Pros and cons of the Star Tribune’s union battles

Press room circa 1930
Courtesy of the Minnesota Historical Society
Minneapolis Star and Tribune press room, circa 1930.

The bell tolled twice on Friday for America’s newspapers.

One death knell was for the Rocky Mountain News which published its last edition Friday after nearly 150 years of selling sometimes noble, sometimes cheesy, usually scrappy newspapers on Denver’s streets.

The second was the announcement that the American Society of Newspaper Editors had cancelled the annual meeting it had scheduled for April. Since their first convention in 1923, the editors have met every year except 1945 — even through 10 recessions — the Associated Press said.

“The industry is in crisis,” Charlotte Hall, ASNE’s president, explained to the AP.

“This is a time when editors need to be in their own news rooms doing everything they can,” to help their publications survive, said Hall who also is editor of the Orlando Sentinel.

The Rocky’s closing, in particular, reinforced fear that the sounding of the bell in the Twin Cities is inevitable. Like Denver, it is one of America’s few mid-sized metro areas with two large-circulation daily papers.

The suspense is whether it will sound here for the Star Tribune, which is seeking to reorganize in a Chapter 11 bankruptcy, or the smaller Pioneer Press, which is in sharp retrenchment.

In the interest of shaving dollars from its day-to-day bills, the Star Tribune recently asked for court permission to break leases for its St. Paul bureau and its suite at the Target Center. It also is seeking to drop contracts for everything from its drivers’ uniforms to the software that tracks its Web site performance.  

But it’s hard to say how the Strib’s bankruptcy is going because a crucial phase of reorganization is taking place in secret: negotiations with the unions representing hundreds of workers who write the stories, shoot the photos, run the presses, drive the trucks, etc.

The most contentious talks have been with the pressmen in Teamsters Local 1-M. The Star Tribune has moved in U.S. Bankruptcy Court in Manhattan to toss out the union’s contract.

Today is the deadline for the union to respond to that motion. Nothing is likely to be decided, though, before a hearing scheduled for March 11.

While the negotiations are secret, here is the gist of the arguments.

Star Tribune’s case
The pressmen have dodged and stalled while other unions accepted concessions in a bid to help save the newspaper, said a declaration filed by Randy Lebedoff, the newspaper’s senior vice president and general counsel. 

Almost a year ago, the newspaper began briefing its unions on the sorry state of the industry in general and its finances in particular. 

The Newspaper Guild, representing newsroom employees, accepted concessions in a contract that took effect Aug. 1, replacing one that was set to expire that day.

Leaders for three unions affiliated with the International Brotherhood of Teamsters — mailers, drivers and pressmen — also negotiated concessions. The rank and file of the mailers and drivers voted to accept the deal, but the pressmen overwhelmingly rejected it.

The pressmen’s contract, which is not due to expire until late 2010, guaranteed jobs for life to 51 of the members and top pay of $33.90 an hour to journeymen pressmen. The newspaper wanted to buy out 18 of the members, cut the top pay to $29 an hour and win other concessions.

Because the Teamsters unions had agreed to stand or fall together, the deal collapsed for all three unions.

Until Jan. 15, when the Star Tribune filed its bankruptcy, the pressmen rejected or delayed several attempts to launch new negotiations, Lebedoff said. (Her detailed declaration and other court documents can be found here.)  

The pressmen’s case
The biggest of the Star Tribune’s problems is the debt the owners, Avista Capital Partners, took on in 2007 when they borrowed all but $100 million of the $530 million they paid for the newspaper.

The newspaper was profitable through 2008, though less and less so. Concessions it had set for its unions seemed arbitrary and almost insignificant given that Avista and its lenders were wrestling with much larger problems of their own making, said Andrew Staab, an attorney for the pressmen’s union.

“The Star Tribune had been trying to tell us they needed to bring their operating costs down, and we agreed with that,” Staab said. “But why these particular numbers? . . . We don’t want to just roll over based on the Star Tribune’s plea for help because they are in financial trouble. We want to find out how all of this going to fit in for the future.” 

The newspaper shared confidential financial information during the months of pre-bankruptcy wrangling, he said, but it never disclosed its full financial picture, never shared enough detail to convince the union it wasn’t being asked to salvage cash for Avista and its lenders rather than to save the newspaper.

Now, operating under bankruptcy court rules, the Star Tribune is disclosing more information, he said, and the union is having it analyzed by Matrix Associates Inc., a company that specializes in business turnarounds.  

Progress has been made, Staab said, in negotiations since Feb. 26 when the newspaper filed its motion asking the court to throw out the contract.

But he acknowledged that the union has few options at this point.

“The motion is there, it is staring at us,” Staab said. “The only leverage we have is hope that a judge will agree with us that a rejection of the contract isn’t necessary because the parties are negotiating, and that the Star Tribune really has to follow all of the rules before the court will grant the motion.”

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Comments (3)

  1. Submitted by Jessie Fallon on 03/02/2009 - 11:31 am.

    Is the problem that the newspaper is a money-losing business, or that the new owners loaded a going concern with massive debt in order to take it over, ala Cecchi and friends with NWA? Perhaps the moral is that financial plays don’t always play as anticipated.

  2. Submitted by Bruce Adomeit on 03/02/2009 - 12:24 pm.

    The photo accompanying this article was not taken in the press room. The workman was in the stereotype department, where curved letterpress printing plates were cast in metal. One of the plates is visible in front of the workman, who then would remove the plate from the casting machine and put it on a conveyor belt for transport to the press room.

  3. Submitted by William Wallace on 03/03/2009 - 12:38 am.

    I would subscribe to the Star/Tribune if they stopped with their moonbat perspectives.

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