By Julie Reynolds
Layoffs and buyouts continue unabated this month as stunned workers, elected officials and local leaders reacted to news that New York hedge fund Alden Global Capital plans to either shut down Digital First Media’s newspapers in the next two to three years or sell the remnants.
DFMworkers.org reported last week that executives at DFM’s hedge fund owner, Alden Global Capital, estimate they can continue to leach profits from the chain’s papers for only 2-3 years before shutting them down or selling what little is left. This sobering observation comes from prominent news business analyst Ken Doctor.
California, which supplies the DFM chain with more than half its total revenue, has been especially hard hit.
“Every journalist lost as a result of cost-cutting is a blow to our community.”
— San Jose Mayor Sam Liccardo
Last week, at least 27 positions were eliminated at the San Jose Mercury News and East Bay Times, including at least 21 NewsGuild-represented employees. Then on Thursday, Feb. 8, the Mercury News laid off one reporter. The East Bay Times laid off a reporter and two part-time copy editors. Sources also reported 17 layoffs in the non-union workforce, though the exact total has not yet been confirmed.
Commenting on the rapid shrinkage of the Mercury News in just a few years, San Jose mayor Sam Liccardo said, “Every journalist lost as a result of cost-cutting is a blow to our community. This institution, the Mercury News, has meant so much to San Jose for as long as anyone can remember.
“As a recovering criminal prosecutor, what I miss most is a referee. In a courtroom, you have a judge telling you the rules. The Mercury News was that referee, ensuring transparency at critical times in our city’s history. Losing that institution by one or a thousand cuts is a great loss to our community.”
With a possible 100 layoffs coming in Southern California, a full third of the newsrooms could be decimated by the end of March.
At conference calls and site meetings last month, DFM’s Southern California News Group management gave editorial staff the bad news. Employees were told that the number of layoffs would be more — likely much more — than the last round in September, which totaled 65. The cuts would start with sports and photography, then move on to designers and news desks. There was no buyout offer, only layoffs.
Management at many DFM papers were left blindsided by this year’s drastic staff cuts, several employees said. Editors who had managed to meet tightly scaled-back budgets were shocked when even more cuts were suddenly ordered in January.
One employee at the non-union Orange County Register said that among DFM’s 11 Southern California newspapers, there were around 315 editorial employees left before this year’s layoffs, so with a possible 100 layoffs coming, a full third of the newsrooms could be decimated by the end of March.
The employee, who asked not be named, said there have been about 27 layoffs across the news group as of Feb. 6, mostly from sports departments. The news group reaches — at least until recently — a combined 3.8 million people, almost the circulation of the New York Times.
“The cut in coverage is devastating,” the Register employee said. “The hits just keep coming.”
In Long Beach, the Press-Telegram laid off its last two sports journalists in a community that includes an NCAA Division I school.
One photographer who survived the cuts posted on Twitter about the impact. “Heart breaks for so many great photogs we lost this week,” Will Lester wrote. “It’s a travesty to the communities we cover so hard. So @JCMaherPhoto and myself are all thats left to cover the biggest county in the country, San Bernardino County, all 20,105 square miles of it.”
Up north, San Jose Mercury News education reporter Sharon Noguchi was one of at least 27 in the San Francisco Bay Area who reluctantly took a buyout. Her departure will likely leave that paper with no one dedicated to covering education in a region with more than 1,000 schools.
“I don’t think I’m irreplaceable,” she said. “But this is about a diminished ability to cover the news.”
What will be lost, she said, are “the mundane but important things, like school boards and wayward school officials. It’s terrible for the community.”
“We’re the last resort for people,” Noguchi said. When desperate parents with complaints about schools have exhausted all other avenues, they’ll call the local paper. “We can make a phone call, even if we don’t necessarily write about it,” she said.
Raymond Mueller heads the Citizens Bond Oversight Committee in San Jose’s Alum Rock Union School District, and is a school parent, volunteer and watchdog over his local school board. He says that without focused education coverage by the Mercury News, “our task will be more difficult.”
“I fear for those taxpayers who will be paying the price of any missteps by the board,” Mueller said. “They may not even realize what’s happening if it’s not covered by our local publication.”
“The biggest casualty I foresee will be the well-informed electorate,” Mueller said. “Many voters rely on the press to help them learn about candidates and incumbents.”
He added that it doesn’t have to be this way. “In the current age of electronic sharing, these local news outlets could find new life, and it is unfortunate this one’s owner has chosen a different path.”
“If the Sentinel and the Herald shut down, the Monterey Bay area will suffer a terrible loss…There is a void whenever our communities lose those sources of accountability.”
— California Assemblyman Mark Stone
Assemblyman Mark Stone represents a district in Northern California where two hometown papers face extinction under the DFM/Alden regime: the Monterey Herald and the Santa Cruz Sentinel.
“If the Sentinel and the Herald shut down, the Monterey Bay area will suffer a terrible loss,” Stone said in an emailed statement. “Local news outlets provide transparency for the government policies and corporate projects that most affect our day-to-day lives, so there is a void whenever our communities lose those sources of accountability.”
As the cuts in the West continue, Digital First Media is quietly testing its latest way to slash costs and extract profits from its papers. The chain has already sold nearly all its papers’ buildings and land, forcing newspapers to lease office space. Now, Alden/DFM apparently wants to stop paying rent.
The Sentinel & Enterprise in Fitchburg, Massachusetts, will close its offices by the end of February, the Boston Business Journal reported. Reporters and other employees will work from coffee shops, home — anywhere. The change is intended to save money, the paper’s editor said.
The company is also using the profits extracted from layoffs and buyouts to purchase yet another newspaper that will no doubt follow the same downward spiral as DFM’s other papers. On Thursday, the company put in a bid for the Boston Herald, which will be put up for bankruptcy auction next week.
Meanwhile, the NewsGuild and employees are pushing for DFM to sell its newspapers to local owners before the losses to communities are unrecoverable.
The employee at the Orange County Register said that Alden’s plans to decimate DFM’s papers were “painful” to read about. But the recent announcement of the sale of the Los Angeles Times to a private owner has offered hope.
“We saw L.A. Times people cheering because they were just sold. That would certainly be the case for us,” the employee said. “Can we all go through two or three more years of this? I hope not.”