NEW YORK—The New York Times Co., parent company of the Boston Globe, threatened to shut down the Boston newspaper last week if union leaders don’t agree to more than US$ 20 million in concessions, the Globe reported.
Executives from the company met with union leaders late last week and demanded further cost cuts, including pay deductions and the termination of pension contributions.
“We all know the newspaper industry is going through great transition and loss,” Ralph Giallanella of Teamsters Local 259 told the Globe. “The ad revenues have fallen off the cliff. Just based on everything that's going on around the country, they're serious.”
The economic recession hit the media industry hard, and The New York Times Co. reported a net loss of US$ 58 million. The company, which runs the Globe and its namesake newspaper, as well as numerous other print, online, and radio media ventures, has aggressively reduced staff and recently sold its New York headquarters building to raise capital.
The company is looking for other ways to generate cash, even after obtaining a $250 million loan from Mexican billionaire Carlos Slim. The Times is also reportedly attempting to sell its stake in the Boston Red Sox, a professional baseball team in Boston.
Despite aggressive cost cutting measures, analysts don’t expect the fortunes of media giants to rebound any time soon. Revenues at newspapers had already been declining prior to the economic recession, due to the advent of the Internet and news aggregators such as Google and Yahoo, which scour millions of Web sites for news.
The recession has also dented the pockets of would-be advertisers, delivering yet another blow to traditional print media.
Times executives told union leaders that the Globe would lose more than $85 million this year unless severe concessions are made. The paper lost an estimated $50 million in 2008, the Globe reported.
The recession has already forced several major U.S. metropolitan newspapers to shut down.
The Hearst Corp. stopped printing the Seattle Post-Intelligencer (P-I) on March 17, formerly the largest daily newspaper in Seattle. Hearst failed to find a buyer for the newspaper prior to the decision. The P-I survives as an online news Web site.
In February, E.W. Scripps & Co. ceased publication of the Rocky Mountain News, a Denver-based daily.
Some media companies have filed for bankruptcy protection. Chicago’s two largest media companies, Tribune Co. and Sun-Times Media Group Inc., both filed for Chapter 11. Tribune runs the Los Angeles Times and the Chicago Tribune, while Sun-Times publishes the Chicago Sun-Times, a daily paper with weekday circulation of 312,274.
Online Readers Should Pay Up
Rupert Murdoch, Chairman of News Corp., said last week that online news Web sites should start charging membership fees to cover the costs.
“People reading news for free on the Web, that's got to change,” Murdoch told reporters at The Cable Show, an industry event in Washington, D.C. last week.
The Wall Street Journal, which is owned by News Corp. subsidiary Dow Jones & Co., charges readers to view its online content, which is targeted at business professionals. Murdoch said that rival media the New York Times, which runs a free news site, would never cover its costs with online ads alone.
News Corp. owns several television and film businesses, but also runs dozens of newspapers in the United States, United Kingdom, and Australia. The company’s largest-circulated newspaper is the daily tabloid, the New York Post.
The New York Times recently cancelled an online paid program called “TimesSelect,” which allows paying customers to view editorials from columnists.
Murdoch’s News Corp., with a few other media companies, is investing in a new subscription-based technology to read newspapers wirelessly, similar to the Amazon Kindle and Sony Reader, but with a larger screen to view print newspapers.