Newspaper Ends “Horrible Experiment” With Offshore Customer Service

20 Nov

WHAT MAKES THIS extra interesting is that this is a Journal Register Co. paper. Be sure to read the comments on the Facebook page where the news was originally announced.

From jimromenesko.com: “Michigan Newspaper Ends ‘Horrible Experiment’ With Offshore Customer Service,” Nov. 20, 2012.

For about two years now, Mount Pleasant (Mich.) Morning Sun readers with delivery complaints have been sent to a call center in the Dominican Republic — and often not getting satisfactory results.

“Language barrier was a huge problem,” editor Rick Mills tells me in an email.

>snip<

Mills credits Journal Register CEO John Paton for trying the outsourcing, seeing that it didn’t work, and then going back to the old way.

>MORE

And bear in mind that outsourcing and layoffs were written into the contract recently ratified by the Non-Newsroom Unit. From a July 27 post:

In order to reach agreement on the full contract, The Post continues to insist that any agreement must include the amount of savings from the circulation call centers that they can achieve by sending that work to Honduras. After months of trying to negotiate an agreement that would keep the call center work at the Post, but reduce costs enough to be competitive with a Central American call center, it has become clear that the math just will not work. So the union presented a proposal accepting the outsourcing of the call center work in exchange for additional compensation and benefits for those who will be displaced but will continue working until their job is eliminated, increased compensation for call center employees who are retained and a timeline for the transition of work to Honduras. Most of the details have been tentatively agreed to. The timeline and a few benefits issues are not yet resolved.

The outsourcing likely will result in the elimination of more than 30 local call center employees’ jobs, leaving two full-time employees and five part-time employees.

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Newsroom Contract Ratified

25 Sep

THE NEW CONTRACT covering Denver Post employees in the newsroom was accepted by the membership. The voting margin was 94.7 percent for the new contract and 5.3 percent against.

The new agreement is effective immediately.

Thomas McKay
Kieran Nicholson
Jim Ludvik
Kyle Wagner
Kevin Hamm
Tony Mulligan
Sara Burnett (in memory)

Journal Register Likely to Reduce Print at Some Papers

20 Sep

Rick Edmonds on Poynter: “Journal Register likely to reduce print to three days a week at some papers,” Sept. 20, 2012.

 The new slimmed-down Journal Register company, being pieced together in a bankruptcy proceeding, is likely to reduce print frequency at several of its 20 dailies.

“I would consider and am considering a reduction in print frequency in some markets — (which ones) to be determined,” CEO John Paton wrote me in an e-mail interview earlier this week. “I think it makes sense to think about the frequency of print as print revenues decline and digital revenues increase.”

>snip<

Paton declined to discuss what miscalculations in a bankruptcy plan three years ago, under different management, left the company with too much debt to carry again so soon. He also said it would be wrong to assume the same issues are creating an equal financial problem at MediaNews Group, the much larger chain controlled by Alden and managed by Paton’s Digital First company for just over a year.

>MORE

Newsroom Contract Informational Meeting and Ratification Vote

18 Sep

WE WILL HOLD a meeting Wednesday, Sept. 19, to explain the newsroom’s new proposed contract.
Members of the bargaining committee will be there to explain what’s new or different and answer questions.

We will vote to ratify the contract on the following Tuesday, Sept. 25.

If you cannot make the informational meeting and you have questions, feel free to contact any bargaining committee member.

If you cannot make the ratification vote, contact Tom McKay (303-954-1322 or tmckay@denverpost.com) or Tony at the Guild office ( 303-595-9818 or dng@denvernewspaperguild.org) to arrange for absentee voting.

Informational meeting
Date: Wednesday, Sept. 19
Time: 4 pm
Location: First floor auditorium

Ratification vote
Date: Tuesday, Sept. 25
Time: Noon to 1:30 pm and 4 pm to 5:30 pm
Location: 10th floor lunchroom

Los Links: More on Journal Register’s Bankruptcy

7 Sep

For your reading pleasure, more stories in the wake of Journal Register Company’s bankruptcy announcement.

In Denver Post & MediaNews Group: Fallout from partner Journal Register Company bankruptcy? Westword’s Michael Roberts reports that, according to “an insider,” there was some dissension in the ranks once the bloom was off the Digital First rose:

By summertime, however, our source reported grumbling over what was perceived as top-heaviness at Digital First Media, with new senior executive hires during a time of layoffs at MediaNews Group papers around the country. The fear: MediaNews Group was being used as a cash cow to build up DFM. Our source also noted tension between MediaNews Group types and folks imported by Paton, many of them with Journal Register Company roots.

GigaOM’s Mathew Ingram writes in Newspaper restructuring — think steel, cars and airlines, the newspaper industry’s transformation will need to be measured in decades:

If there is a poster child for the “digital first” newspaper movement, it is probably Journal Register Co., which manages a chain of dailies and weeklies in the eastern U.S. John Paton took the helm as CEO after it emerged from bankruptcy in 2009, and implemented a wide range of digital-first moves — and yet parent company Digital First Media just announced that Journal Register Co. is filing for bankruptcy for a second time. The not-so-hidden message in all this is that despite all the pain of the last few years, the restructuring of newspapers isn’t even close to being over: as we’ve seen with the large structural changes in the steel industry, car makers and the airline market, transforming an industry with massive legacy costs is a long and bloody process. What emerges at the end remains to be seen.

In Journal Register, future-of-news star, is bankrupt again, Ryan Chittum writes for the Columbia Journalism Review that the numbers John Paton mentioned in his announcement are meaningless without some context:

The reason we don’t know more about the numbers is that JRC, as a closely held company, releases financial information only selectively—in sharp contrast to its “open journalism” philosophy.

>snip<

Paton, for instance, has repeatedly said digital revenues at JRC were up some large percentage since he took over. He does so again in his bankruptcy note. Yes, but from what to what? Those are big numbers all right, but 235 percent of not much is still not that much, and its worth noting that JRC’s digital revenues were far below industry average when Paton took over. It’s much easier to grow fast off a low base, and Paton has used the company’s privately held status to cherry pick positive numbers without having to paint a full picture—one that definitely didn’t include an imminent bankruptcy.

A former Journal Register employee wrote a letter about the bankruptcy announcement that is posted on Romenesko:

From RACHEL JACKSON, former Journal Register employee: The [Journal Register] Chapter 11/sale announcement does not surprise me in the least – and the employee you quoted as calling this “horseshit” is exactly right.

Lastly, in the wake of the bankruptcy announcement there has been some grumbling (perhaps it’s contagious) about the fact that Project Thunderdome is located in Manhattan rather than, say, Willoughby, Ohio, where real estate costs are presumably less. Jim Brady explains the reasoning in a piece by Adrienne LaFrance for Nieman Journalism Lab, Why does Project Thunderdome have to be in New York City?

“You want to be in a position to get the best possible people you can,” Brady said. “I’d love to get in an argument with anybody who says there isn’t a lot of journalistic talent in New York City.”

Carry on.

Is Alden Global Capital Souring on Newspapers?

6 Sep

From a piece by Martin Langeveld at Nieman Journalism Lab: Journal Register’s bankruptcy is strategic, all right — but for whom?

In an in-depth analysis of the possible implications of Journal Register Company’s bankruptcy filing, Langeveld writes that while Alden Global Capital’s initial strategy seemed to be one of consolidation, the hedge fund might have changed its mind — it has shed around half of its newspaper holdings in the past year.

Last year in July, I estimated Alden’s total media investments to be about $750 million. Today, after the various sales and counting JRC’s value as zero, those holdings are probably down to about $300 million, and it seems clear that Alden would just as soon get out completely — at least from newspapers.

>MORE

Non-newsroom Contract Ratified

5 Sep

THE NEW GUILD CONTRACT covering Denver Post employees in departments other than the newsroom was accepted by the membership. The new agreement is effective immediately. Circulation wage reductions will take effect on Sunday, September 9, 2012.

Bargaining Committee:

Kathy Rudolph
Sam Johnson
Maureen Shively
Michelle Miller
Tom Peterson
Laurie Faliano
Paulette Shrefler
Tony Mulligan

Journal Register Co. Files for Bankruptcy

5 Sep

UPDATES AT BOTTOM OF POST:

  • John Paton’s letter to employees and FAQ
  • Steve Buttry’s take
  • Running commentary on Romenesko
  • Journal Register Co.’s reboot on Nieman Journalism Lab
  • Story by The Denver Post’s Andy Vuong
  • Analysis of the news on Poynter.org

FROM JOHN PATON’S blog: “Another Tough Step”

Today Digital First Media announced Journal Register Company has filed for Chapter 11 bankruptcy and will seek to implement a prompt sale.

We expect the auction and sale process to take about 90 days, and I am pleased to tell you the Company has a signed stalking horse bid for Journal Register Company from 21st CMH Acquisition Co., an affiliate of funds managed by Alden Global Capital LLC.

So why file Chapter 11?

The Company exited the 2009 restructuring with approximately $225 million in debt and with a legacy cost structure, which includes leases, defined benefit pensions and other liabilities that are now unsustainable and threaten the Company’s efforts for a successful digital transformation.

From 2009 through 2011, digital revenue grew 235% and digital audience more than doubled at Journal Register Company. So far this year, digital revenue is up 32.5%. Expenses by year’s end will be down more than 9.7% compared to 2009.

At the same time, as total expenses were down overall, the Company has invested heavily in digital with digital expenses up 151% since 2009. Journal Register Company has and will continue to invest in the future.

But also from 2009 to 2011 Journal Register Company’s print advertising revenue declined 19% and print advertising represents more than half of the  of the Company’s revenues. Print advertising for the newspaper industry declined approximately 17% over the same time period, according to the Newspaper Association of America. As well, both print circulation and circulation revenue have also declined over the same time period.

Since 2009, printing facilities have been reduced from 14 to 6; 9 of the 50 owned facilities have been sold and 8 distribution centers have been outsourced.

During the same time period, debt was reduced by 28% with the Company currently servicing in excess of $160 million of debt.

All of the digital initiatives and expense efforts are consistent with the Company’s Digital First strategy and while the Journal Register Company cannot afford to halt its investments in its digital future it can now no longer afford the legacy obligations incurred in the past.

Many of those obligations, such as leases, were entered into in the past when revenues, at their peak, were nearly twice as big as they are today and are no longer sustainable.

Revenues in 2005 were about two times bigger than projected 2012 revenues. Defined Benefit Pension underfunding liabilities have grown 52% since 2009.

After a lot of thought, the Board of Directors concluded a Chapter 11 filing was the best course of action.

Journal Register Company’s filing will have no impact on the day-to-day operation of Journal Register Company, Digital First Media or MediaNews Group during the sale process. They will continue to operate their business and roll out new initiatives.

If you have questions just ask – you know how to reach me.

John

John Paton
Chief Executive Officer
Digital First Media

John Paton’s e-mail address is jpaton@digitalfirstmedia.com and he can be found on Twitter at @jxpaton.

FROM AROUND THE WEB

Newsroom Bargaining: Sessions 16 and 17 Result in Tentative Agreement

4 Sep

A TENTATIVE AGREEMENT on all outstanding bargaining issues was reached by Newsroom Guild and management representatives after sessions on August 21 and August 31.

Our next steps will be to craft specific language for this new contract. After that, we will share the proposed contract will all members and hold meetings to answer questions. Then we will vote.

What follows is a brief summary of our tentative agreement. It is not necessarily the language that will be in the contract, but is intended for explanation only.

TERM

  • Sept. 10, 2014 (same as the non-newsroom unit.)

PENSION PLAN

  • The local newsroom pension plan shall be frozen.
  • All benefit service credits for current participant accounts will be considered to be vested.
  • All Guild-covered employees shall receive two times the benefit for this year (2012). This has essentially the same effect as adding one additional year of benefits.
  • There are no changes to our second, much smaller plan, The Newspaper Guild International Pension Plan.

401(k)

  • The company match to the 401(k) will continue to be suspended indefinitely.

PERFORMANCE APPRAISALS

  • A performance-appraisal system will be created and instituted. This will involve giving each employee a preview performance appraisal to explain the system and what is to be expected from employees. Approximately six months later a first full performance appraisal will be done for each employee. After this, employees will have performance appraisals around the anniversary of their date of hire.
  • The Guild and management will work together to create, review and possibly modify the performance-appraisal process.

REDUCTION IN FORCE (SENIORITY)

  • For the period between contract ratification and the time when all employees who were on staff at the time of ratification have had their second full performance appraisal, our current language using seniority within job titles shall be used in the event of a layoff. The only exception will be for reporters and columnists. They will have the additional criteria of department. To better explain this, if we were to go through layoffs currently, and the company decided to cut reporters, they would have to start with the least-senior reporters, regardless of which department — Features, Sports, etc. — they work for. The proposed language would allow the company to specify which department they intend to trim by laying off reporters and columnists. Those reporters and columnists to be laid off would be the least-senior in the specified department.
  • After completion of the second full performance appraisal for all employees (on staff at the time of ratification), layoffs will be conducted using a point system. Points are determined as follows:
    • A maximum of 40 points for seniority. (Two points for each year of service within a job title.)
    • A maximum of 30 points for General Competencies based on an employee’s most recent performance appraisal.
    • A maximum of 30 points for Specific Skills Assessment based on an employee’s most recent performance appraisal.
  • After implementation, if performance appraisals are not completed according to the terms described above (the two bulleted items under PERFORMANCE APPRAISALS), any layoffs would be done using reverse-seniority by job title, except for reporters and columnists who will be considered by department and job title.
  • Employees affected by layoffs may still bump back to previously held guild-covered positions.

YOURHUB

  • Community Manager wage scale goes from $562 per week to $605 per week.
  • Community Journalist wage scale goes from $562 per week to $630 per week.
  • YourHub staff will be allowed to write stories for The Denver Post and will be paid at Denver Post reporter wage rate for such stories.
  • The memorandum of agreement concerning YourHub will be moved into the body of the contract.

NEW OR MODIFIED EQUIPMENT OR PROCESSES

  • The company shall provide The Guild three months’ notice, if possible, and no less than one months’ notice of intent to introduce new or modified equipment, machines, apparatus or processes that will create new job titles or alter the job content of existing job titles. This shortens the time frame for the company to implement changes in equipment or processes.

EQUIPMENT

  • The company will reimburse up to $50 per month for employees required by management to have a cell phone and up to $25 per month for employees required to transmit data from their cell phones.

HEALTH INSURANCE

  • No change from current contract. The premium share for all newsroom employees remains at 30 percent.

BEREAVEMENT LEAVE

  • Currently, employees can only take bereavement leave within seven days of a death. The proposed contract allows employees to take bereavement leave farther out than one week if they notify their supervisor within five business days of the death and work with their supervisor to schedule time off.

WAGES

  • Current wage scales will remain for the term of the contract. The sole exception is YourHub wage scales.

WORKING IN A HIGHER CLASS (HOURS OF WORK AND OVERTIME)

  • No changes to current contract. Employees must work for more than four hours in a higher wage classification (in any one shift of eight hours) to be paid at the higher wage rate for those hours working in the higher class.

FEATURES SECTION EDITORS

  • The job titles of Travel Editor, Fashion Editor, Book Editor and Assistant Features Editor will be replaced with title Section Editor. Section Editors will be paid at Classification 16 scale. The six employees who have been working as Section Editors will be reclassified as such.

UNION SHOP

  • As a condition of employment, all Guild-covered newsroom employees will be required to join The Guild and pay dues.

If you have questions that cannot wait until we hold Q and A sessions, contact any of the bargaining committee members.

Thomas McKay
Sara Burnett
Kieran Nicholson
Jim Ludvik
Kyle Wagner
Kevin Hamm
Tony Mulligan

Reduction In Dues To Be Voted Upon

30 Aug

IN THE AUGUST Denver Newspaper Guild Representative Council meeting, delegates decided to propose a reduction in union dues if contracts with expanded union shop requirements are ratified by the non-newsroom and newsroom bargaining units.

Several years ago, The Newspaper Guild (TNG) added a requirement of a monthly contribution to the national union’s defense fund to be paid by local unions on behalf of each member. Members of The Denver Newspaper Guild voted to increase dues by a small amount to cover that expense. Dues were increased from 1.3846 percent of pay, the minimum dues required in the TNG Constitution, to 1.4423 percent, the current dues rate.

The tentative agreement for the non-newsroom bargaining unit includes a requirement that everyone covered by the agreement except outside sale staff must become members of the union or pay fees equivalent to dues. A full union shop has also been tentatively agreed to for the newsroom bargaining unit. These changes will increase dues income received by the union.

Since the union’s income will increase if the tentative agreements are adopted, the Representative Council believes all members can pay a little bit less. So the Council proposes to reduce dues to the minimum required in the TNG Constitution. The Denver Newspaper Guild Bylaws require a vote at a membership meeting to change the rate of dues. If the contracts are ratified, a dues reduction will be voted upon at the October General Membership meeting.

Below are examples of current dues compared to the proposed reduced dues rate:

Weekly Pay Current Monthly Dues Reduced Monthly Dues
$600.00 $37.50 $36.00
$800.00 $50.00 $48.00
$1,000.00 $62.50 $60.00
$1,200.00 $75.00 $72.00