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March 04, 2008

Decision day in the New York Times newsroom

Thomas Lifson
Today is the last day that New York Times newsroom employees have to accept buyouts or face the possibility of lay-offs. The newsroom is to be downsized by about 100. John Koblin of the New York Observer comments:

If there aren't enough buyout offers (and surely there wont' be--word inside is these packages are not that great!) then layoffs are on the way. Also, he mentioned on Valentine's Day that the paper's leadership would share in the pain, which means: Non-guild employees who are up for a management raise will not take that raise.

According to Jeff Bercovici of Conde Nast Portfolio.com, resentment is building  between the business side and newsroom side of the organization:

[the newsroom downsizing] marked the culmination of a period of heightened hostility between the paper's business side, which felt that it had made more than its share of sacrifices in previous round of cost-cutting, and the editorial leadership, which favored doing everything possible to protect the paper's competitiveness.

"It's been an ongoing tension for awhile," says one source close to the business management. "The business side believes they've taken the majority of the hits so far while the newsroom has stayed untouched."

So far, the best-known journalist to accept a buyout is Linda Greenhouse, who is reportedly getting $300,000 to go away quietly. Many conservatives no doubt would have chipped in years ago if they had realized that's all that was required to put an and to the infamous "Greenhouse effect".

Personalities aside, no organization can face continuing cuts without significant friction. Sharing gain is pleasant, but sharing pain is always tough, with feelings of unfairness an inevitable byproduct. In t he case of the Times, there's a good case to be made that the leadership of Pinch Sulzberger has been seriously deficient, though his name is curiously absent from Portfoilo's and the Observer's accounts. Bercovici writes:

But a former executive insists the sense of aggrievement had, in fact, become acute. "There's always a natural tension" between the business side and the newsroom, he says. "This goes well beyond that. It had become more than just a normal debate."

In this source's view, the cuts under way now are as much about mending this rift as they are about improving the bottom line.

"It's symbolism," he says. "It's not like the $5 million or $10 million or whatever the number is is going to get them into significantly better business performance. I don't think the problem with the Times is that the newsroom is inefficient by 2 or 3 percent.

"The real issue is, what is the business side doing to monetize the content? Are they doing all that they can to operate in such a way that the business could be profitable enough to pay for all that great journalism?"

Just so (issues of alleged greatness aside). Pinch Sulzberger has squandered hundreds and hundreds of millions of dollars on bone-headed acquisitions and diversifications, without a positive effect on profitability and return on equity. He got and reatins his job because of family control of the board of directors, thanks to a two-tier shareholding arrangement that keeps the owners of 90% of the equity from ousting him in a shareholder vote.

Meanwhile, the Wall Street Journal, now a part of News Corporation, plans to invest significant sums in expanding its coverage into general interest journalism, going after the Times' national edition subscribers. While I would not expect Rupert Murdoch's new paper to snap up Linda Greenhouse, there may be other marquee-value Times writers who are interested in working in an environment offering the possibility of growth rather than shrinkage of the organization.

Hat tip: Jim Born

Posted at 10:36 AM | Email |

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