Star Tribune seeks employee concessions
The publisher of the financially shaky Star Tribune newspaper in Minneapolis says it is seeking another $20 million in givebacks from its union employees.
Publisher Chris Harte indicated the concessions are necessary to keep the privately held newspaper out of bankruptcy, the St. Paul Pioneer Press reported Wednesday.
We very much hope to reach a consensual solution that will allow our company to adjust our labor expenses to affordable market rates and avoid an expensive and difficult court-supervised reorganization, Harte said in a memo to employees Tuesday.
Without the support of our unions, an out-of-court solution is not possible.
Graydon Royce, a Newspaper Guild representative at the Star Tribune, said there were a series of meetings with employees Tuesday but he declined to comment further.
Harte wrote in his memo that the newspaper’s secured lenders are requiring it to get its expenses in line with falling revenues before they will agree to restructuring the debt load, which Harte said in October totaled $432 million.
Harte’s memo said the company was cutting another $10 million in costs on top of $50 million chopped in the past two years, the Pioneer Press said.
Harte warned the financial picture is expected to worsen next year with ad revenue projected to continue falling.
Avista Capital Partners, a New York private-equity firm, bought the Minnesota’s largest newspaper from McClatchy Co. for $530 million in March 2007.