The News Guild honored Dean Olsen with the Larry Cohen Movement Building Award at its national Sector Conference Aug. 4 in Pittsburgh.
Olsen, a decorated news reporter, led our organizing drive at the State Journal-Register and served as Springfield unit chair since Day 1. He followed that internal organizing success — which resulted in a 26-4 vote to unionize — by leading a textbook external organizing effort in central Illinois.
With Olsen leading the charge, our Springfield members reached far beyond the local labor community for support in their fight against the asset-stripping GateHouse Media management. These journalists manned an information booth at the Labor Pavilion at the Illinois State fair and encouraged readers from across the region to sign support cards to be forwarded to the newspaper’s management.
The SJ-R staff also gained the support of political, business and religious leaders who agreed that Springfield deserved a first-rate newspaper — something GateHouse threatened with draconian staff cutbacks and a years-long pay freeze at the profitable publication.
Olsen and Co. staged successful public demonstrations, drew extensive media coverage and gained advertiser support. The backed their “Save the SJ-R” radio advertising campaign by making numerous speaking appearances in the community.
Those efforts finally coaxed a contract proposal from GateHouse, but it did not include raises. The Springfield unit voted down the offer and has worked under imposed conditions since while continuing its fight for a fair agreement.
Olsen assisted in our successful organizing drive at the Rockford Register Star, working with activists at that GateHouse newspaper to win another vote. At the behest of The News Guild’s national office, he made contacts at news operations across the country and triggered successful organizing drives in Lakeland and Sarasota.
Those are the first two Guild newspapers in Florida, which is notoriously hostile to labor unions.
Olsen was an obvious choice for this award, which is named after retired Communications Workers of America president Larry Cohen. (Appropriately, the first winner of the national award was Olsen’s mentor in the labor movement, UMG business representative Shannon Duffy.)
Cohen urges local unions to build bargaining power by joining the larger progressive movement and becoming part of a broader coalition. Olsen succeeded on local and national levels, rallying public support for the State Journal-Register contract push while also inspiring journalists to join the larger corporate campaign against GateHouse.
The UMG has been blessed with many remarkable leaders over the years and Olsen stands tall among them. His groundbreaking internal and external mobilizing creates vivid best practices for current and future activists to follow.
As the Illinois Times recently reported, the beleaguered news-gathering operation at the State Journal-Register in Springfield continues to operate under adverse conditions.
When a heat wave washed over the Midwest, the air conditioning at the SJ-R building began faltering, as the Times reported:
Air conditioning at the State Journal Register went on the fritz more than a week ago, and with temperatures climbing to the high 90s in recent days, it’s still not fixed.
Fans and Popsicles have been distributed, but to little effect, according to one employee who said that the temperature in the newsroom, on the building’s top floor, is in the 80s. Some folks reportedly have been allowed to work from home.
“It’s really hard to write when you’re sweating on things,” said one scribe. The AC started acting up about two weeks ago, one source said, and while it still works, it’s a case of barely works. Employees have been told that the problem is being worked on, but have not been told when it might get fixed.
The United Media Guild’s executive board authorized the Springfield unit to rent some stand-alone air conditioning units to get the newspaper through the crisis. But SJ-R executive Angie Muhs prevented the Guild from bringing the units into the building to make the workplace more comfortable for members and managers alike.
Muhs did allow some journalists to work from home, but obviously that is not feasible for everybody in the newsroom. For those who had to stick out, the Guild supplied water and Gatorade to keep employees hydrated.
Journalists at the State Journal-Register are joining the GateHouse Media colleagues and Digital First Media employees in a day of action to protest against their asset-stripping corporate management.
Here is The NewsGuild’s news release on the national effort:
WASHINGTON, D.C. (April 28, 2017) – A broad coalition of 1,500 unionized news workers will conduct a joint day of action on May 3 – World Press Freedom Day – as part of a national campaign to protest the corporate-led assault on quality journalism. The coordinated effort by NewsGuild members will span 29 newspapers owned by GateHouse Media and Digital First Media.
It will support the fight for quality journalism at those papers and highlight the damage wrought by draconian cuts in their newsrooms and other departments. Now, union leaders say the focus on profits threatens journalism at a critical time of politicized attacks on the news media.
“Reliable information is the foundation of our democracy,” said Bernie Lunzer, president of The NewsGuild-CWA, based in Washington,D.C. “Corporate owners have a duty to invest in the essential work done by newspaper workers and not to simply strip-mine newspapers for profits.”
The joint effort by GateHouse and Digital First Media workers marks an unprecedented NewsGuild campaign to demand that corporate owners invest in quality jobs and fair contracts after years of layoffs, furloughs, pay freezes and benefit cuts. Contract negotiations are under way or expected to resume soon at both companies, but managements have shown little interest in changing course.
Workers at GateHouse and Digital First Media have endured some of the most vicious staff reductions in the news business. Alden Global Capital, a secretive New York hedge fund, owns DFM and has slashed staffing levels by more than twice the national average during the past five years, while pocketing millions by selling off the company’s real estate assets. GateHouse owns and/or manages 564 community print publications, including more than 130 daily newspapers, under the New Media Investment Group umbrella.
New Media is a publicly traded company, externally managed by Fortress Investment Group. Under New Media’s business model, the company buys newspapers, strips them down to maximize cash flow, and uses that money to pay dividends, pay bonuses to corporate officers and fund more acquisitions. As the company gets bigger, Fortress collects larger management fees – roughly $54 million the previous two years alone.
The 13 Digital First bargaining units represent workers at 12 newspapers, including the Denver Post, San Jose Mercury News, St. Paul Pioneer Press, and suburban publications in the Bay Area, Philadelphia, and Detroit markets. Last week, DFM announced that it would lay off more than 20 percent of the Guild-covered newsroom staff at the East Bay Times, just one week after it was awarded journalism’s highest honor, the Pulitzer Prize, for breaking news coverage of the deadly “Ghost Ship” warehouse fire in December.
The 15 GateHouse bargaining units represent 580 workers at 17 newspapers, including the Providence (RI) Journal, Worcester (MA) Telegram and Gazette, Erie (PA) Times-News, Peoria (IL) Journal Star, Springfield (IL) State Journal-Register, Rockford (IL) Register Star, Utica (NY) Observer Dispatch, The Herald News (Fall River, MA), The Enterprise (Brockton, MA),The Patriot Ledger (Quincy, MA), Lakeland (FL) Ledger, and the Sarasota (FL) Herald-Tribune. The staff of the Herald-Tribune, a newly organized Guild unit, shared the 2015 Pulitzer Prize for investigative reporting with the Tampa Bay Times for their five-part series “Insane. Invisible. In Danger.” That collaborative project detailed horrific conditions in Florida’s mental hospitals.
In the new campaign, the Guild is pushing back nationwide before media profiteers cause further wreckage to the communities they are supposed to serve. The May 3 World Press Freedom Day action will include the display of pro-journalism literature at desks and other work stations, and appeals for public support in local communities and online. The theme: “Democracy Depends on Journalism” and “Invest in Us.”
The action will mark the first coordinated effort by news workers at the two companies to demonstrate solidarity in the workplace and remind the public that quality journalism matters. NewsGuild members are reaching out to allies, including journalists working for other employers – both union and non-union – as well as community advocates concerned about the corporate gutting of newsrooms across the United States.
Kirk Davis is CEO of GateHouse Media, which owns and/or manages newspapers like the State Journal-Register for the parent New Media Investment Group.
And when we say manage, we mean “suck as much cash from each newspaper as possible” while diminishing its ability to perform quality journalism and serve its community.
According to New Media’s latest proxy, Davis earned $1.4 million in salary, bonus and stock awards for 2016. He got a 10 percent bump in salary, up to $550,000, and a $500 million bonus — down from his $800,000 bonus the year before, when the company sold the Las Vegas Review-Journal for a huge profit under ethically murky circumstances.
On his watch, the company has enforced a wholesale wage freeze and churned journalists, salespersons, publishers, regional executives and even national-level executives.
But he keeps generating the positive cash flow to pay dividends and fund further acquisitions. That drives up the management fees paid to Fortress Investment Group, the money guys behind this whole enterprise.
In the past three years Fortress has raked in $54 million in fees while newspapers like the State Journal-Register faced staff reductions and many journalists endured 36 more months without a raise.
Just when you think you’ve seen everything in contract negotiations, GateHouse Media surprises you with something even more draconian.
This week GateHouse offered its most onerous proposal to date at the Rockford Register Star: Retroactive medical and dental insurance premium increases or, if the employee chooses, a corresponding salary reduction instead.
Medical and dental insurance premiums for United Media Guild members at the Register Star have been frozen since the union was voted in, due to “status quo” labor law protections that remain in place during negotiations.
Since GateHouse steadfastly refuses to offer raises — even though some employees have endured an eight-year wage freeze — we’re still at the bargaining table.
According to company calculations, a UMG member with the Basic PPO-Family has been spared more than $5,000 in medical premiums from 2014 through 2016. An employee with family dental coverage has saved about $1,500.
(Most UMG members insured through the Register Star are on either the single or the employee-spouse plan.)
With a straight face, company negotiator Ali Zoibi said GateHouse wants that money back with “catch-up” increases. Moving forward, GateHouse also wants increases for 2017, up to nearly $2,000 for family medical and nearly $500 for family dental.
And, of course, GateHouse is offering no raises to offset any of his. As a result, several UMG members would lose between $4,000 and $9,000 in take-home pay in 2017.
Mind you, this is the same company that has slashed the newsroom operation to a fraction of its former size, making surviving journalists shoulder a much more challenging workload.
Destroying employee morale makes it easier to cut labor costs, so GateHouse works extra hard at being a terrible employer. Why else would it propose a $9,000 pay cut for veteran journalist trying to support a family?
By running off veteran journalists, it can hire younger employees at much lower pay scales. So what if the newspaper product suffered? Vulture capitalists own GateHouse Media and they are playing the asset-stripping game.
The whole point is to vacuum as much money out of each operation as possible to fund stock dividends, bankroll more newspaper purchases and keep the game going.
But GateHouse really outdid itself with this proposal.
The United Media Guild demands to bargain over the hiring of new journalists at the State Journal-Register in Springfield and the Rockford Register Star.
Why would we take such a direct interest in the company’s newsroom management? The short answer is we are fighting to maintain the quality of journalism at these newspapers and the long-term viability of these institutions.
The long answer is, well, pretty long so we’ll walk you through it.
GateHouse Media, which owns these newspapers under the New Media Investment Group, has slashed the news operations to a fraction of their former size. The company maximizes cash flow so it can pay quarterly dividends, buy more newspapers, slash staffing at those newspapers, maximize cash flow, pay quarterly dividends, buy more newspapers, slash staffing, maximize cash flow . . . you get the idea.
The money guys backing of all of this, Wes Edens and Co. at Fortress Investment Group, collect huge external management fees for orchestrating this plan. If New Media Investment Group eventually collapses due to shrinking paid circulation and declining advertising revenue, Fortress will be just fine. It will have is money. The newspapers and the communities they once served will NOT be just fine.
Concern over the decline of GateHouse/New Media newspapers has inspired journalists to unionize. Newsroom employees in Springfield and Rockford voted to join UMG and this local also assisted two successful organizing drives in Florida, at Lakeland and Sarasota.
To maximize cash flow, GateHouse Media has refused to bargain raises at all of their Guild-represented newspapers for last eight years. It also refuses to bargain raises in first contracts at newly organized newspapers. The company is also demanding extremely low minimum pay rates ($13 per hour, less than a living wage) for its new hires. The UMG has argued for higher minimums that would help attract better applicants, reduce turnover and protect the institutional knowledge in the newsroom.
Because the company won’t set reasonable minimums, the UMG has taken a direct interest in the hiring process. We can demand to bargain the pay rates of new hires in Springfield because GateHouse declared a bargaining impasse and imposed working conditions. By doing so, GateHouse forfeited its managerial discretion under labor law.
In Rockford, we can demand the right to bargain over changes in the workplaces, including new hires, as part of our quest for a first contract at the Register Star.
To better understand the hiring process, the UMG has requested relevant information such as candidates considered, past hiring practices and prevailing hire-in rates at similarly sized newspapers in the chain. Our goal is not to prevent the hiring of new employees, but to make sure the company is attracting quality journalists to fill these key roles in its understaffed newsrooms.
Rockford Register Star executive editor Mark Baldwin complained about this in a letter to our members. In part, it read:
It seems that the Guild’s strategy is to hurt several GateHouse locations because the union is making the same requests in Springfield and Erie. The union’s national agenda ignores the very real needs of the local properties and local communities, and this I find particularly troublesome. I know for a fact that in Springfield, the union’s stalling tactics have delayed hiring by more than six weeks. Insisting on bargaining and then refusing to meet for weeks, and drawing out the process to make it take as long as possible, is standard operating procedure for this Guild local. It defies common sense that the Guild would invoke that tactic when all the Register Star is trying to do is hire good people once we have the approval to do so. It also bothers me that members of the negotiating team, our colleagues, would want to obstruct hiring in this way — especially given the Guild’s outspokenness about the slow pace of hiring already. The union position is rank hypocrisy.
Actually, accusing the Guild of stalling is rank hypocrisy given the actions lead company negotiator, Ali Zoibi. Year after year he steadfastly refuses to bargain raises to end a pay freeze that has prompted wholesale departures. He refuses to raise minimums to the pay level the company has generally used in Springfield and Rockford. He imposed conditions in Springfield and has reiterated, again and again, that he won’t agree to a contract there that includes raises and an increased minimum.
Along the way, the company has run up legal bills while triggering one Unfair Labor Practice charge after another with the National Labor Relations Board. It chooses to fund endless negotiating stall tactics, but it won’t invest in its journalists and its newspapers through fair contracts. That is all part of the overriding goal of maximizing cash flow without regard to the impact on the news-gathering operations.
The company’s stance is absurd and insulting, even by standards in the distressed newspaper industry. But at least it is consistent. Back when Register Star employees were preparing to vote on whether to unionize, GateHouse executive Brad Dennison personally implored them to vote no. But he also admitted the company must find ways besides raises to rewards its superstars because, well, there would be no raises.
Since then Dennison has left from the company. So have many of the Register Star journalists he tried to sway. Many GateHouse publishers, newsroom managers and journalists from around the country are gone too.
The United Media Guild is still here, still fighting for journalists and journalism. We want to work with conscientious editors like Baldwin to make sure cities like Rockford still have a newspaper worth believing in. If that means will must get involved in the hiring process, so be it.
We would rather just have a fair contract, like the ones we have negotiated with other media companies, but GateHouse is having none of that.
A great news-gathering operation is immersed in its community, providing a public service by chronicling key events and exploring critical issues. But layoffs have cut the State Journal-Register staff to a fraction of its former size. The company’s 8 1/2-year pay freeze has prompted quality journalists to move on to other jobs. The scope and depth of the newspaper’s coverage has suffered. Springfield deserves better from the SJ-R’s New York-based owner.
WALL STREET AND THE SJ-R
New Media Investment Group is the parent company of GateHouse Media, which operates the State Journal-Register and hundreds of other newspapers. Fortress Investment Group launched New Media, along with other private equity vehicles in businesses like sub-prime lending and golf course management. Fortress collects hefty management fees for overseeing them. According to the New York Times in a recent article, “Last year, Fortress received more than $200 million in revenue from these companies, about a 50 percent jump from the year before.”
BUY AND CUT, BUY AND CUT
Fortress entered the newspaper industry in 2005 by buying the Liberty Publishing Group. Re-branded as GateHouse Media, the company went on a spending/slashing spree. It bought newspaper after newspaper, cutting staff each time. Gatehouse landed the SJ-R in 2007 and began chopping reporters, editors and photographers. Over time the printing operation moved to Peoria, allowing the company to sell off the Springfield presses. The design desk eventually ended up in Austin, Texas. Despite the profitability of its pared-down properties, GateHouse fell into prepackaged bankruptcy in 2013 due to its excessive acquisitions debt.
MORE PLUNDERING IN SPRINGFIELD
Fortress doubled down on its newspaper bet, re-launching GateHouse as part of the larger New Media Investment Group. The new company emerged from bankruptcy, went public and vowed to spend up to $1 billion in new acquisitions. Yet the newsroom cuts and the wage freeze continued at the SJ-R. The company siphoned off profits to underwrite acquisitions and to pay hefty stock dividends — totaling $224.6 million after three years. It bought more newspapers, cut more jobs, added more cash flow, paid more dividends, bought more newspapers and so forth. The bigger the company gets, the more management fees Fortress collects. And if the company collapses again, Fortress will come out fine. It has already collected $45 million in management fees and incentive compensation on this gambit.
OUR FIGHT TO SAVE THE SJ-R
Newsroom employees voted 26-4 to join the United Media Guild and gain a collective voice in the operation. They love their craft and their community. They want keep experienced journalists in this newsroom, doing good work for the people of Springfield. They are fighting imposed conditions that would extend their wage freeze to nearly 12 years. They are fighting the employee churn that extends to upper management. Since unionizing, our members have worked for four different SJ-R publishers. Top GateHouse news executives Brad Dennison and David Arkin have moved on as well. They cared about journalism. But New Media isn’t about journalism, it’s all about cash flow, acquisitions, hefty management fees and big dividends (while they last) for Wall Street investors.
During our battle for a first contract in Springfield, Ill., GateHouse Media has absolutely, positively refused to negotiate raises.
The company took this hard line even though GateHouse emerged from bankruptcy flush with capital as part of its new parent company, New Media Investment Group.
The company took this draconian stance despite the positive cash flow generated at the State Journal-Register and the company overall.
GateHouse maintained its abusive pay freeze despite massive newsroom cuts that forced surviving journalists to shoulder greater workloads while trying to stem the eroding quality of the SJ-R.
Company negotiator Ali Zoibi even refused to offer bonuses tied to newsroom performance, though our members have done an outstanding job driving digital traffic and fulfilling other company initiatives under increasingly difficult conditions.
His “last, best and final” offer amounted to a pay cut for our members — many of whom had gone 8 1/2 years without a raise. Not surprisingly, our members voted down that offer.
So the company declared impasse and imposed conditions on our members, essentially extending its wage freeze for another three years. The imposition of these conditions could result in some members going 11 1/2 years without a raise.
That’s eleven and one-half years.
While these imposed conditions includes annual bonuses, the company is jacking up medical premiums from nearly 15 percent to 27 percent, depending on the employee’s plan. This will result in an imposed pay cut for many of our members.
Meanwhile GateHouse media is vacuuming cash out of Springfield to fund New Media Investment Group dividend payments and acquisitions. By buying more properties, the company is creating greater cash flow — and masking the damage that excessive cost-cutting has done to its existing properties. Readers and advertisers have grown weary of paying more for less.
As a result of all this, the United Media Guild has no choice but to escalate its public campaign in Springfield. It will also join other NewsGuild locals across the country in a concerted corporate campaign against the vulture capitalists at GateHouse/New Media.
We’re hearing lots of happy talk out of New York about New Media Investment Group, the parent company of GateHouse Media and the State Journal-Register.
The company has plowed forth on a buying spree, becoming one of the few big players left in the newspaper industry. On his fourth quarter earnings call with analysts, New Media CEO Michael Reed said the company could spend up another $360 million on acquisitions this year.
Even after giving a glowing earning report and paying another healthy dividend, though, New Media stock dipped to $15.26 per share Friday — well below its 52-week high of $25.62 and about one-third of the long-term price some analysts predicted the stock should reach.
Some commentators have doubted whether New Media’s strategy will work as well at bigger papers it bought in Columbus and Providence as it has with earlier additions of smaller papers.
In the conference call with analysts, Reed argued that the market undervalues New Media. The newspaper sector, he said, is “out-of-favor and fragmented,” and that leads to New Media being “misunderstood.”
New Media has since scaled back its management agreement in Las Vegas and backed away from the mess, but not before its egregious ethical lapses drew extensive national coverage in both the industry and the mainstream media. The controversy triggered rumblings of an unhealthy rift between Reed and Kirk Davis, the New Media COO and GateHouse CEO.
Of course, New Media/GateHouse management is creating even greater concerns of interest. Let’s run down the list:
Core product deterioration. New Media/GateHouse has cut newsroom operations to a fraction of their former size. Even after emerging from bankruptcy flush with cash, it continued running off veteran reporters, photographers and editors and hiring entry level replacements — often at less than a living wage. The constant cutting and churning keeps diminishing the “strong and trusted local brands” the company touts to investors. Outsourcing copy editing functions to its Austin design center has further diminished content quality, since ever-changing workforce there is far removed from the communities New Media/GateHouse newspapers serve. In many cases editors have little knowledge of the people, places and issues in the stories they process. As a result, more obvious errors end up in print.
Gouging subscribers. While circulation is plummeting at many properties, the company offset that decline by raising subscription and newsstand prices and making subscribers pay extra for “premium sections” that are essentially advertorial fluff.
Vulture capitalism. John Levin, chairman and chief executive of Levin Capital Strategies L.P., called for more independent directors for the companies spun out of Newcastle Investment Corp. to reduce the obvious conflicts of interest. The external management structure of these spin-offs reward the money guys backing the enterprise, Wes Edens and the Fortress Investment Group LLC, while putting shareholders in some peril. Levin notes that Fortress gets paid to build size, not to necessarily create better performance. As Levin noted about another Fortress property, New Senior Investment Group, perhaps a buyer will come along and save the company for the long haul. The same could occur for New Media. Readers of newspapers like the SJ-R could only hope so.
GateHouse Media is still refusing to offer raises to hard-working journalists at the State Journal-Register. Its last contract offer did not include pay increases, so, not surprisingly, the Springfield unit of the United Media Guild rejected it unanimously.
Negotiations are on hold while the Springfield unit of the United Media Guild gathers additional public support
Writing for the Illinois Times, here is how reporter Bruce Rushton described the contract rejection:
Newsroom employees at the State Journal-Register tonight rejected a final contract offer from GateHouse Media, the company that owns Springfield’s daily newspaper.
The vote was unanimous, according to Shannon Duffy, administrative officer for the United Media Guild, which represents newsroom workers. There are approximately 25 workers in the bargaining unit.
Reporters and other newsroom employees have gone without raises since GateHouse purchased the paper eight years ago, and pay increases had been a sticking point in contract negotiations between the company and the union. Employees voted to form a union in 2012.
Management offered $600 annual bonuses for the life of a three-year deal, Duffy said, but that was contingent on an open shop, meaning that employees would not be compelled to join the union or pay union dues. Management and the union had tentatively agreed to a number of working conditions, including rules governing transfers and promotions, leaves of absence, holidays and rules governing discharge and discipline, according to the union.
Union leadership had recommended that the bargaining unit reject management’s latest proposal, which Duffy said was a “last, best and final offer.”
“It (the offer) would not create a better workplace,” union leaders wrote in a Jan. 27 memo to union members. “It would simply codify the one you are trying to change. GateHouse has been buying up properties like it is the Golden Arches of journalism. That doesn’t mean newsroom staffers should be tied to a McDonald’s pay scale.”
The McDonald’s comparison was an obvious reference to the plight of Dean Olsen, an SJ-R reporter and union organizer who took a job at the fast-food chain to make ends meet. Olsen’s moonlighting at McDonald’s, first reported by Illinois Times, received national attention on websites and blogs devoted to journalism.
“How crazy is it that just as the $15 an hour minimum wage movement is building steam for fast food workers, GateHouse insists on a minimum rate of $13 an hour for fulltime journalists and $11 for part-timers?” union leadership wrote in the memo. “Will there be fries with that?”
Union leaders in the memo said that GateHouse was too quick to present a final offer.
“(F)or some reason, this company seems to have given up trying to work out differences on the remaining issues,” union leadership wrote. “Instead, it presented – in our view very prematurely – a final offer, insisting that it get its way on all unresolved issues.”
Although the offer presented by management was a final one, Duffy said that another negotiating session is scheduled for Feb. 11. Presuming no accord is reached, management could declare an impasse and install all or part of the conditions in the final contract offer, Duffy and Olsen said. The union could appeal a declaration of impasse to the National Labor Relations Board, asking for a ruling that no impasse exists, they said. If the NLRB rules that there is no impasse exists, negotiations would continue, they said.
“The ball truly is in their court right now,” Duffy said. “We remain committed to getting a contract.”
If an impasse is declared and the company installs provisions in its final offer that have been rejected by employees, options for the union range from going out on strike to organizing a boycott of subscribers or advertisers or both, Duffy said.
“It gets really interesting from this point forward,” he said.