Tag Archives: Alden Global Capital

New Journal Register Co. Owner Aims to Carve Up Contracts

28 Mar

wikimedia.orgBALKING AT CONTRACT terms they call outrageous, some 175 Journal Register Company employees in Michigan voted to lead a boycott of the papers [Detroit Free Press].

Since early March, the Detroit Newspaper Guild has been in negotiations with 21st CMH Acquisition Co., the Alden Global Capital unit that received approval last week to buy Journal Register Co.’s assets out of bankruptcy.

Poynter printed a Guild bulletin outlining the company’s demands, which include a 15 percent pay cut and more than doubling employees’ health insurance premiums, according to the Detroit Free Press.

From the Detroit Free Press story:

Louis Mleczko, president of the Newspaper Guild of Detroit, which represents employees at the Macomb Daily and the Daily Tribune, said the employment terms are outrageous. He said Macomb Daily employees took a pension freeze and a 12.5% pay cut four years ago and have gotten just 2.5% back.

“They took tremendous sacrifice to help keep this entity afloat, but now (the company) decided to take on the unions and get rid of them and gut their contracts,” Mleczko said.

The contracts expires March 31. Workers have authorized a possible strike or other labor action once the contracts end.

Advertisements

Journal Register Company’s Bankruptcy Sale Approved

21 Mar

A NEW YORK bankruptcy judge has approved the sale of the Journal Register Company’s assets to Alden Global Capital’s stalking-horse bidder, 21st CMH Acquisition Corp. The ruling came down March 21.

The same judge had delayed a ruling March 19 to further review an objection to the sale made by a division of the Communication Workers of America.

“No one is giving them (the buyer) a free pass in the future,” the judge was quoted as saying in a Bloomberg story.

In the March 21 ruling, the judge ruled that since the transaction won’t close until after the union’s contract expires March 31, the sale could proceed.

Journal Register Co. employs some 1,800 full-time and 500 part-time workers spread across 10 states, including Nick Henderson, a copy editor at the Daily Freeman in Kingston, N.Y.

Unions: Journal Register Co. Has “Declared War”

4 Mar

IN A MARCH 1 story on Poynter.org, Mich. unions say JRC has “declared war,” threaten strike, Andrew Beaujon writes the Metropolitan Council of Newspaper Unions is warning its members of union-busting tactics being employed by Journal Register Company and the Alden Global Capital subsidiary, 21st CMH Acquisition Co., that plans to “purchase” the company in bankruptcy proceedings.

According to the union’s bulletin:

JRC and 21st CMH declared war in FOUR ways:

1. On February 22, JRC gave notice to all the unions at the Macomb Daily and Daily Tribune that it was terminating all collective bargaining agreements. The termination of contracts would be effective March 31. JRC is doing this because it claims it will no longer be the employer when 21st CMH becomes the owner of the newspapers on April 17.

2. JRC has refused to live up the successor clauses in the collective bargaining agreements. It has refused to require its purchaser, 21st CMH, to accept the current union agreements.

3. In Philadelphia and New York, 21st CMH proposed union-busting contracts. It proposed contracts that eliminate all protections regarding work jurisdiction, subcontracting and outsourcing. Those proposed contracts give 21st CMH management the right to change terms and conditions of employment at any time – insurance, work schedules, compensation, etc.

4. When the Philadelphia and New York unions would not to agree to the union-busting contracts, 21st CMH sent letters to JRC employees telling them they could apply for their own jobs when 21st CMH becomes the employer. 21st CMH would selectively hire some employees. The new terms of employment by 21st CMH, according to the letters, include:

  • 15% pay cut.
  • employees pay 50% of health insurance cost and 50% of future premium increases.
  • elimination of all pension plans.
  • reduced vacation schedule.
  • reduced severance pay if jobs are eliminated

An employee at one of the Michigan papers commented on the Denver Newspaper Guild site that some workers aren’t waiting around to see how this all plays out:

As an employee in the Michigan Cluster it is very unfair to us to be on pins and needles and when questions are asked we get answers read from a script. They need to tell us if we are going to have jobs, be considered for jobs, something so we know. Most are being very proactive in searching for another job right now.

In a related story, three Philadelphia units of the Newspaper Guild voted to accept a “final offer” from 21st CMH.

“Our members voted this up resoundingly, but they also were told take it or leave it,” [Newspaper] Guild President Bernie Lunzer said. “This new ownership which is really the old owners reconstituted – sent letters warning all workers that they would be fired when the sale is complete and would have to reapply for their jobs, and would have their pay cut.”

Things with the Journal Register Co. bankruptcy are starting to move fast, so stay tuned.

Journal Register Company’s Bankruptcy Sale Hits a Snag

25 Feb

IT APPEARS THE Journal Register Company bankruptcy plan hit a snag last week at the 11th hour. Law360 reported that newspaper unions involved in the process, as well as the Communications Workers of America, have objected to the sale of Journal Register Co. to the stalking horse bidder that is a subsidiary of Alden Global Capital, 21st CMH Acquisition. A hearing on the sale had been scheduled for Feb. 21.

In a story on the Newspaper Guild’s website, Guild president Bernie Lunzer said Journal Register Co. isn’t respecting the process, or its workers.

“While we know we won’t walk away with the status quo, we make it clear that our members, their workers, will be treated with dignity and respect,” he said. “The Journal Register Co. is showing no such respect, not for its workers and not for the bankruptcy process itself, which certainly was never intended to be a get-out-of-jail-free card for businesses facing some financial trouble every couple of years.”

Pursuant to the bankruptcy process, Journal Register Co. mailed notices to employees and agencies in the 10 states where the company operates papers that layoffs could result from the bankruptcy, including 844 workers in Michigan285 in Connecticut230 in New York and 217 in Ohio.

From a story in Crain’s Cleveland Business, “Journal Register Co. puts its employees on needles and pins”:

The process that JRC is going through “is quite common in bankruptcy proceedings,” John Collard, chairman of Strategic Management Partners, an Annapolis, Md.-based business turnaround firm, tells The New Haven Register.

“When somebody buys a company out of bankruptcy, they are buying a specific list of assets, usually not 100 percent of what the existing business has,” Mr. Collard tells the newspaper. “While they can purchase assets, it’s not possible to purchase employees. So the acquiring company comes to employees and offers them the same terms they had with the old company or different terms.”

He says it’s likely that 21st CMH Acquisition Co. will not retain all of the Journal Register employees.

And from a story in The Saratogian:

“The notices sent to all Journal Register Company employees – from part-time staffers to managers to the executive team – are the next step in the Company’s ongoing sale process. Journal Register Company’s leadership team cannot speak on behalf of the new owner but has continually expressed to the purchaser that a competent and competitive workforce is critical to the company’s success moving forward,” Jonathan Cooper, vice president for media relations and employee communication at Digital First Media, said. Digital First Media currently operates Journal Register Company and other media companies.

April 17 is the target date for the sale to be completed.

More tidbits:

Alden Global Capital is a large stakeholder in another high-profile media bankruptcy:
Reader’s Digest parent company files for bankruptcy again | Reuters, Feb. 18, 2013

And for Journal Register Co., it’s deja vu all over again:
Journal Register Faces Bankrutpcy Plan Objections | New York Times, June 26, 2009

For more information on Alden Global Capital, click on the tag below this story.

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

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

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

Los Links: Break The Chains, But Don’t Wait Too Long

8 Jul

Want to save local newspapers? Then break the chains that hold them back
In this piece for OJR: The Online Journalism Review, Robert Niles writes that economies of scale don’t work in the newspaper business anymore and it’s time to break up the chains.

Locally-focused news publications must become truly local, with local information, produced by local reporters with local ties, sold to local advertisers by a local sales staff who work for a local owner.

News Corp Split, Buffett’s Bet Top Year of Big Media Ownership Changes
The Pew Research Center’s Project for Excellence in Journalism has a nice wrap-up of media transactions over the last couple of years.

According to the investment banking firm of Dirks, Van Essen & Murray, which monitors newspaper transactions, a total of 71 daily newspapers were sold as part of 11 different transactions during 2011, the busiest year for sales since 2007.

There’s a mention of Alden Global Capital’s acquisition of the Journal Register Company, and “Alden Global has also invested in several other newspaper organizations,” including MediaNews Group (two of the seven MediaNews Group directors are from Alden Global Capital).

And be sure to check out the list of Who Owns the News Media that covers newspapers, TV and radio.

The Fissures Are Growing for Papers
The New York Times’ David Carr writes about “cracks in publishing operations,” one of the bigger ones being underfunded pensions that threaten companies’ financial health. “There are smart people trying to innovate, and tons of great journalism is published daily, but the financial distress is more visible by the week.”

Those of us who work inside the racket like to think of our business as unique, but with underfunded pension plans, unserviceable debt and legacy manufacturing processes and union agreements, the newspaper industry looks a lot like, well, steel, autos and textiles.

Report: How to Build Trust In the Digital Age
Mediabistro’s 10,000 Words column has a piece by Mona Zhang about a report that examines the quality of journalism in the digital age, which “investigates the notions of objectivity and impartiality in the digital world, and whether or not we can trust the new forms of journalism that are emerging as a result of new technologies.”

He (Richard Sambrook) writes that as the traditional business models erode, there has been an increase in “journalism of assertion” and “journalism of affirmation”—models that rely on immediacy and volume, and affirming the beliefs of its audience.

Newspapers Chronicle Lives of Returning Veterans
Nu Yang wrote a piece for Editor & Publisher about the American Homecomings project by The Denver Post and Digital First Media.

The site is really a public service project,” (Lee Ann) Colacioppo said. “We’re doing it for the veterans who are returning and to serve that community … the feedback we’ve received so far is from readers thanking us for sharing these stories and veterans who appreciate the attention to the subject.

And a link to the American Homecomings project since there doesn’t seem to be one in the story.

Lastly, here’s a fun little infographic about the consolidation of media in America.

Hedger Pausing On Print

30 Jan

From the New York Post, Jan. 30, 2012:

Reclusive Randy Smith’s Alden Global has been building a national newspaper empire, but after suffering some losses he may be looking to recycle that idea.

Smith last fall bought a roughly 30 percent share of the Philadelphia Inquirer and the Philadelphia Daily News and the expectation was he would build on that stake.

But the owners of the Philadelphia Media Network are now in the middle of an auction to sell it for roughly $100 million, and Smith so far is on the sellers’ side of the table, showing no indication he or Alden will be a buyer, a source close to the situation said.

>snip<

Smith is also the largest shareholder in Gannett and controls MediaNews, owner of the Denver Post and San Jose Mercury News.

>MORE