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Times intends to enforce deadline

May 1 date for Globe union cuts firm; executives say they hope to avoid closure

Arthur Sulzberger spoke with reporters following The New York Times Co. shareholders meeting yesterday. Arthur Sulzberger spoke with reporters following The New York Times Co. shareholders meeting yesterday. (Jin Lee/Bloomberg News)
By Keith O'Brien and Robert Gavin
Globe Staff / April 24, 2009
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NEW YORK - New York Times Co. chief executive Janet L. Robinson said yesterday that the company intends to enforce the May 1 deadline it has set to receive $20 million in concessions from Boston Globe unions.

"We've talked to them about the May 1 deadline, and I think they know it's the date we need for them to get back to us," Robinson said in an interview with the Globe at the Times Co.'s annual meeting in New York.

Times Co. executives told union leaders at the Globe three weeks ago that the paper would be shut down unless the concessions are agreed to. Yesterday, neither Robinson nor Times Co. chairman Arthur O. Sulzberger Jr. would address or elaborate on the possibility of shutting the paper down.

Both did, however, make it clear that they hope to avoid that dire outcome.

In his prepared speech to the packed 378-seat auditorium at Times Co. headquarters, Sulzberger said that executives "care deeply" about the Globe - a theme that he expanded on in a brief interview with the Globe just before the meeting started.

"I do love the Globe," Sulzberger said. "I actually worked there in your pressroom, when I was a college student, for a couple of months. And I'm proud of what you guys have done - and are doing. I really am. You've got an amazing editor and great colleagues. So none of this has to do with that. OK? It's about finding the model to sustain it. That's what this is about."

Robinson, echoing that theme, said, "We are very proud of everything that has been accomplished and will be accomplished at The Boston Globe. I think it is very clear that we need to get it on strong financial footing, and that is what we are doing."

In Boston yesterday, progress was reported in negotiations with the Globe's largest union, the Boston Newspaper Guild, which represents more than 600 editorial, advertising, and business office workers. The two sides recently reached an agreement to allow the union to review the Globe's finances, since the Times Co. does not publicly report earnings for its individual units.

The Guild "engaged in serious discussions today about labor cost savings with The New York Times Co. and Globe management," union president Daniel Totten said in a statement. "We are hopeful about the pace and progress of these talks."

Globe spokesman Robert Powers said, "We are in substantive negotiations with all our unions, and we want to maintain the confidentiality of all our ongoing discussions."

Today, the union holds a rally to "save the Globe" at Faneuil Hall.

The Times Co.'s annual meeting came just two days after the company released a grim first-quarter earnings report, documenting a net loss of $74.5 million in the first three months of the year. Advertising revenue plummeted 27 percent companywide, the Times Co. reported, mirroring a trend playing out at other newspaper companies. And the New England Media Group, a division that includes the Globe and the Worcester Telegram & Gazette, fared even worse. Ad revenue in New England fell more than 31 percent, the company reported.

But perhaps even more alarming than these numbers is the Times Co. projection that the Globe is on pace to lose $85 million in 2009 - a figure confirmed for the first time yesterday by the Times Co. in a securities filing and also by Globe publisher P. Steven Ainsley, who sat in the front row of the auditorium as Sulzberger and Robinson spoke to shareholders.

The projected $85 million figure includes costs for employee severance as well as depreciation, an accounting charge that reflects the declining value of assets, said Times Co. spokeswoman Catherine Mathis.

Ainsley declined to comment further on the loss, but in two memos e-mailed to employees yesterday, the Globe publisher offered more insight into how badly the Globe is hurting and how he expects the newspaper might overcome those troubles, assuming it avoids a shutdown.

In one of the memos, Ainsley outlined a plan to close the paper's $85 million gap through a combination of cost reductions and new revenues.

The memo was a summary of a plan laid out in more detail at a recent meeting of newspaper managers. At that meeting, Globe managers were told that, in addition to $20 million in union concessions, the Globe plans to save $18 million from the shutdown in June of its Billerica printing plant; $8 million from nonunion managers, including a 5 percent pay cut and the elimination of 2009 bonuses; and about $4 million from various operational efficiencies, according to several managers who requested anonymity because they are not authorized to speak publicly.

The Globe also expects to gain $20 million from consumer price increases for the newspaper, including a soon-to-be-announced increase in home delivery rates; $4 million from a recently formed advertising partnership with Yahoo, the Internet portal; and $4 million in increased digital advertising. New revenues are also anticipated from the forthcoming expansion of Boston.com's Your Town sites, which focus on individual communities, according to the Ainsley memo, and through "launching new digital services and consumer-pay programs that do not eat into advertising revenues."

In a separate communication to employees, Ainsley also said The Boston Globe Foundation, which is a Globe affiliate that donates about $1 million a year to community groups, will immediately suspend all future grants and funding applications. The foundation, whose assets were combined with those of The New York Times Co. Foundation in 2001, will honor its current commitments, including multiyear scholarships given to students and the Globe Santa program.

But "given the current economic and industry conditions," Ainsley wrote, it was no longer possible for the foundation, which is funded by the Times Co., to continue making other donations.

Yesterday the Times Co. also said The New York Times Co. Foundation is suspending grant making and matching gifts from Times and Globe employees, meaning donations made by employees to certain charitable organizations will no longer be matched by the foundation as they once were.

Meanwhile, at the shareholder meeting yesterday, Robinson said company executives understand that the industry is changing and they plan to change with it.

"We will reinvent print and online journalism. We will redefine and refine our business model," Robinson told the crowd. "And we will strive to be the undeniable leader of quality news and information, no matter what the method of distribution."

Robert Weisman of the Globe staff also contributed to this report. Keith O'Brien can be reached at kobrien@globe.com, Robert Gavin at rgavin@globe.com.