(Originally posted late last night but moved up for our morning readers.)
On Wednesday, worries that the dominant Seattle daily may soon file for Chapter 11 bankruptcy protection crept out into the open when an administrator for the union that represents Times employees mentioned the possibility in an e-mail to union members.
"Within the Guild we have been preparing for a number of worst-case scenarios, including the possibility that the Times might enter the Chapter 11 bankruptcy process," wrote Liz Brown, administrator for the union, the Pacific Northwest Newspaper Guild.
Brown's e-mail came in response to an earlier e-mail from Times managers suggesting that a union employee pension freeze might be sought in upcoming negotiations. Brown's e-mail also noted the "scary times for newspapers and newspaper employees" and predicted that the Times would seek further concessions from the union when those discussions get underway. (The paper has already instituted unpaid furloughs and pension freezes for its non-union managers.)
After Brown's e-mail went out, Alayne Fardella, Senior Vice President for Business Operations at The Seattle Times Company, sent a response to Times managers. Fardella specifically mentioned Brown's e-mail, did not deny that Chapter 11 is a possibility, and said the company is keeping all options open.
Among Times reporters, according to one newsroom source, it's "commonly understood, or presumed" that a bankruptcy filing by the Times is "a very likely next step within the year." However, at a staff meeting on Wednesday, David Boardman, executive editor for the Times, presented bankruptcy as a last-ditch option—and a highly unappealing one to the paper's owners, given that it would allow a court to step in and exert a certain amount of control over the paper's business model. The implication was that significant concessions by the reporters' union could help avoid that difficult scenario.
Without about a month left before the Seattle Post-Intelligencer likely stops printing, and now these growing fears of a Times bankruptcy filing, it seems increasingly plausible that Seattle could go from a two-daily-newspaper town to a no-daily-newspaper town—and perhaps a lot faster than most people think.
Wednesday's e-mail from Liz Brown is in the jump.
To: All Guild-represented employees
From: Liz Brown, Guild administrative officer
I want to answer some questions about the e-mail and information sent to you by The Seattle Times this morning.
First of all, the Guild has not formally agreed to re-open our contract for negotiation, nor have we made any agreements with the Times in regard to a freeze of the pension plan. The Times sent out that message to meet a requirement for legal notice to pension participants, and clearly the company hopes to negotiate changes to the pension. (This does not affect Composing employees represented by the Guild, as they are in a different pension plan.) At this time, we do not have any negotiation meetings scheduled with the company.
However, since the announcement about unpaid furloughs and a pension freeze for managers and unaffiliated employees, I certainly have anticipated that the Times would contact not only the Guild, but representatives of other unions at the company in order to seek contract concessions. Within the Guild we have been preparing for a number of worst-case scenarios, including the possibility that the Times might enter the Chapter 11 bankruptcy process.
At the very least, we can expect the decision by the Hearst Corp. to stop printing the Seattle Post-Intelligencer to have an impact on all employees involved in the production and distribution of the print products.
These are scary times for newspapers and for newspaper employees. The advantage to being represented by a union is that you have an opportunity to shape what happens to you. I ask you for your attention and active participation; in return, I promise you will be informed on what’s happening at every step along the way.
Pacific Northwest Newspaper Guild