Reading Between the Lines: Union Bid for Papers Is a Good Deal

by Gordon Pavy, Mar 24, 2006

McClatchy Co. announced a bid to buy 32 Knight Ridder daily newspapers March 13, saying it would spin off 12 of the papers in an immediate resale. Prior to the McClatchy deal, The Newspaper Guild (TNG) division of the Communications Workers of America (CWA) announced a partnership with Yucaipa Cos. to bid for nine of the Knight Ridder papers. At first, the company said it would only accept bids for the entire chain but now supports the Guild’s bid for all 12 papers.

According to the MediaChannel:

Included in the 12 newspapers to be sold are eight represented by TNG-CWA: the St. Paul Pioneer Press, Duluth News Tribune, Grand Forks Herald, The Philadelphia Inquirer, Philadelphia Daily News, San Jose Mercury News, Akron Beacon Journal, and The Monterey County Herald. These have a combined employment of approximately 7,000 and a combined daily circulation of 1.3 million.

As an employee of the AFL-CIO, I am a member of TNG-CWA Local 35. TNG-CWA President Linda Foley and I worked together on the Newspaper Industry Coordinating Committee years ago when she was the research director for the Guild. She knows the business—and when she puts her support behind the Yucaipa purchase of the dozen newspapers McClatchy is spinning off after purchasing the Knight Ridder chain, I trust her judgment. Yucaipa’s founder and managing partner, Ron Burkle, has a history of worker friendly deals. He’s on the board at Yahoo! Inc. and is positioned to help the workers bring the papers into the Internet age.

But it won’t end with Yucaipa ownership. The plan is for the employees of these dozen papers to take ownership of the papers themselves through a voluntary employee stock ownership plan (ESOP) after the Yucaipa purchase. Workers at the papers will have a chance to invest more than their time in the companies, they will be able to invest their 401(k) money, too. The Guild estimates that 25 percent of current 401(k) money from employees could be enough. Yucaipa and employees of the papers would run the company in a balanced relationship based on the level of investment from each group.

With so many papers looking alike these days and local news reporting a lost art, this is a chance for my fellow Guild members to show what local ownership can do for a newspaper. I’m sure a lot of them have questions. They can find answers on the TNG-CWA website.

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