Estimated read time: 3-4 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
PITTSBURGH (AFX) - The owners of the financially ailing Pittsburgh Post-Gazette said Thursday they are prepared to sell the 220-year-old newspaper if its unions don't agree to new contracts that would significantly reduce costs and change work rules by year's end.
The newspaper has lost $23 million since 2003 and, facing its fourth consecutive year of losses, must get union concessions, the newspaper said. This year, the paper lost nearly $12 million through August.
"The Post-Gazette's financial condition reflects, more than any other factor, the failure of current labor contracts to address the issues of rapidly rising costs and declining revenue," said David Beihoff, the paper's president.
The paper's 14 unions, representing more than 1,100 employees, "must be willing to negotiate new contracts that would restructure the Post-Gazette to lower costs significantly, streamline staff and change existing work rules that currently inflate staffing and compromise efficiencies," said Beihoff.
Mike Bucsko, president of the Newspaper Guild of Pittsburgh, and Joe Molinero, president of the Teamsters local representing drivers and circulation, said the unions were willing to work with the company.
The unions, for example, were willing to start paying for part of their health care, eliminate positions and reduce overtime, Molinero said. The company responded by presenting a contract that Bucsko and Molinero said would undo union protections.
"We're certainly cognizant of the situation they're in, but their approach, it's very draconian and if they expect to obtain an agreement, they need to change their strategy," Bucsko said.
Asked if streamlining would include job cuts, Tracey DeAngelo, the newspaper's director of marketing, said it would be premature to speculate about potential changes.
"We want to make this a viable paper and keep it under current ownership," she said. "We are committed to resolving these financial issues in the best interests of the Post-Gazette, our employees, our readers, our advertisers and the entire community."
The paper spends 70 percent of its revenue on employee costs, compared with 40 percent at comparable newspapers, she said.
John Morton, of Morton Research Inc., a longtime newspaper industry analyst, said a 70 percent labor cost is "very high." He said the typical costs are closer to 50 percent.
"It's unusual for a paper with that much of the market to lose money," he said.
The paper has a daily circulation of more than 235,000 and a Sunday circulation of nearly 400,000. It has 247 newsroom employees.
Morton said a long-standing rule of thumb is that there should be at least one editorial employee for every 1,000 in circulation, based on a seven-day daily average. That would mean 259 jobs based on the Post-Gazette's figures.
The Post-Gazette's newsroom staffing is "not extraordinarily low, no, but it's certainly not fat," Morton said.
The Post-Gazette is owned by Block Communications, which also owns The Blade of Toledo, Ohio, where the company is engaged in a bitter battle with its unions. Most of The Blade's labor contracts expired in March and about 200 workers there -- including engravers and drivers -- have been locked out and replaced by temporary workers. Copyright 2006 Associated Press. All rights reserved. This material may not be
Copyright 2006 AFX News Limited. All Rights Reserved.
