Is it time to say kaddish for the New York Times?
Investors in the paper may already be doing so. The last time they received a dividend was in late 2008.
The NYT, considered by many to be the global paper of record, has incurred more than $300 million in net losses since 2005, and its advertising revenues have been declining for five consecutive years.
In fact, the paper’s own financial report made headlines when its third quarter revenues were so much worse than expected that the value of its shares plummeted 22 percent, its biggest one-day drop in at least thirty years. Investors were warned to expect dismal news for the next quarter, as well.
But while the newspaper industry as a whole has been in a funk for years – with Internet news, blogs, and other ’round the clock news sources available—many for free—there are elements of the NYT‘s precarious financial position that make it unique.
The most significant is the stench of hypocrisy hovering over the differences in the way the NYT handles its executives versus its writers.
Remember how the New York Times lionized the anti-capitalist Occupy Wall Street vigilantes? What a shock to learn about the barrels-full of money it has thrown at even departing bigwigs, while keeping its proletariat writers at stagnated pay levels, and, in the words of its own union leaders, trying repeatedly to “decimate their health plan.”
For nearly two years, the daily writers at the New York Times (whose union members are represented by the Newspaper Guild of New York), have been working without a contract. Those approximately 1100 workers have repeatedly been met with what they have described as “draconian” efforts to force not only pay cuts and alterations to their health and pension plans, but also forced, unpaid, increases in their work week.
In fact, less than two weeks ago, on Oct. 8, approximately 400 NYT reporters staged a brief walkout because the sides were so far apart and the writers felt increasingly under siege. In a video interview during that walkout, a member of the union talks about the paper’s hypocrisy. In a July editorial, the Times attacked Wisconsin Governor Scott Walker for his anti-union activity, saying:
“Labor, so long in decline in the private sector, is also losing its clout in states and cities, unable to match or withstand the unfettered bank accounts of industry. The people who kept Mr. Walker and his policies in power are just getting started.”
And yet, the NYT writers have been stonewalled for nearly two years, with management doing its best during that time to wring out still more concessions from them.
At the same time that the Times has been refusing to increase salaries or benefits by even a minimal amount, it has been throwing multiple millions of dollars at its top executives, past and future, this year alone.
Arthur Ochs Sulzberger, Jr. is the great-grandson of the founder and owner of the New York Times Co. He is the Chairman of the board of the NYT and its publisher. Sulzberger appointed Janet Robinson CEO of the paper in 2004. Robinson had spent nearly twenty years rising through the ranks on the business side of the paper, and was long viewed as a quiet complement to her boss.
Although the NYT is publicly traded on the New York Stock Exchange, it is, essentially, a family-owned business, and in addition to rapidly declining corporate financial health, alleged competition from family members in executive positions led to Robinson’s abrupt ouster in December, 2011.
And while the NYT allowed the door to hit her backside on her way out, the bundle of dough they threw after Robinson must have made for a somewhat softer landing. Her severance package amounted to nearly $24 million — more than the company earned in the previous four years.
But that’s not all the paper has given away to bigwigs in the last year. The new CEO, Mark Thompson, is about to slide into place in early November, with his path greased by a total pay package of $10.5 million. That package includes a signing bonus worth as much as $4.5 million.
Thompson’s new annual salary is an increase from what he made at his last position, as the director general of the British Broadcasting Corp. His role in that position was to cut jobs and save money through office and plant consolidation. That reputation isn’t likely to make him a hit with staff writers.
The NYT announced this week, just days before Thompson is set to come on board, that it has reached a tentative agreement with the Newspaper Guild. Nothing, it has been repeatedly stressed, is yet set in stone, let alone laid out on paper, concerning this agreement. Nevertheless, the Guild’s president Bill O’Meara, wrote that “the agreement preserves the workers’ pensions, protects medical benefits and boosts compensation.”
Interesting that an agreement — no matter how tentative — would have been entered into before the new CEO arrives. Given Thompson’s past experience, it is hard to imagine he was hired to do more than continue his practice of slashing costs. The union probably should have gotten the terms in writing before agreeing to allow the issuance of a press release announcing the deal.
So Robinson and Thompson get millions of dollars. Robinson was paid to get out, while Thompson will be paid to make the lowly writers miserable enough to get out.
And this, from an October, 2011 NYT editorial rhapsodizing over the Occupy Wall Street mission:
Income gains at the top would not be as worrisome as they are if the middle class and the poor were also gaining. But working-age households saw their real income decline in the first decade of this century. The recession and its aftermath have only accelerated the decline.
Research shows that such extreme inequality correlates to a host of ills, including lower levels of educational attainment, poorer health and less public investment. It also skews political power, because policy almost invariably reflects the views of upper-income Americans versus those of lower-income Americans.
Tell that to the union. And perhaps the members will say kaddish.