Miami Herald owner cuts 1,600 jobs as move to hybrid print and online firm accelerates
NEW YORK - The publisher of the Miami Herald, the McClatchy Company, has revealed it is to cut 1,600 jobs or 15% of its workforce as part of a restructuring plan as the New York Times leases back its building and philanthropy talk resurfaces around the Los Angeles Times.
McClatchy announced on February 5 that given an unprecedented deterioration in revenues and "with no visibility of an improving economy" it planned to reduce costs.
The reduction in staff will come through a mix of redundancies and eliminating vacant positions as well as further consolidation and outsourcing.
McClatchy said it expected to incur an estimated charge of $30m in redundancy costs and the cuts programme would begin by the end of the first quarter.
In February Gary Pruitt, McClatchy's chairman and chief executive officer, declined his 2008 and 2009 bonuses and other executive officers did not receive bonuses for 2008.
Today, the company also announced that Pruitt's base salary will be reduced by 15% while other executive officers' salaries will be cut by 10%.
There will be no bonuses paid to any executive officers for 2009.
Pruitt said that the restructuring would speed up the company's transformation from a traditional newspaper company to a hybrid print and online, news and advertising company.
Pruitt said: "The effects of the current national economic downturn make it essential that we move even faster to realign our workforce and make our operations more efficient.
"We previously discussed a plan to reach a targeted level of cost savings, but given the worsening economy, we must do more. I'm sorry we have to take these actions, but we believe they are necessary."
McClatchy said the headcount reductions will affect virtually every area of the media firm, but that each newspaper will determine how best to implement the savings in its market.
The Miami Herald, one of the US's 25 biggest newspapers, has seen its circulation decline -49.14% since 1990. The Miami Herald sells around 210,000 copies, almost identical to that of the Rocky Mountain News, which was recently closed by EW Scripps.
News of the restructuring at McClatchy came as the New York Times Company said it had raised $225m via a sale and leaseback of its Eighth Avenue headquarters -- one of a number of moves to reduce its debts and protect itself against the newspaper industry slump.
The New York Times Company sold and leased back its building from investment firm WP Carey & Company as part of a 15 year deal, which gives the media firm the option of buying the building back after 10 years for $250m.
Janet Robinson, the president and chief executive of the Times Company, said: "WP Carey was able to clearly understand our company, our facility and our objectives."
The lease back deal follows the $250m loan from Mexican telecoms billionaire Carlos Slim Helu and suspension of its dividend for the first time in four decades.
The company is also looking for a buyer for its minority stake in the Major League Baseball team the Boston Red Sox.
On the West Coast, philanthropist Eli Broad, who last year suggested buying the Tribune-owned Los Angeles Times, has again expressed his interest in saving the paper although he admits its aspirations would be greatly reduced.
According to Reuters, at a gathering in New York last night Broad said he would like to see a foundation buy the Tribune title.
Tribune is currently in Chapter 11 bankruptcy protection after being taken private by real estate magnate Sam Zell and loaded with debt.
Broad said: "We can't afford to lose good newspaper journalism, investigative reporting.
"I've regained my sanity since then [referring to his earlier interest]. I would like to see our foundation and others join together to own the LA Times.
"I am not sure it can be a national paper, or have the same aspirations it once had."
Broad said that one possible idea was to merge it with The Washington Post Company and he pointed to The Guardian in the UK and its ownership by the Scott Trust.
Broad said: "No one has figured out a good business model as of yet. Newspapers ought to be owned by foundations, not look for great financial returns.
If several foundations are involved there is likely to be journalistic freedom."
Blog coverage of the US newspaper crises on Brand Republic
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