No Gain = Pain

Chop chop: Publisher Rick Sadowski says jobs must be cut at the Pioneer Press to meet profit targets set by Knight Ridder CEO Tony Ridder (inset)
Geoffrey P. Kroll

The name Ridder still means a lot in St. Paul. Brothers Bernard, Victor, and Joseph Ridder expanded their newspaper company beyond New York with the 1927 purchase of the St. Paul Pioneer Press and the evening St. Paul Dispatch. Over the years no less than five Ridders have served as publisher of the paper, including Bernard, his son Bernard Jr., and the latter's son Peter. And the family was known for more than the newspaper: Bernard H. Ridder Jr., still listed as chairman emeritus of the paper, was among those instrumental in bringing the Minnesota Vikings to the area.

But today another Ridder is on the minds of many in St. Paul: Tony Ridder, son of Bernard Jr., big brother to Peter--and CEO of the San Jose, California-based Knight Ridder empire, the second-largest newspaper company in the nation. At the end of April, Ridder announced a company-wide restructuring, calling for job cuts at "most" of the 32 dailies and 25 non-dailies in the $3.2 billion chain. A few weeks later, local employees at the Pioneer Press learned that roughly ten percent of their work force would be cut.

At a newspaper that has perpetually ranked behind the Minneapolis-based Star Tribune in terms of size, circulation, and sales, news that the battle against the Strib would now be fought with fewer soldiers was received grimly by staffers. Projects reporter Chuck Laszewski, a 20-year Pioneer Press veteran, says that although his colleagues are resilient, staff cuts hurt. He recalls 1987, when the Star Tribune launched its so-called metrowide strategy. "We've been able to stave off the Star Tribune for 14 years, since they announced that they were coming over here," Laszewski says. "My question is: Can we stave off Tony Ridder?"

At the moment, uncertainty hangs in the air for many at the paper's downtown St. Paul headquarters. Publisher Rick Sadowski, who succeeded Peter Ridder in 1997, says he hopes to achieve the mandated staff cuts through buyout offers, early retirement packages, and attrition. Those offers will be tendered in early June, and staffers will have up to two months to weigh them. But if an insufficient number of employees accept the deals, the paper will resort to layoffs to reduce its 1,100-member staff (840 of whom currently work full-time).

Union leaders are skeptical that the company will be able to persuade enough employees to take buyouts. "The feeling among the members--and I share it--is that it will be difficult to come up with enough attractive packages to get the numbers they need," predicts Mike Sweeney, executive officer with the Minnesota Newspaper Guild/Typographical Union. "I expect there's going to be layoffs."

Sweeney worked for the Pioneer Press for 23 years before joining the local guild office full-time in 1995. He was there in 1974 when Ridder Publications Inc. merged with Knight Newspapers Inc., and he recalls that even then there were fears that being a part of a large, publicly traded company would have an adverse effect on the business of newspapering. But as far as anyone can remember, there has never been a slashing of jobs on the scale of what is about to transpire. "There has never been an across-the-board, blanket layoff at the Pioneer Press in my experience," says Sweeney.

Publisher Sadowski says it's too early to deem layoffs inevitable. "We're just working out the details right now," he asserts, adding that he doesn't know precisely how many employees will ultimately be affected. "It's going to be a challenge, but the reality is, we're committed to a quality newspaper."

Before the staff cuts were announced, Sadowski says, the paper took several steps to hold down costs: Expenses were cut, job positions were held open, and the paper's "news hole"--the amount of space set aside for news stories--was tightened. But that wasn't enough, the publisher says, to offset a drop in revenues, including a dip of more than 20 percent in the paper's help-wanted advertising.

Sadowski acknowledges that jobs are being cut in order to keep corporate profit levels up: "What we're trying to do is improve the overall Knight Ridder performance." Commenting on reports that the operating profit margin of the Pioneer Press is in the "high teens," Sadowski says, "That's the right neighborhood." He adds that in the past few years the paper has improved its profitability. But to those who would question Knight Ridder's long-term commitment to St. Paul, Sadowski points to more than $10 million in planned capital investments this year. (This includes the Pioneer Press's scheduled July switch to the so-called 50-inch web, the same narrower-format paper that was adopted by the Star Tribune earlier this year--and a cost-saving measure in itself.)

Knight Ridder is not the only newspaper chain engaged in work-force pruning this year, but the company has drawn more attention than most for the breadth and depth of its cuts. In a recent interview with the Philadelphia Weekly, former Knight Ridder writer Steve Lopez quipped of Tony Ridder, "He was born on third base and thought he hit a triple." But it isn't just journalists who've been critical of the CEO. San Jose Mercury News publisher Jay Harris created a still-simmering stir in the industry when he abruptly resigned in March, publicly refusing to carry out cost-cutting measures to meet profit goals that he believed would do "significant and lasting harm" to the newspaper business.

If layoffs do come to St. Paul, the newspaper guild's contract dictates that employees with the least seniority would be the first to go. After the announcement on the depth of the cuts, 13 Pioneer Press editorial staffers wrote a letter to Sadowski, outlining their fears that the move might gut the newspaper's previous efforts at minority recruitment. "It is clear that many recent hires are people of color," the letter states. "Their loss would make further recruiting efforts even more difficult, would undermine the trust we are building with minority groups in the Twin Cities, and would strip our daily coverage of the unique insights, contacts and hard work of a talented group of people."

Sadowski points out that the company could simply lay people off, without trying to put together any buyout offers. Putting together packages that are attractive enough to avoid layoffs, he argues, will allow the company's commitment to diversity to emerge intact. (Though Sadowski won't comment on the scope of offers at the Pioneer Press, buyout proposals have been announced at other Knight Ridder papers. At the Miami Herald, staffers will get a minimum of one year's salary, and at the San Jose Mercury News, at least six months' worth.)

One way or another, by the end of this year, substantially fewer people will be putting out "Minnesota's First Newspaper," while the staff at the competition across the river will endure no such pruning. Executives with the parent of the Star Tribune, the Sacramento, California-based McClatchy Co., have made it clear that the company will not resort to layoffs even as the economy cools, advertising dollars drop off, and newsprint prices increase. (The Star Tribune has taken other steps toward austerity, including offering employees unpaid time away from work.)

The newspaper guild's Mike Sweeney sees the relentless attention to the bottom line as shortsighted: The corporate journalism that his colleagues feared in 1974 is now a cold, harsh reality. "I think it's damaging the credibility and quality of the newspaper. It's damaging the ability of the newspaper to attract people," says Sweeney.

"The Star Tribune has got to be just clapping their hands with glee," he adds. "When is enough enough?"

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