The Next Battle in the Newspaper Wars

The specter of a newspaper strike looms in St. Paul --but no matter what happens, the Pioneer Press will never be the same

Labor actions like these are calculated to generate media attention; primarily, though, they are designed to send a signal that the Guild is gathering strength. So far, the coverage has been scant and management has been unmoved. "I don't think [Knight Ridder] thinks there's a snowball's chance in hell that there will be a strike," posits Bill Weyandt, who just took a leave of absence from the paper's technology department to work full time as strike coordinator. "I think they believe we will ultimately take whatever they decide to give us."

A couple of months ago, the company conceded to offering an annual two percent wage increase for three years (the union was hoping for at least four percent), but it has not backed down from its insistence that employees pay higher health care premiums. Most significantly, Guild members are also being asked to abandon a "strike sympathy" clause in the contract that, when push comes to shove, allows workers to refuse to cross picket lines if another union at the Pi-Press strikes. This demand is particularly telling, says Sweeney, because there are three other labor contracts pending at the paper and a fourth coming up at the end of the year. "The only way to look at it is as a union-busting issue," he declares. "What they don't seem to understand is that by pushing their demands on the strike language, they're creating a situation which will cause what they fear most--a strike."

There is a growing sense around the shop in St. Paul that a confrontation is imminent, perhaps before summer's end. Lynda Hanner, who sells advertising at the Pi-Press and has been involved in several contract talks during her 30 years in the local Guild, says she's never seen negotiations this contentious. "I'm a glass-is-half-full sort of person," she says. "And I can usually figure out what they're trying to accomplish and see how we could somehow come to a compromise. I don't see that this time. For the first time ever I think we will have to strike."

Kirk Anderson

Karl Karlson, who has been a staff writer at the paper for 31 years, agrees: "Look, the bottom line is that the company is not negotiating. They're daring us to run to the edge of the abyss. That's a dangerous thing, because when you do that you run the risk of going into a free fall. And if that happens, if we have to strike, the paper may never come out of it."

There is no doubt a strike would be calamitous, especially considering KR's record. Not so long ago the company weathered a brutal newspaper strike in Detroit, the most expensive of its kind in U.S. history. But strike or no, the Pi-Press has been in a free fall for some time now, and Knight Ridder's recent behavior suggests that no matter what transpires between management and the Guild over the next few months, St. Paul's hometown paper will never be the same.

Journalists are whiny people. When talking about themselves or their peers (off the record, of course), they also tend to exaggerate for dramatic effect. Spend a martini's worth of time in a pub with a newspaper reporter, and you're sure to get a glassful about how this editor screwed up this story, that reporter stole that source, and speculation that by the end of the year there will be classified ads on the front page of the paper--above the fold!

A perennial local favorite is the fate of the Pioneer Press. In fact, based on the "inside information" I've had served with my beer nuts over the last decade, that paper should have unplugged the presses--well, at least three times by now.

It's a safe bet, though, that Knight Ridder's small operation in St. Paul, once considered the company's flagship, will be around for a long time. The Pi-Press does not make as much money as CEO Tony Ridder would like, and it is no longer considered a "destination paper" for the chain's more talented journalists. Still, the property consistently runs in the black (in 2002, its profit margin was between 13 and 15 percent) and there has never been a speck of credible evidence that its ownership is considering a mercy killing or fire sale. Neither move makes good business sense.

What does compute, in pure economic terms at least, and what is really driving the journalists in this town to drink, is the way KR is squeezing its 31 papers, from the Pi-Press to the San Jose Mercury News to the once-revered Miami Herald--not because they have to, but because they can. Over the last three years, the company has posted the highest total shareholder return (stock-price gains plus dividends) of all seven companies in the Standard & Poor's Publishing/Newspaper Index. In the fourth quarter of 2002, its net income was up 31 percent from the same period of 2001. As a result, executives at the company received $10 million in stock bonuses. (Ridder himself reportedly received 35,085 shares at a value of $2.4 million.)

Not at all coincidentally, the chain has reduced its head count by nearly 17 percent during the same period. In 2001 alone, according to the San Francisco Chronicle, 2,200 Knight Ridder employees were let go, saving an estimated $100 million. In St. Paul over the last two years, 49 employees have packed their bags (27 in editorial), making the newsroom 10 percent smaller and nearly half the size of the Strib's.

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