Well, this is better than a Christmas ham: Star Tribune employees learned Friday they will receive company-wide profit-sharing in excess of the $500 per person floated in June. “Several hundred dollars more than $500,” explained publisher and CEO Mike Klingensmith, “because we have had a stronger second half of the year than expected.”
This doesn’t mean revenue rose in the Strib’s post-bankruptcy year; as far back as May, Klingensmith forecast ad sales slipping through 2010 and perhaps early 2011. Now, he says that operating profit (which excludes debt payments) “was higher than expected because revenue was down less than expected and costs were somewhat lower as well.”
He wouldn’t quantify the numbers except to say they were in line with what public companies are reporting. McClatchy Co. and the New York Times project fourth-quarter declines of 4-6 percent from a year ago. That’s a huge improvement from the 20 to 30 percent drubbings most took in 2009.
The Strib engaged in massive cost-cutting during 2009’s bankruptcy; their highest-profile 2010 cut occurred in January, when 27 newsroom staffers were let go. Some workers at the Heritage printing plant have lost hours; Klingensmith says “nothing recent or major.”
As the year progressed, the Strib actually increased its reporting staff, and plans a website re-do in early spring 2011. In his employee memo, Klingensmith noted the operating profits will also “shore up our company pension plans, pay our lenders, and make needed capital improvements and critical investments in the future of our business. Right now, our primary focus is on investing in programs and products that will generate more revenue in the long run, which is absolutely essential for our continued success.”
For employees, another sign of the company’s improving finances is a discretionary 401(k) match. Strib management announced a 25 percent match in July and will bump that to 50 percent in January.
The newsroom union fought for profit-sharing amid last year’s concessions, which included a frozen pension fund. David Chanen, the Newspaper Guild’s Strib co-chair, credits the company for taking the concept company-wide.
“We are happy the Star Tribune has turned the corner and become more stable financially,” Chanen says. “The company has signaled that they are now willing to invest in the newspaper’s future. The Star Tribune is an important part of our community, and we’re pleased it will continue to be part of people’s lives for a long time.”
Another reporter, mindful of the people and benefits lost but also 2009’s beat-down, described the mood as “grudging happiness.”
The happy news, grudging or otherwise, makes for an interesting scene-setter: The newsroom’s contract expires next summer, and we’ll see if a balmier present can produce management-labor peace.
(And with this, your humble scribe shutters Braublog through the end of the year. Thank you to sources, newsmakers and especially readers. See you in 2011.)