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.
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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

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."


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