Chicago Tribune updates: Unionization and ownership changes
Ten years ago, the idea of Chicago Tribune staff unionizing would have been unthinkable. The paper has always been economically conservative, and it’s been anti-union for as long as unions existed.
But a lot things have changed since then. The company went through a bankruptcy, the newspapers and magazines got spun off and settled with some of the original company’s debt, the Tribune Media kept control of the building and made the papers pay rent on their own freaking buildings, then went on to sell the freaking buildings so now Chicago Tribune is being kicked out of the freaking Tribune Tower…
I digress
In October 2014, Tribune Publishing began the process of acquiring all of Sun-Times Media’s suburban papers. The Pioneer Press weeklies, as well as Lake County News-Sun and Northwest Indiana Post-Tribune, were unionized. Tribune could have easily done what Shaw Media did when it bought Joliet Herald-News and (from what I understand) used the purchase to void the union contracts. I guess the company did it for the sake of goodwill - though they were uneasy about it. According to a certain long-time Pioneer Press reporter, they were very nervous about the union contagion spreading.
Meanwhile, employees of print periodicals and digital media outlets have increasingly been unionizing. Chicago Reader, WBEZ radio, the Onion, Gawker Media and DNAinfo New York are just the examples just at the top of my head. Most recently, Los Angeles Times, a Tribune newspaper with its own long history of anti-union attitudes, unionized by a pretty hefty margin. In all cases, the reasons are the similar - they want to have more of a say in their future and the future of their employer, and, in many cases, they believe that the owners are driving their media outlet off the cliff.
Even before LA Times’ unionization, there have been rumors of unionization. By March, we started getting more solid reports. So the Wednesday, April 11 announcement that Tribune editorial employees were officially starting the unionization process wasn’t exactly surprising… But it still felt pretty momentous.
And the reporters and columnists don’t just want to unionize Chicago Tribune - they want to unionize the four ex-Sun-Times newspapers that weren’t unionized at the time of the sale (Daily Southtown, Aurora Beacon-News, Elgin Courier-News and Naperville Sun) and RedEye and Hoy - the free newspapers that have suffered severe cutbacks and… well, saying anything about the current quality of those two feels like kicking a puppy that’s already been kicked by its owner.
Now, one of the counter-arguments against unionization is that even the relatively large companies like Tribune aren’t exactly swimming in money, so the benefits they would be asking for is unrealistic. But, as the website the union organizers unveiled in the wake of the announcement points out, this company, out of all companies, shouldn’t be lecturing anyone about spending money wisely.
Five million dollar bonuses for failed executives are just the tip of a pretty nasty iceberg. Our company has long suffered under unscrupulous ownership intent on lining their pockets while disregarding and underfunding the newsrooms that are the creative engines of the company. Our union will help hold them to account for behavior that destabilizes our company and threatens our livelihoods.
Bear in mind that, according to a recent SEC disclosure, the company president Tim Knight was being paid a total of $4,288,483 a month in 2017, and Ross Levinhson, the CEO of Tribune Interactive subsidiary, was paid $ 6,932,200 a month during the same period. And before majority owner Michael Ferro resigned from the company’s Board of Directors, he was paid a total of $5,962,500 (which, the best I can tell, doesn’t include the $5 million “consulting fee”)
And here is how the company determined Ferro’s compensation (emphasis mine)
For purposes of this award, the CNCG Committee considered director chair compensation at the following companies: Select Medical Holdings Corporation; The New York Times Company; Westinghouse Air Brake Technologies Corporation; Boyd Gaming Corporation; Rollins, Inc.; Kirby Corporation; Marriott International, Inc.; Kimco Realty Corporation; DSW Inc.; Federal Signal Corporation; EZCorp, Inc.; Caci International Inc.; Aceto Corporation; Twitter, Inc.; Extra Space Storage Inc.; Thor Industries, Inc.; Knight Transportation, Inc.; Stepan Company; Cantel Medical Corp.; Cubic Corporation; Factset Research Systems Inc.; Voxx International Corporation; Monro Muffler Brake, Inc.; Seneca Foods Corporation; The Bon-Ton Stores, Inc.; Central Garden & Pet Company; Consolidated Communications Holdings, Inc.; Zumiez Inc.; Weingarten Realty Investors; and Barnes & Noble, Inc. The CNCG Committee considered information at companies outside of our executive compensation peer group in order to consider compensation at companies with Board chairs who performed work on behalf of their companies significantly beyond customary board chair
New York Times? THE biggest newspaper in North America, and arguably one of the biggest in the world? Seriously?
Plus, there is this little gem:
The Company purchased from [Ferro’s Company] Merrick Ventures tickets to certain Chicago Bulls, Chicago Blackhawks and Chicago Bears games at cost. The total amount paid or payable to Merrick Ventures for 2017 tickets is approximately $115,000. After 2017, the Company ceased paying Merrick Ventures for these tickets.
And there is… at the risk of beating the dead horse, a long record of ideas that didn’t so much fail as peter out (or never even got off the ground in the first place) without any profit to show for it.
The day after the unionization drive was announced, Robert Feder noted that, after L.A Times staff unionized, Ferro sold it Dr. Patrick Soon-Shiong (a Los Angeles billionaire and a former Tribune investor who’s been trying to buy the paper for a while). He expected the current Tribune leadership to sell the company:
As was the case in L.A., a resounding union victory here could be the final impetus for tronc chairman-in-exile Michael Ferro and CEO Justin Dearborn to call it quits and cash out. I’m willing to bet that’s just what they’ll do.
At the time, I remembered thinking - Feder is right far more often then he’s wrong. And, sure enough, a few hours later, New York Post reported that Apollo Global Management private equity firm was interested in buying it. And that the sale of LA Times and other California Media Group newspapers wasn’t as much of a sure thing as people expected. The doctor is allegedly looking to reduce the price, and Tronc was kind of counting on that money.
I was wondering where this was going to go… But i admit that I didn’t expect what happened next. As you may recall, when Ferro left Tribune’s Board of Directors, he still retained his majority ownership stake. Well, on Friday afternoon, word got around that he sold all of his shares to McCormick Media, which, per Feder, is “new ownership group reportedly tied to the family of the late Colonel Robert McCormick, longtime publisher of the Chicago Tribune.”
Which can mean just about anything. Like, there are way too many unknowns to even begin to speculate
Still, it’s interesting that, aside from the consulting gig, Ferro gave up the control of Chicago Tribune, the paper he wanted to own ever since he became a Sun-Times Media investor. But then, accusations of sexual harassment and sexual assault isn’t something one can just ignore, and, Ferro always had a talent for failing his way upwards.
So Ferro bought his first 5.2 mil shares of TribCo at $8.25 a piece. The next 3.8 mil for $10-15 each. And is now selling all his shares at $23 a share. My rough math says he'll come away with more than $100 mil in profits--or more than 100% ROI--in just over 2 years.
- Jonah Shai Newman (@jonahshai) April 13, 2018
So…. It’s been an interesting couple of days.
On one had, part of me questions whether, even if the unionization succeeds, it would matter all that much. When Chicago Reader was unionized, the then-Ferro controlled Wrapports resisted as much as it legally could. And, going by accounts from several sources I trust, Tribune’s unionized employees haven’t been treated much better.
On the other hand, I still believe that, if you must go down, you might as well go down fighting. And, during the Bugle Non-Payment sagas, I wished more than once that the freelancer union Chicago News Guild was trying to set up actually got off the ground, because I felt utterly helpless and without any leverage save for screaming on social media.
And besides, this photo, which appeared on multiple Tribune reporters’ accounts, is downright inspiring.
Whatever happens next -best of luck, Tribune reporters. For all of our sakes.
Unions forever