The Maine burden of the Seattle Times Co. might be soon lifted
A group that includes a former senator is negotiating to buy Blethen Maine Newspapers. But back home, the Seattle Times faces another fiscal challenge — the Teamsters and a possible labor action.
Good news and bad news in the cliffhanger saga of the Seattle Times Co.'s money woes. The good news: The company has a potential buyer for the Blethen Maine Newspapers chain. The bad news: a possible Teamsters strike in Seattle.
Facing what it had called in a lawsuit "the dire consequences of being in default" on bank loans if it couldn't find a buyer for the Maine chain, the company now reports that it is in talks with a syndicate that includes former Maine Sen. and U.S. Defense Secretary William Cohen, two Maine businessmen, including the brother of the governor, and Richard Connor, publisher of the Wilkes-Barre, Pa., Times Leader, who has a residence in Maine. No offer yet by the group, the Portland Press Herald said, but they "hope to conclude the process quickly" under a letter of intent.
In Maine, the privately held Seattle Times Co. owns the Press Herald and Sunday Maine Telegram, the Kennebec Journal in Augusta, the Morning Sentinel in Waterville, and MaineToday.com.
Connor, a Maine native, purchased the Wilkes-Barre paper from McClatchy in 2006 for $65 million in a partnership with HM Capital Partners, a Dallas-based buyout firm that specializes in underperforming media companies. (McClatchy owns 49.5 percent of the Seattle Times Co. and the Seattle-area Blethen family owns the rest.)
The Seattle Times Co. has been racing the clock to cut $1.2 million from the operating budget in Maine before default covenants on bank loans kick in this September. The company borrowed $230 million a decade ago to buy the Maine papers and has been in default twice.
In a statement reported by the Press Herald, Times Co. chief executive Frank Blethen said a purchase by the Maine syndicate "would provide a favorable outcome for the community, our readers, our employees and the Blethen family."
Meanwhile, the Times Co. now faces new labor problems on this coast: Teamsters Local 174, which represents 68 drivers of big trucks that deliver newsprint and other items for The Seattle Times and the Seattle Post-Intelligencer, notified the company Tuesday, July 29, that it is terminating its contract in 30 days and plans to take a strike authorization vote among members in the next week.
The contract between the Teamsters local and the Times expired at the end of February, but neither the union nor the company gave a required 30-day termination notice to cancel it, leaving it technically in place. The paper and the union, meanwhile, negotiated a company plan to outsource the Teamster jobs to a private contractor, Penske Logistics. But that plan fell through last month when Penske said the cost of the outsourcing wouldn't work for it.
Patty Warren, Local 174's senior business agent, says Seattle Times Co. officials informed the union July 24 that they planned to implement contractual provisions that would lower some union drivers' pay by $3.48 an hour. Teamsters bulk truckers now earn an average of $20.70 an hour at the Times.
"The Times has flexibility in scheduling under the contract," said Warren, "but we don't believe they have the right to cut our pay."
The 30-day notification clears the way for the Teamsters to call a strike at the Times and gives the company the right to lock out staffers who won't cross picket lines. While Warren's local represents only a small fraction of the total Times workforce, she has also asked leaders of the Pacific Northwest Newspaper Guild to file their own 45-day contract termination notice, in sympathy, and is seeking support from Local 767M of the Teamsters and Graphic Communications Workers, which represents Times press workers. The Guild contract expires July 31, and the press operators have negotiated a new contract with the Times, though they haven't ratified the deal. Without those contracts in place, both the Guild and press workers could honor any picket line set up by the truckers, said Warren.
Times Co. officials did not respond to Crosscut's request for comment. Spokespeople for the Newspaper Guild and the press workers also were not immediately available for comment.
A union fight in Seattle couldn't come at a worse time for the Times. In 2000, a 49-day strike by the Seattle guild knocked $50 million in holiday revenue off the paper's books and the company never recovered. In addition to the Blethen Maine Newspapers debt, the Seattle Times Co. also had to borrow last year for a $24 million legal settlement with Hearst, owner of the Seattle Post-Intelligencer and the Times partner in a joint operating agreement.
"We know the Times is in serious financial trouble," Warren told Crosscut. "Every time we meet with them they say they are hemorrhaging money and it's getting worse. But they're not going to solve their problem off our members' backs."
Comments:
Posted Thu, Jul 31, 2:20 p.m. inappropriate
Excellent Job: Crosscut and Bill Richards ought to be congratulated for the great job they are doing covering the on-going Seattle Times saga. By far they are providing the most interesting and most comprehensive reportage of any of the NW media. Kudos to you!
Posted Fri, Aug 1, 11:19 a.m. inappropriate
Lousy, biased job: I couldn't disagree more with the commenter above. From what I hear from Times folks -- including some in position to know -- Richards' Crosscut stories are rife with errors. And he so clearly has an axe to grind. If not, where are the stories about Hearst and the P-I? When Oglesby told his staff they were losing $10 million a year, where was Richards?
Posted Fri, Aug 1, 3:23 p.m. inappropriate
RE: Lousy, biased job: Tony–Usually, I pretty much ignore anonymous posters, citing anonymous critics, citing unspecified errors in unnamed stories. But since you are in touch with "some in position to know" I'll make an exception for you. Here's a Journalism 101 tip–if you want to get your side of an issue into a story, or simply point out a reporter's error, talk to the reporter. Pretty simple, huh? Unfortunately, the Seattle Times management has decided not to return my calls on any story. I always try, and then wait a reasonable time, before posting. Since January, there's been nothing but silence. As for the P-I's loss, I don't even think the Times reports newspaper losses like that any more, do they? Who isn't losing money in this business? The Times is another story entirely. It's a saga about honorable people making bad, ego-driven decisions, then facing the implosion of their business because of those decisions. The P-I will probably go away some day, at least in its current print form, whether or not Hearst gets to buy out the Blethens. No news flash there. The Times is another "story" altogether–at least it is to me, which is why I've chosen to follow it. That the Blethens have decided not to contribute is, of course, up to them. Mistakes will happen, especially in the online format, and we'll correct them when they are pointed out, as we have in the past. Next time you talk to "some in position to know," pass that on. They know where to find me.
Bill Richards
Posted Fri, Aug 1, 10:16 p.m. inappropriate
Nobel 174 Teamsters..............: I'm not going to get in the Blethen Maine papers fiasco.
All I'll write is:
Teamsters 174 walk on water, their members are nobel, and notable.
I can't write that about Frank or Ryan Blethen. I truly want to see the Times regain it's prestigue..... Sadly I doubt that will happen.... it's tough seeing where their headed with their head up their butt.
I need to add the rest of the Blethen family are good folks.....They really are!
Posted Sat, Aug 2, 7:41 p.m. inappropriate
RE: Nobel 174 Teamsters..............: Judging from your spelling, you must work for the P-I!
Posted Sat, Aug 2, 11:34 p.m. inappropriate
Tony the has been....: Judging by your position you are like the Seattle Times, a has been.