After selling off most of its newspapers, Sun-Times Media plans for to fire a bunch of people
You would think that, after selling all of its suburban newspapers to Tribune, Wrapports wouldn't fire anyone for a while. After all, $23.5 million is no small change. Wrapports paid $20 million to buy entire Sun-Times Media. So you would think...
But yesterday, Robert Feder reported that Wrapports was preparing to reduce what remains of Sun-Times Media staff through buyouts and layoffs. And today, Feder gave the details
Between 12 and 15 positions are expected to be eliminated out of a total of 68 employees covered by the newspaper’s contract with the Chicago Newspaper Guild, sources said.[...] Guild members voted unanimously Tuesday to accept the buyout offer negotiated by Sun-Times parent company Wrapports LCC and the union representing reporters, editors, columnists and other newsroom staffers. Reporter Art Golab, who chairs the Sun-Times unit of the Guild, confirmed the vote but declined to discuss details of the offer.
Other sources said all 68 Guild members are eligible for buyouts, which will provide up to 20 weeks of severance pay to the most experienced employees. Starting Wednesday, the offer will remain open for one week. If the company’s goals are not met through buyouts, layoffs will follow. Employees whose job are eliminated through layoffs typically receive eight to 13 weeks of severance pay.
I don't think it's a coincidence that the announcement comes a week after the suburban newspapers completed their transition to the Tribune. I'm going to get into details of that transition in a later post, but lets just say that unlike Wrapport's sale of Joliet Herald-News to Shaw Media, where the paper switched over to the new owner within days, this transition was slower and unfolded over the course of several district stages. One consequence of this that I'm pretty sure is relevant here is that, up until February 1, all ex-STM newspapers still carried Sun Times Media advertising inserts and Sun Times Media classifieds. As I've written before, in newspaper advertising, how many people see your ads matters a great deal. And, as of February 1, the number of people who'd see Sun-Times Media ads dropped by about 72,000. Which, in this day of ever-shrinking circulation, is not as a small drop. It might not hit Sun-Times Media right away, but it would hit sooner or later, and when it did, it will hurt.
Which brings us back to the $23.5 million thing. Since Wrapports bought Sun-Times Media, it was clear that the company as a whole was losing money. There's been an industry-wide understanding that Chicago Reader made profit. When Tribune bought the ex-STM papers, there was a lot of talk about how they were profitable. There were also persistent rumors that Aggrego, the division of Wrapports that develops websites and mobile apps for the company, is bleeding money.
As Wrapports sold off most of its newspapers, it launched the Sun-Times Nework - a network of websites covering major American cities that combined some non-local content created by Chicago Sun-Times reporters and columnists and links to news outlets from the area. It's a bigger version of Wrapports' earlier plan (which never really went anywhere) to create a network of news websites across Chicagoland. At the time, I noted that Sun-Times Network was ill-conceived, because while Sun-Times is a familiar brand across Chicagoland, outside of our region, people know it as that newspaper that fired a bunch of photographers (if they recognize the name at all). But I've since learned that the network was created because, otherwise, one of its major investors wouldn't give it what is reported to be a pretty large amount of money.
So, even though Wrapports got money coming in from the sale and the investors, it still wants to cut 22 percent of its workforce. Which begs the question - just how much money are Chicago Sun-Times and Aggrego (and possibly other parts of Wrapports) losing?
Of course, in Tuesday's piece, Feder says that the layoffs were expected since the sale of ex-STM papers, which suggests that 22 percent layoffs were planned even while Sun-Times was preparing to get a sizable infusion in cash. It's entirely possible that they were simply bracing themselves for what they saw as inevitable revenue losses that the profits from the sale and the new round of investment funding couldn't cushion (which brings us back to the "just how much money is Sun-Times Media losing" question). Or it could be that Wrapports is simply determined to try to squeeze as much cash as possible from Sun-Times Media, and the decrease in ad revenues are just a pretext to cut costs beyond what's necessary. After all, even though is (supposedly) profitable, the last year saw it lose pages and some regular features (cartoons, a crossword puzzle, etc). I've long wondered if the Chicago Reader's profits were used to help prop up the weaker parts of Wrapports.
Actually, speaking of the Reader, here's another thing to consider. As you may remember, a month ago, its staff voted to unionize. When Wrapports fired all of Sun-Times Media photographers, the Chicago Newspaper Guild fought back, forcing the company to settle a lawsuit by hiring back four photographers and paying the rest $2,000 in cash. Which, if nothing else, should've shown Wrapports that picking a fight with the guild can literally cost them. So it is possible that they want to set some money aside, just in case
Or, for all I know, it could be some combination of some (or all) of the above.
One thing for sure... These latest developments make me more concerned about Chicago Sun-Times future than ever. In spite of everything that happened under Wrapports ownership, it's a good newspaper that's home to some great, talented reporters. And it's about to lose quite a few of them. As I've written before, the less staff the newspaper has, the harder it is for remaining reporters to do their jobs. They are going to be juggling more stories. Some stories are going to slip through the cracks because there won't be anyone to cover them. The reporters who are going to be covering more are going to be more stressed, more likely to slip up, make mistakes. The same thing applies to editors. And even though I'm sure the remaining Sun-Times staffers will try to put out the best newspaper they can... There is only so far you can cut before your knife starts hitting the bone.
And that would be a damn shame. As I said in practically every post with the "Sun-Times Media" tag, I believe having two newspapers is good for Chicago. Not just because they (at least in theory) offer different ideological perspectives. More than anything, it's because having competition pushes both sides to try harder, to do more, to get scoops before the other side can. And the public is better off for it.
---