The Chopping Block | News | Pittsburgh | Pittsburgh City Paper

The Chopping Block 

If Allan Block were the subject of a Pittsburgh Post-Gazette interview, the P-G's staff writers would love him. His words are frank, forceful -- maybe a little too free. Reporters thrive on people like that.

Unless, of course, those people happen to publish your paper, and what they are talking freely about is your job.

"I think the P-G has a staff that is too big," says Block, whose family has owned the paper since 1926. "Some of it is feather-bedding. In these times, how do you justify that?

"We have people that have been on the staff for decades and are no longer productive," he adds. "Any business, no matter how it's doing ... shouldn't have more people than we need." And the P-G does, he says.

The P-G employs more than 1,000 people in 10 different unions. Of that staff, 260 employees are reporters, copy editors, photographers and staff artists represented by the Newspaper Guild, part of the Communications Workers of America. Block won't get specific about which unions he'd like to reduce. But when he claims that some of his employees "can't write," he clearly isn't complaining about the delivery drivers or those who print the paper.

This February, Block Communications, Inc. began meeting with the Guild, moving toward negotiations with all 10 of its unions, whose contracts expire Dec. 31. The talks are a watershed moment for the paper: They are the first labor negotiations since the death of long-time P-G publisher and patriarch William Block. Today, the Toledo, Ohio-based company is controlled by his nephews, Allan and John Robinson Block.

Before the talks began, many P-G staffers dismissed rumors of layoffs. The paper had experienced about a dozen layoffs in 2002, but most of those were eventually hired back.

Then on Feb. 2, nine non-union P-G employees were let go, including editorial cartoonist Tim Menees and four members of the P-G's Washington, D.C. bureau (most prominently Michael McGough, a frequent contributor). The budget for non-staff reporters, or "stringers," was also chopped by 25 percent. Such cuts may hurt the paper's suburb-focused zone editions, which depend heavily on stringers. The moves came without notice or ceremony, report several staffers who did not wish to speak for attribution.

Since those cuts, says 28-year P-G veteran Peter Leo, who edits the page two Portfolio section, "There is a fairly high level of anxiety. It's difficult when these people leave or are laid off. You lose a lot of experience and expertise. ... How much diminishment you can take, I don't know. I think eventually that has to take its toll."

Leo objects to the idea that there could be "deadwood" on the staff today. "I'm not aware of any great piles of it here," he says. "The numbers are getting thinner. People I know are working harder because there are fewer people. I really don't know how this plays out in the longer sense. I can't see how it works out unless we all work for Google someday."

Founded by John Scull back in 1786, the Post-Gazette is that rarest of publications today: a family-owned daily newspaper. But its problems -- a continued decline in readership and advertising -- are hardly unique in the 21st-century news business.

Last year alone, The New York Times, which also owns the Boston Globe, cut more than 500 jobs company-wide. Already this year, mammoth newspaper chain Knight Ridder is seeking "[j]ob cuts, benefit reductions and reduced newspaper sizes" to save $150 million a year, according to the Wall Street Journal -- and the chain itself is for sale. National circulation continues a "30-year decline" according to the latest State of the News Media report, compiled by the Columbia University Graduate School of Journalism.

Dailies, which depend on auto ads for 30 percent of their classified revenues, have seen them fall by up to a fifth in the last year. Newspapers -- even the famously stodgy Times -- are blogging and trying podcasts to grab back Internet readers and cash.

The P-G is still the region's dominant publication, but it, too, is struggling.

According to Editor & Publisher's 2005 yearbook, the P-G's Sunday circulation is 402,981 and daily 238,860. At the rival Pittsburgh Tribune-Review, by comparison, circulation totals are 168,295 and 108,109 respectively. The Media Audit, a company employed to do readership surveys for many publications, found that 883,500 Pittsburghers read at least one Sunday P-G in the summer of 2000; by fall of 2005 that number had increased slightly, to 897,900. But readership of the daily edition fell during that time, from 732,400 to 676,900. And while the Tribune-Review's numbers for each period were about half as big, its readership has increased: from 348,400 to 417,300 for its Sunday edition and from 325,700 to 372,200 for the daily.

The P-G has at least one thing going for it: As its vice president for advertising, Randall Brant, points out, the Pittsburgh media market is more "traditional" -- read, older. So readers haven't abandoned print for pixels in the large numbers seen elsewhere. But the paper also faces some unusual challenges as well: Pittsburgh is one of a dwindling number of two-newspaper towns, and the advertising market has witnessed some notable recent setbacks.

"Whatever problems we have, it's not the Tribune-Review," Allan Block volunteers. "That's at best an annoyance" -- words that would surely be posted on Trib bulletin boards if the two papers were pro football rivals. "I'm not saying I'm glad it's there. I'm saying if it weren't there at all, we'd still be facing the same problems. It's not the Tribune-Review, it's the Internet. It's the weak economy in the Pittsburgh region. And the evolution of advertisers," such as Kaufmann's, whose parent company recently completed a merger with the owners of Macy's, reducing the number of lucrative full-page bra ads in the P-G's future.

"I can't give specific numbers," says Brant, "but Kaufmann's and Macy's are top advertisers and [the merger] creates a very big challenge to make up some of that business." The withdrawal of $1.2 million in legal advertising by the Allegheny County sheriff's department in favor of the Tribune-Review also hurts.

"Every editor always says, 'Despite these layoffs, we can put together a super newspaper.' I'm going to say that too," offers P-G Executive Editor David Shribman. "I'm hoping, like everybody else in this region, and every newspaper editor ... that revenues perk up nicely. That may be, as Dr. Jonson once said, the victory of hope over experience."

Adds Shribman: "We all hope that there will be many years of Block family ownership. But the paper's not for sale right now. If you're working at a Knight Ridder newspaper, do you have more or less security than if you're working at a Block paper? You have far less."

He says the paper has already "made an adjustment" to the reduction in Kaufmann's ads, although he wouldn't confirm whether that meant less space for articles. "I just think we're being very careful," he says.

The P-G has added new products like the monthly Scene magazine -- dedicated chiefly to lifestyle features and photos of rich people at charity events -- to attract new, high-end advertisers. In January, meanwhile, the paper combined its Sunday arts and travel sections into a single section called "On the Go." Shribman says the new format provides "a little more zing, a little more contemporary" feel to the section. But he acknowledges the change was also due to "changing news-hole resources."

In newspaper jargon, the "news hole" is the amount of space left over when the ads pay for a certain number of pages. Reporters and editors get to fill in that space with content that includes international crises, photos of zoo births, Doonesbury and the umpteenth reiteration of the Steelers' triumph. (Although bloated Steelers coverage probably pays for itself: Company financial reports show Block made more than $600,000 from the sale of Steelers commemorative medallions last season.)

"Every newspaper is doing its best to conserve newsprint," says Shribman. "It's one of the controllable costs."

But people are always the highest cost of doing business. The Pittsburgh daily employs fully a third of Block's 3,000 employees; another third of its workforce is employed by the Toledo Blade, the P-G's sister paper in Ohio. (The company also owns several broadcast TV stations and cable companies in the Midwest and Idaho, and a handful of other businesses in Toledo.)

And P-G employees are handsomely compensated. As of Jan. 1, according to the Newspaper Guild's current contract with the P-G, reporters make a minimum of $47,554 in their first year on staff. By their fifth year, the contract calls for a minimum of $1,184.36 per week, or $61,586.72 per year.

According to the Bureau of Labor Statistics' latest national figures, in 2004 the average reporter in America -- which includes print, radio and television journalists -- makes $39,050 per year.

In August, reporting on its pending labor negotiations, the P-G noted that last spring Block Communications' "cable revenue rose by nearly 6 percent, but revenue from the publishing and broadcasting segments fell by 2.6 percent and 2.8 percent, respectively. Publishing expenses jumped by 3.3 percent, to $18 million, in the quarter, primarily due to increases in health-insurance costs for the Post-Gazette as well as payroll and other costs. At the Blade, costs rose mainly because of increases in pensions and other benefits."

Given this performance, might the Blocks close or sell the paper? The possibility has been raised, though perhaps merely as a saber-rattling tactic prior to contract talks. Block Communications is privately owned, so getting a read on its intentions is difficult. It did, however, file reports with the Securities and Exchange Commission this fall, when it took on more debt through publicly sold notes.

In that filing, the study cites "limitations" imposed by union contracts that don't allow the company to "manage ... costs." The report cautions that "If we are unable to work with the unions that represent our employees to overcome these limitations, our ability to succeed in the newspaper business will be negatively affected to the point that our continued ownership of the newspapers would be illogical."

Elsewhere, the filing concludes: "[W]e will consider other alternatives, including but not limited to the possible divestiture of one or both of these [newspaper] businesses."

To City Paper, Allan Block dismissed the SEC language as a technical necessity. Speaking just before negotiations began, he said he was "gratified" at the "friendly, conciliatory attitude on both sides. I think [the unions] know that there are problems, with recession, with what's happening with old media."

As for a sale: "I hope it doesn't get to that and I don't think it will," Block concluded.

The SEC report, however, threatens no other Block division with "divestiture." And Block himself cautions, "If [the P-G] doesn't make money for us it can do better for someone else.

"In an asset sale, union contracts do not automatically go" to the new buyer, he adds.

"Hopefully, we'll work something out" that prevents the sale of the paper, said P-G reporter Mike Bucsko, president of the Newspaper Guild Local 38061, a few days before negotiations began. "We would like independent newspaper ownership to survive here at the Post-Gazette. We're trying to do our part."

That includes the creation of the Guild's own cost-saving committee, conceived and headed by long-time P-G investigative reporter Bill Moushey, now writing part time while teaching at Point Park University. Moushey says its members have ideas and hope to meet in the coming weeks, although he realizes any savings they propose would be small compared to the P-G's total budget.

Employees have made some concessions already. In 2004, the paper's unions all agreed to help with company shortfalls by foregoing a scheduled $10-a-week raise, allowing prescription co-payments to rise by $10 each, and giving back a week's vacation for employees.

"[Block Communications has] been very fair with the unions and the audit of their books confirmed their financial troubles," a Guild official said in the union's own publication in 2004.

"We've seen things from time to time over the last year" that indicate the reality of the P-G's fiscal state in 2006, says Bucsko -- although he doesn't say what, apart from the P-G's own public pronouncements. The Guild tried last year to examine the P-G's books again but was denied, its Web site says.

Most of the company's other unions wouldn't comment on negotiations. But Joseph Molinero, who is one of the Teamsters leaders representing P-G drivers and pressmen, also holds a national union post that puts him in touch with many other newspapers. "I'm in negotiations all over the country and it's the same story when I go into a major city," he says. "If the paper doesn't get the concessions it needs, it could possibly sell. Our members know what can happen if we don't do our best to ensure the survival of the newspaper."

Management negotiators are being tight-lipped as well.

Steve Spolar, the P-G's labor relations director, would not comment on the current talks, which he said were in the "early stages" and "ongoing."

For his part, Allan Block hadn't yet heard of the Guild's cost-saving committee, and seemed unimpressed. On the other hand, he said, "If they want to suggest laying off some unproductive people ..."

One omen for negotiations might be the talks currently taking place at the Blade, where the company's contract with Guild members expires March 21. Although neither Blade executive editor Ron Royhab nor Guild officials answered requests for comments, the Guild posted its last "Negotiations Update" on its Web site on Feb. 9.

Ongoing talks, it claims, "gave the impression that the Company did not expect to reach agreement by March 21." The Guild is proposing raises of 6, 4 and 4 percent over the next three years, following the paper's three-year wage freeze. The company proposes, according to the Guild: "weekly wage cuts for full-time employees, in every classification, that average 10 percent."

The Guild characterizes the company's counter-offers as "a wish list dressed up as a serious proposal" and claims the company has hired a lawyer from Tennessee firm King and Ballow to make the paper "a unionfree workplace in all but name." (The firm refused even to confirm they are working for Block in Toledo.) Other Block wishes, the Guild says, include the right to require exams "at any time" to test "physical and mental ability to perform," as well as giving only "due consideration" to factors such as seniority when conducting layoffs.

"The short translation" concludes the unsigned "Guild Negotiating Committee," is "[s]ay goodbye to all of your rights, legal protections, and any shred of job security or dignity. The Block family, which has spent eight decades as civic leaders in this community, should be ashamed to have its name attached to this proposal."

So far, Block's employees in Pittsburgh have maintained a wait-and-see attitude. Bucsko himself can only shrug at questions about layoffs and "divestiture." He points out that papers union and non-union, chain and non-chain, have seen layoffs in the past 12 months: the Los Angeles Times, Chicago Tribune, Philadelphia Inquirer, and on and on.

"Whatever's going to happen is going to happen," he says. "They're not going to ask me first."

The relationship between the P-G's news staff and its management had actually been improving in recent years, say Bucsko. Bucsko credits Shribman, who took over as editor three years ago, replacing long-time editor John Craig.

"We had a more strained relationship a few years ago," Bucsko says. "That was just John Craig: It was, 'My way or the highway.'"

Shribman, says Bucsko, "has put his mark on the paper and improved it editorially. He's a decent guy. His heart's in the right place. He's a good newsman." Most recently, he says, Shribman established a regional reporting team for the paper and, a few months ago, an investigative team, "something lacking at the Post-Gazette."

Of course, Shribman "is trying a lot of things with one hand tied behind his back" due to financial constraints.

Both the P-G and the Blade "have been good papers and they've been doing enterprising work," says Rick Edmonds, who writes about the newspaper industry for the Poynter Institute, a Florida journalism school, and helps prepare Columbia University's annual State of the News Media report. He points to the P-G's recent coverage of the deaths in West Virginia's Sago mine, as well as the Blade's revelations about American soldiers' conduct in Vietnam, published a few years back. "It's a real pity when you see some of that disappearing, as you see so many places.

"The great possibility ... is that family ownership and private ownership can take a bit of a longer view. They don't have to get that last percentage point in the [profit] margin. They can wait for better times."

Of course, he adds, "there's a debate in the industry whether better times are coming."

Phil Meyer, the Knight Chair in Journalism at the University of North Carolina and author of The Vanishing Newspaper, says he judges the health of a paper first by its ability to resist a drop in penetration of the paper's home county. "It's one place the paper wants to do well," says Meyer, "because that's where its retail advertisers are."

Numbers from the 2003 Audit Bureau of Circulation report, Meyer says, show the P-G's penetration in Allegheny County down slightly from 2000. Still, that penetration is more than 50 percent, far outpacing the Tribune-Review.

What really determines a paper's financial health, though, is advertising. Ads account for about 80 percent of most papers' revenue, according to the State of the News Media.

Although want ads in Craigslist and have cut great swaths into those revenues, Poynter's Rick Edmonds sees more of a threat to print from online catalogs -- all ads, no editorial content -- and news aggregators like Yahoo! News and Google News. Such sites compile links to print stories worldwide but deliver them to readers without the accompanying advertisements.

Thinner profits and staffs, and the resulting thinner papers, can cause "the newspaper death spiral," says Edmonds, a term he credits to Meyer: A smaller "news hole" means less news coverage, causing circulation to drop. The price papers can charge for ads is tied to circulation -- so shrinking papers make even less money and grow slimmer still.

"It seems to be a self-defeating strategy to make cuts," Edmonds says.

Even prior to the recent cuts, several P-G veterans left of their own accord. Johnna Pro, for example, took a job as Lt. Gov. Catherine Baker Knoll's press secretary; education reporter Carmen Lee joined the Heinz Endowments; business scribe Pamela Gaynor is now with the Jewish Healthcare Foundation; and county government reporter Jeffery Cohan signed up with a local nonprofit a year ago.

Few of those who've left say the paper's financial troubles were a factor -- at least not the main factor. Most said it was simply time for a change.

"I didn't know whether the next 10 years in the newspaper industry was the best place to devote my career," Cohan allows. "The Post-Gazette has been upfront about its problems. The rumors of a sale have been circulating for years and years and its never been sold. I don't put a lot of stock in those rumors."

Labor reporter Jim McKay, now employed by the United Steelworkers of America's communications department, would not comment on leaving the P-G. Tim Menees and Michael McGough, who of course did not leave voluntarily, also had no comment.

"Certainly the layoffs, I can't say they weren't a factor," explains P-G science editor Byron Spice, who is also set to leave for a new job soon. "But my plans were in place long before the layoffs were announced."

Few current staffers would comment on the record about the recent round of layoffs either. "Any time you lose people, it hurts," says columnist Brian O'Neill. "There's no way to spin it to make it a good thing. As for the future of the P-G, I'm not losing a lot of sleep wondering if I'm going to have a job. But I think the paper has to do some serious" adjusting.

"When radio first came out and TV first came out, there were many people forecasting the demise of the newspaper," says P-G historian Clarke Thomas, "but in both cases we will survive. I think we will survive this particular challenge."

Thomas, author of the recent book Front-Page Pittsburgh, left the P-G 15 years ago after three decades there, but still contributes to its editorial page. But even as a retiree, he is being affected by the P-G's future. As of April 1, P-G pensioners' health insurance will be moved from one Highmark product to another, he says, and co-pays added.

"If we can save jobs and save the P-G, it's a small price to pay," Thomas says, apparently still feeling that old team spirit.

Editor David Shribman trusts that such spirit will carry the day. "Management is management and labor is labor, but we're newspaper people," he says. "On our deathbed, we won't think of ourselves as management and labor; we'll think of ourselves as newspaper people."

Whether such thoughts rock the Blocks to sleep at night is, as yet, uncertain.

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