ProJo buyer has contract leverage

By Patrick Anderson
PBN Staff Writer

The pending sale of The Providence Journal to a sprawling national newspaper chain whose past acquisition frenzy drove it into bankruptcy caused many local observers to scratch their heads. More

To continue reading this article, please do one of the following.



UNIONS

ProJo buyer has contract leverage

PBN FILE PHOTO/BRIAN MCDONALD
GATEHOUSE MEDIA, the new owners of the Providence Journal, will decide upon the closing of the sell which employees to take on and which will be let go, and those who stay will be offered new terms of employment as determined by Gatehouse.

By Patrick Anderson
PBN Staff Writer

Posted 8/11/14

The pending sale of The Providence Journal to a sprawling national newspaper chain whose past acquisition frenzy drove it into bankruptcy caused many local observers to scratch their heads.

If current owner A.H. Belo Corp., another national chain, couldn’t stomach declining circulation and revenue at Rhode Island’s largest newspaper, what would make Gatehouse Media Inc. and its parent New Media Investment Group any different?

But even though Gatehouse won’t take over the Journal until the third quarter and has said little about where it intends to take the paper, ways it might be more valuable to its new owner are already emerging.

In an asset-purchase agreement filed with the federal Securities and Exchange Commission, the new owners indicated they do not intend to honor the existing collective-bargaining agreement between the Providence Newspaper Guild and Belo.

When the sale closes, Gatehouse will choose which current Journal employees it wants to take on and will offer them jobs under new terms, not those spelled out in the union contract, according to the asset-purchase agreement.

Up to 40 existing employees that Gatehouse does not want to keep on at the Journal will be let go under Belo’s ownership and severance plan. Gatehouse will still reimburse Belo for the severance costs of those layoffs, but the employees will be protected from receiving a severance under Gatehouse’s terms, which would presumably be less generous.

Gatehouse’s ability to void the CBA points out an inherent financial advantage new buyers have operating a legacy news operation from longtime holders, and is likely one reason papers have changed hands so frequently during this period of industry decline and upheaval.

The Providence Newspaper Guild’s current one-year contract with Belo ends at the end of the year, but if Belo wanted to extract concessions in the next deal, it would have to negotiate them from the starting point of the existing contract. Throwing out the whole deal completely could bring an unfair-labor-practices complaint.

Next Page
Calendar
PBN Hosted
Events

Estate and Corporate Income Taxes are changing next year, and business owners and executives should know the details. The PBN Summit on November 6th will provide those details and more - including how much Obamacare's Employer Mandate could cost.
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
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.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement