- Rebecca Townsend
- Star staff rallied downtown last week to protestconcerns about the direction of the company.
Imagine sitting in a room the size of a football field crammed with a battalion of reporters when word begins to circulate: "The grim reaper is on the move."
Every few minutes a phone rings to inform someone that management has cut his or her job at The Indianapolis Star. Stunned disbelief, tears and even piercing wails follow as colleagues process the losses.
When the Star laid off 62 people across all its departments last June — the fourth round of Star layoffs since 2008 — the event felt like "two hours of hell," said Bobby King, a reporter who witnessed the event.
King still reports for the Star and now serves as president of the Indianapolis Newspaper Guild, the union that represents newsroom employees and the janitorial staff. Last week, he helped organize a rally outside the Star's downtown headquarters.
"We've never done anything remotely similar to what you see here," King said. "The energy reflects the frustration in the newsroom and among the staff about the direction of the paper."
The local newspaper guild represented 219 employees in January 2008. Layoffs and a hiring freeze have since eliminated 44 percent of those people. Today, Guild-represented employees number 125. The paper now has only a dozen photographers, down from 23. The number of copy editors has dropped from 26 to 15 and editorial writers have been halved from eight to four.
On top of the layoffs, Star employees endured unpaid furloughs totaling 4 percent of guild workers' 2009 pay, a 10 percent salary cut in their most recent two-year contract and a proposal to outsource page design and copy editing jobs to a regional Gannett hub in Louisville, Ky.
Then, last week, the staff received a memo from Gannett corporate management in McLean, Va., announcing another round of furloughs. The unpaid time off would not affect guild members, but the sting was strong enough to provoke reaction.
Last week dozens of the paper's employees spent their lunch hour picketing in front of the Star's downtown headquarters. The chants included calls of "Shame on You!" "More news, less greed!" and "Save the Star."
After picketing, the crowd rallied around a handful of speakers.
"I'm proud to be a journalist," said reporter John Russell, who was recognized as Indiana Journalist of the Year by the Society of Professional Journalists for breaking the story of unethical dealings between Duke Energy and the Indiana Utility Regulatory Commission.
"I'm proud to be an officer in your guild. But every week that goes by, I'm a little more ashamed of Gannett and what they're doing to journalism."
Gannett's Chief Executive Craig Dubow's salary totaled $9.4 million last year — twice as much as the combined salaries of the 125 people the guild represents, according to King. When Dubow left the company this fall due to disability, his retirement package was estimated at $37 million.
"Is it fair for the CEO to leave with $37 million while we take less and less and less?" Russell asked. "We're here to say that's wrong."
- Rebecca Townsend
- Indianapolis Newspaper Guild President BobbyKing helped to organize the rally.
The guild, which has a dues-paying membership of about 80 percent of all the employees it represents — including reporters, photographers, copy editors, researchers, page designers and custodial staff — met with Star management following the rally.
"We're concerned about our families' economic situation and we're concerned about the future of the newspaper," King said. "We're not asking for the moon — just the 10 percent back from two years ago and cost-of-living raises of 3 percent a year."
When asked for comment, Star Publisher Karen Crotchfelt offered a brief response via email.
"We are currently engaged in the process of collective bargaining and fully intend to respect and honor that process," Crotchfelt wrote.
"We also are looking forward to reaching a new contract with the Union as soon as possible. However, because we are currently engaged in negotiations it would not be appropriate or proper to discuss in detail our negotiations with the Union."
Guild members worry that the company's consolidation plans may portend additional cuts to the Indianapolis newsroom — a fear Gannett's furlough memo did not allay.
Materials accompanying the memo, reviewed by NUVO, note "as we continue to consolidate some operations to achieve greater efficiencies there will be some position eliminations as our normal course of business."
A recent research report from J.P. Morgan analysts helps to summarize the pressure on Gannett executives to cut newsroom costs, though it does not mention the disparities between executive and newsroom pay.
"Management reiterated during the (third quarter 2011 earnings) call that it will remain vigilant on costs to help protect profitability, but despite a good track record of cost containment ... margins of 16 % fell short of our 16.9 % estimate," the analysts wrote, noting margins were down about 2 percent from the prior year.
"In our view, the newspaper margin miss may indicate that (Gannett) is finding it increasingly challenging to keep cutting expenses in line with revenue declines, and heightens concern over the company's ability to protect profitability in 2012 as there has not yet been any meaningful improvement in the print outlook."
Companies often use reductions in print advertising to justify newsroom cutbacks, though some quantitative research now questions the efficacy of such approaches.
A study authored by professors in the business and journalism schools at the University of Missouri looked at 10 years of financial data for papers of small- to medium-sized newspapers with circulations of 85,000 or less and found that cuts to newsrooms affected news quality.
"If you lower the amount of money spent in the newsroom, then pretty soon the news product becomes so bad that you begin to lose money," said study co-author Esther Thorson, dean of the Missouri School of Journalism, in an announcement of the study's release.
On the flipside, said Murali Mantrala, a professor in the business school, "Better news quality drives circulation, and circulation drives advertising revenues."
In reaction to the cuts sustained at the Star, a group of 15 local religious leaders, including nine reverends, three rabbis, an imam and a bishop wrote a letter of concern to Star executives.
"As leaders in the Indianapolis faith community and readers of your newspaper, we have watched with great concern the declining role of The IndianapolisStar as this city's most vital and primary source of local news," they wrote.
"We are also aware of the challenges facing the newspaper industry, yet we are deeply troubled by the pattern of local layoffs and staff pay reductions while executives at Gannett ... received large pay raises. ... As faith leaders we feel called upon to shine the light of public inquiry on justice issues such as these in our community."