse — how long could even this new plan work? Phelps says creditors have demanded an April deadline on labor concessions — but we haven’t yet seen how big a haircut creditors are willing to take. If the paper is truly to survive, the razor should slice close.