Road clear for sale as Boston Globe staff agree cuts

by Staff, Brand Republic 21-Jul-09, 09:05

NEW YORK - Staff at the Boston Globe's biggest union agreed to $10m of cuts clearing the way for the sale of the paper and possible job cuts in an effort to reduce losses.

Vote by the Boston Newspaper Guild came after months of talks and a month after a similar package proposed by owner the New York Times Company was rejected.

The Newspaper Guild's 700 editorial and advertising staff voted 366 to 179 to approve the deal.

Staff now face pay cuts and unpaid leave equating to an almost 10% cut in earnings, reductions in benefits including health and pensions, and the elimination of lifetime job guarantees for about 170 veteran staff.

The vote by the Guild follows six other unions agreeing cuts amounting to another $10m to deliver total costs cuts of $20m at the paper, which is projected to lose $85m this year.

Earlier this year the New York Times Company threatened to close the paper. The union then voted and rejected the earlier package leading the company to impose a 23% pay cut on Guild members.

Three bidders interested in buying the paper were waiting for the Newspaper Guild to accept the deal before proceeding after the New York Times Company has extended the bid deadline.

Buyers for the Boston Globe include private equity executive and Celtics co-owner, Stephen Pagliuca, and Hill Holliday co-founder, Jack Connors, who have joined forces.

However, with such high loses projected it is not thought that a sale will take place without serious cost cutting.

Many staff at the paper including those who previously had job guarantees could be laid off.

In a statement the Boston Globe said: "We deeply appreciate the sacrifices that guild members are making."

Newspaper Guild president Daniel Totten, said: "It has been a long and difficult period for everyone, and we hope we can now work with prospective buyers to help The Boston Globe and Boston.com to carry on with its vital mission to promote good journalism and protect free speech.'"

Last week the New York Times Company agreed to sell its WQXR classical music radio station in New York in deal valued at $45m and is also looking to sell its stake it the Boston Red Sox baseball team.