It's a Deal

Well, it looks like the staff of The Digital Notebook will be around to fill your in-box for another two years with local news and photos.

Seeing as many of the larger organizations in town received the WARN letters issued to employees at The Mercury, which stated that the entire work force could be laid off, we here at The Digital Notebook thought it only proper to let you know what's going on.

WARN letters (WARN stands for Worker Adjustment and Retraining Notification act) are required by the federal government requiring any employer with 100 employees or more to give 60 days notice of the possibility they will be laid off.

They were issued because the company that owns The Mercury (Journal Register Corp.) will emerge from bankruptcy shortly and be sold to a buyer in an asset sale that raised the possibility of all union contracts being negated.

The good news in the above is that The Mercury still has 100 employees and no, not all of them are in the union. But the letter applied to all, union and non-union alike.

So not to worry, this good news...sort of.

On Thursday, the membership of The Mercury's Newspaper Guild unit voted unanimously to approve a new two-year contract with the new owners of the bankrupt Journal-Register chain -- 21st CMH Acquisitions Co.

"I'm pleased our members recognized how important it was to reach a fair two-year contract with 21st CMH, protecting wages, benefits and jobs," said Bill Ross, executive director of The Newspaper Guild's Local-10 office in Philadelphia.

The ever-lovin' Mercury building at High and Hanover.

"We want the new employer to be successful, and to thrive in this economy, so we can share the success with them in the form of long overdue pay raises. Our members pride in what they do, and the important role they serve in our communities, cannot be replaced," Ross said.

Mercury Publisher Ed Condra did not reply to a request for comment.

The terms of the contract allow for only one lay-off in the first year but also provides no raises for the two years of the contract. At the end of this newest contract, it will be five years the union members at The Mercury have gone without a raise.

However, their seniority, pension and severance rights were preserved in the new pact.

The vote followed on the heels of approval of similar contracts at The Times-Herald in Norristown and The Delaware County Daily Times.

Those three, along with The Trentonian in Trenton, N.J. are the only papers in Journal-Register's "Philly Cluster" of papers to be represented by The Newspaper Guild, which is itself part of the much-larger Communication Workers of America union, or CWA.

The contract vote at The Trentonian is scheduled for 5:30 p.m.Monday night.

Other Philadelphia-area newspapers in the chain, such as the West Chester Daily Local News and The Reporter in Lansdale, are not union papers as thus will work at the will of the new owners when they take over.

Current estimates put the final sale of JRC's holdings to the new company sometime in April.

Journal-Register filed for Chapter 11 bankruptcy protection in September, barely two years after emerging from a previous bankruptcy.

The Company exited the 2009 restructuring with approximately $225 million in debt and with a legacy cost structure, which included leases, defined benefit pensions and other liabilities that turned out to be unsustainable.

John Paton

"Many of those obligations, such as leases, were entered into in the past when revenues, at their peak, were nearly twice as big as they are today and are no longer sustainable," CEO John Paton wrote when the second bankruptcy was announced in 2009.

Revenues in 2005 were about two times bigger than projected 2012 revenues.

From 2009 to 2011 Journal Register Company’s print advertising revenue declined 19% and print advertising represents more than half of the of the company’s revenues. Digital revenues are up, but have not yet filled the gap left by declining print ad sales.

21st CMH Acquistions is a spin-off of the current majority owners of JRC, a hedge fund called Alden Global Capital.

The bid by which the new company purchased Journal-Register is called a "stalking horse bid," which is Wall Street's way of echoing the line from The Who anthem "Won't Get Fooled Again" -- "meet the new boss, same as the old boss."

The negotiations with the Guild were swift and somewhat gruff and have not gone well at all properties.

At JRC newspapers in Detroit and Kingston, N.Y., which are also represented by The Newspaper Guild, reaching a contract agreement has proven difficult.

Claiming the company is engaged in a "warpath" of union-busting tactics, the Detroit warned its members it may soon seek a vote to authorize a strike.

Letters sent to union members in Detroit, Kingston (and at the Delaware County Daily Times prior to the contract agreement there), threatened mass lay-offs and individual re-hires with 15 percent pay cuts; employees paying 50 percent of health insurance cost and 50 percent of future premium increases; the elimination of all pension plans; a reduced vacation schedule and reduced severance pay if jobs are eliminated.

These are not healthy times for newspapers.

Consider the announcement just last month that Tribune Company, which owns the mighty Los Angeles Times and the Chicago Tribune, is exploring the sale of all its newspaper properties.

In the past decade, traditional newspapers have continued to lose revenue to digital competitors, this despite the fact that many of those competitors actually deliver as their product, the original journalism undertaken by newspaper reporters.

The on-line Pottstown Patch site is a good example when you consider that more often than not, that site's news is re-written from on-line Mercury stories and includes links back to The Mercury web site.

The employees of The Mercury (and, not-so-coincidentally, The Digital Notebook) continue to believe in the mission of original, local journalism and are exploring every viable platform from which to deliver it.

Whether its on a piece of paper, on your lap-top, your phone or beamed directly into your pre-frontal cortex, what is important and vital to democracy at the local level is the mission -- providing local readers with independent information about their government, and their lives, to help them to be better informed citizens -- at least for the next two years.