Star Tribune must cut $30 million to survive
Unfortunately, two factors now make it very clear that 2009 will be even worse than 2008. First, we had hoped that the steep decline in ad revenue would bottom out and that the decline would get smaller late this year. That did not occur. Second, the country is now in the worst financial slump since the Great Depression, and several major groups of advertisers (including auto makers, home builders, real estate agents, retailers and financial institutions) are in their worst condition in decades.
Our message in the meetings today was that the need for real expense reductions has now become more imperative than ever. And prompt union cooperation is essential. We must work together urgently to achieve immediate and substantial reductions in annual expenses and implement necessary changes to our collective bargaining agreements.
Our message to the union leadership is that we must reach agreement quickly on contractual cost savings totaling approximately $20 million, and that we must get these reductions ratified by the unions' rank-and-file members by mid-January. The survival of the company is at stake.Read the whole memo here.
I asked Royce if he accepted Harte's hair-on-fire paradigm, which also includes $10 million in cuts from non-union sources.
"I'm not passing judgment on that, but you look around and see what's happening in the business world, the stock market, lending market," he says. "Those judgments lead to me to say these are perilous economic times, especially in a distressed industry."The $25 million newsroom budget, cut 10 percent this summer, will see some serious cuts by January. The 300-person newsroom will likely see major staff cuts after a pay freeze and increased out-of-pocket medical costs. Where else can they cut?