Chicago Sun-Times Makes Big Contract Concessions
Move May Save Paper but Questions Remain on Role of Newspaper Unions
Oct 10, 2009
The final acceptance, after initial rejection, of contract demands by the Chicago Newspaper Guild may keep the Chicago Sun-Times afloat for the foreseeable future but perpetuates lasting questions about the function of newspaper unions. Their members could continue to see pay cuts, furloughs, layoffs, or elimination of pensions.
Officials of unions that represent employees of the Sun-Times and other papers under Sun-Times Media Group, Inc., agreed October 7 to large salary and benefit reductions. The contract demands came from financier James Tyree, the head of an investment group of Chicago businessmen who offered $5 million in cash for the assets of the parent company. In addition, the investors would take on some $22 million in liabilities and pump in further investment capital.
Much like the recent call from the New York Times for the Boston Globe’s union to accept $20 million in cuts and elimination of job guarantees for the Globe to remain open, the Sun-Times bid was contingent upon union concessions. Tyree who heads Mesirow Financial, a financial services firm, had vowed to abandon the deal if all unions for Sun-Times Media employees did not agree to the established terms. His group was the sole bidder for the publisher after a deadline for submission of other bids passed.
Despite Objections, Newspaper Unions Face Ultimate Need to Accept Concessions
Examining the paper’s situation in a September 2009 commentary, Alan Mutter, a San Francisco-based media analyst and consultant who was formerly an editor at the Sun-Times and the San Francisco Chronicle, said unions had little choice ultimately but to accede to contract concessions.
Sun-Times union members previously had voted not to accept the provisions, which included a 15% pay cut for at least three years, lowering the severance pay cap from 50 weeks to four, and abolishing seniority rules. But after intensive discussions and deliberations with union and company officials that resulted in some changes, the rank and file approved the revised contract 89-29.
The action preceded a U.S. bankruptcy judge’s approval October 8 of the sale of Sun-Times Media to Tyree’s group. The company filed for Chapter 11 protection in March 2009.
Approved Contract Maintains Salary Reductions and End of Seniority Rules
“The agreement leaves in place Mr. Tyree’s demand for maintaining the 15% cut in compensation and the end of seniority protections from job cuts,” said Ann Saphir in the October 7, 2009 Crain’s Chicago Business in “Sun-Times unions give Tyree deal their OK.” “But employees who are laid off without regard to seniority will get eight weeks’ severance, double the provision under the original terms.”
“The company will void seniority rules, as Tyree had demanded, and it gains the ability to transfer unionized editorial workers between its publications,” Michael Oneal and Julie Johnsson wrote in the October 8, 2009 Chicago Tribune in “Sun-Times Media Group, Jim Tyree on same page.” “But it agreed to give employees 30 days’ notice before moving them to another location. The company also agreed to preserve a ‘just-cause’ clause in the contract, protecting workers against unwarranted dismissals.”
Under the new contract, the company will replace its pension plans with a 401(k) program. The federal Pension Benefit Guaranty Corp., will become responsible, in part, for the company’s unmet pension obligations. Relocated employees, who will now get 30 days’ notice; would have received none under the original proposal. The newspaper guild also maintained its right to file grievances.
Tom Thibeault, executive director of the Chicago Newspaper Guild, which represents editorial workers at the Sun-Times and at several of Sun-Times Media’s 58 suburban papers, told the Associated Press: “The problem we have is it's pretty much take it or leave it. It guts our contract.” At one point national Newspaper Guild President Bernard Lunzer described the Sun-Times demands as the most severe he had seen up to now. “It can get to a point where it is a contract in word only,” he said.
Pay Concessions and Changes in Work Rules Prevalent in Current Newspaper Industry
The bankruptcy of the Sun-Times Media Group, as well as that of the parent company of the city’s rival daily, the Chicago Tribune, is indicative of the stress the newspaper industry and its unions are facing. Concessions on pay and work rules have become increasingly common.
Declining circulation and readership with the prevalence of newspapers online already have resulted in the end of some publications. In Denver, the Rocky Mountain News shut down in February 2009, and the next month the Seattle Post-Intelligencer dropped its print edition and reemerged as an online-only publication with a largely reduced staff.
The growing concern of many union employees at newspapers is that they are being asked to relinquish pay and work guarantees to preserve companies that may be unable to continue their employment beyond a certain point in order to further reduce costs.
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