Belo severance policy to cover up to 40 GateHouse cuts to ProJo staff
PBN FILE PHOTO/BRIAN MCDONALD
THE PURCHASE OF the Providence Journal by GateHouse Media could mean as many as 40 Journal employees will lose their jobs upon closure of the deal, according to the asset purchase agreement filed with the SEC.
PROVIDENCE – GateHouse Media will not honor the collective bargaining agreements negotiated between the Providence Journal and A.H. Belo Corp. and may lay off as many as 40 Journal employees upon its purchase of the paper who will be covered by Belo’s severance policy, according to an asset purchase agreement filing with the U.S. Securities and Exchange Commission.
“At the Closing, the Buyer shall not assume the CBAs [collective bargaining agreements],” the agreement stated. “Effective as of the Closing Date, the Buyer shall offer employment to all Business Employees other than the Excluded Employees in its sole discretion on terms and conditions determined by the Buyer.”
In other words, the buyer, GateHouse affiliate and New Media Investment Group subsidiary LMG Rhode Island Holdings Inc., will choose which employees will and will not receive offers of employment from the new owner after the purchase closes in the third quarter of this year. Those who are rehired will be offered terms of employment not necessarily in keeping with the collective bargaining agreements A.H. Belo had negotiated with the Providence Newspaper Guild and Journal employees.
The SEC filing goes on to say that “the Buyer shall advise the Seller of up to forty (40) Business Employees to which the Buyer will not be making offers of employment” and that “no Business Employee shall be guaranteed continued employment with the Buyer.”
Those 40 employees who may be cut from the Journal will receive severance pay not from GateHouse Media but from A.H. Belo, although GateHouse will reimburse the Dallas publisher for the costs of severance packages that are in keeping with Belo’s current severance policy. The language of the agreement suggests GateHouse would have the option to cut additional employees over and above the 40 prescribed in the purchase agreement at its own expense.
A spokesperson for GateHouse Media did not immediately return calls asking for comment on which positions will likely be cut at the 185-year-old daily newspaper or how many people GateHouse expects to lay off.
The elimination of 40 Journal employees would represent roughly 10 percent of the Providence Journal’s full staff of about 385 people.
On Thursday, New Media Investment Group reported a second-quarter net loss of $3.3 million, or 11 cents per share, reducing by 76.9 percent the net loss of $14.1 million, or 24 cents per share, for the same period last year.
Total revenue also improved for the quarter, climbing 32.5 percent to $158 million from $120 million for the same three months in 2013. Excluding acquisitions and divestitures over the year that may have impacted revenue, New Media’s “same-store” revenue dropped five-tenths of a percent year over year.
All three types of revenue – advertising, circulation and commercial printing – increased in the second quarter, led by commercial printing revenue that more than doubled to $16.5 million from $7.3 million last year.
Advertising revenue posted a 21 percent increase to $95.8 million from $79.2 million, while circulation revenue increased 39.5 percent to $46.1 million from $33.1 million.
Join PBN and two panels of successful female executives, business owners and entrepreneurs as we delve into what women should do to advance their careers, and become leaders in the corporate world and their own enterprises.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.