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Massachusetts Liberal

Observations on politics, the media and life in Massachusetts and beyond from the left side of the road.

Tuesday, June 09, 2009

Did the Times cook the books?

I'm reminded of the childhood gag about whether you would like to be executed by a hot stake or a cold chop. That essentially was the choice offered to the Boston Newspaper Guild. The narrow vote to reject a $10 million concession initially appears to be a third option -- a poison pill.

In a late-breaking development, it appears we have some confirmation that the New York Times Co. was dealing from the bottom of the deck. Whether that admission comes too late to make a difference is the ultimate question.

I'm rather fascinated that Catherine Mathis' admission that the Times really isn't on track to lose $85 million at the Globe became public only after the polls closed on the 277-265 vote to reject the "last, best offer" and the company decision to impose a unilateral 23 percent wage cut.
The New York Times Co.'s first quarter financials show a company-wide depreciation and amortization charge of $35.2 million. The Globe is roughly one-sixth of the company, so figure it for roughly $6 million D&A for the quarter, or $24 million for the year. Keep in mind these are losses only on paper, not cash going out the door. The first quarter report also includes a special charge of $25.2 million for severance, mostly in the New England group (the Globe and its sister Telegram & Gazette in Worcester, Mass.). The company will pay that money out, not necessarily all in 2009, and thus will realize substantial payroll savings going forward. It seems odd, to say the least, to count that severance as a loss in the context of negotiating pay cuts and layoffs.
As the Guild looks to the courts to reject the Times' claim that they are at impasse, allowing for the wage cut, the inevitable question becomes "did the Times cook the books?"

Without having been at the table, it's impossible for me to know whether the company gave the Guild an honest accounting of its own financial situation. Given the fact there was a $4 million"oopsie" when the company apparently failed to account for the savings from those very same cuts and layoffs you really have to wonder about whether the Times has bargained in good faith.

The only thing clear today is 135 Morrissey Boulevard will be an even less enjoyable place to work. There will be questions about what would have happened if a mere seven votes had changed. There will be nasty looks from craft union members who agreed to cuts only to see labor peace blown up by their white collar colleagues.

And there will also be questions about why 140 Guild members didn't have the time or interest to cast a vote.

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