Union officials negotiating new contracts at three Maine daily newspapers — the Portland Press Herald/Maine Sunday Telegram, the Waterville-based Morning Sentinel, and the Augusta-based Kennebec Journal — have begun to assume that the papers will soon be for sale, given the magnitude of the cutbacks sought by management. If the union position were substantially weakened, that would make the papers — which are struggling financially — far more appealing to outside buyers.
The papers are owned by the same family-run company that controls a majority interest in the Seattle Times newspaper in Washington state. And it has been a subject of widespread speculation in newspaper circles that the Times was itself up for sale.
The papers are controlled by the Blethen family, of whom patriarch Frank Blethen is the fourth generation to run the Seattle Times, which was bought in 1896 by his great-grandfather Alden Blethen, who was born in Maine but moved to Seattle as an adult.
One hundred and ten years have taken their toll on the Seattle paper, and the eight years of Blethen ownership of the Maine newspapers have been an additional weight on the finances of the company. Both companies are struggling: in Seattle, the Times is fighting a bitter battle against Hearst, the owner of Seattle’s other daily newspaper, the Post-Intelligencer, hoping to close the P-I. The company has stated that it has lost millions of dollars over the past six years alone.
In Maine, where the Blethens’ 1998 purchase of the Press Herald and the other newspapers from Guy Gannett Publishing was heralded by pledges of increased revenues and decreased costs, costs have increased (despite hiring freezes, layoffs, and the shrinking of the physical size of the newspaper) while revenues have, at best, remained flat, according to company statements.
Because the Blethen interests are privately held, it is difficult to predict or speculate on their business dealings, but changes within the newspaper industry have given the family a new way out of a years-long financial mess. That new way effectively requires the sale of the Blethens’ Maine newspapers, despite the company’s longstanding practice of extolling family ownership over what they call “absentee corporations.”
In September 2003, Frank Blethen (who refused to comment for this story) told Press Herald reporter Edward D. Murphy he had considered selling the Seattle Times to raise badly needed operating cash, but was talked out of it by other family members. He said he was frustrated with suffering continued losses. And though the article summed up Blethen’s position as “ruling out” selling newspapers, it did quote him with a telling statement: “You have to ask yourself the question, ‘Can you just keep going?’” The answer three years later: not much longer.
Seeing the light
The Seattle Times Company is run primarily by the Blethen family, who have 50.5 percent of the voting stock, and by voting as a bloc control the direction of the company, sometimes over the objections of the minority owner. Until just a few months ago, the Knight Ridder media conglomerate held the remaining 49.5 percent of the company's voting stock. Last year, Knight Ridder ran afoul of its shareholders, who forced the company to put itself up for sale in mid-November 2005. The company was bought in mid-March to the McClatchy Company, a California-based newspaper chain whose flagship is the Sacramento Bee. (The $6.5-billion deal received the blessing of federal anti-trust regulators in June, in part because McClatchy sold off some Knight Ridder papers in markets where McClatchy already owned a paper.)
A couple months after Knight Ridder announced it would sell itself off to the highest bidder, Blethen representatives at the Morning Sentinel and the Kennebec Journal introduced new proposals into ongoing contract-renewal talks with those papers’ respective unions. The proposals, which are still being disputed by the unions, would give the Blethens permission to take away tasks from union workers and assign them to contract or freelance workers. But the move that really upset union representatives was a provision that would let the company move those tasks back to full-time workers who would not have to be members of the union.
To union members, that means a person could be laid off, their job taken away and given to a contractor, and the company could later hire the contractor as a full-time staffer who would be outside the union. Over time — some estimate about 10 years; others worry it could be far less — the union would just wither away. It’s a move negotiators have called “union-bashing,” and company representatives have told the unions to expect the same provision to be demanded during next year’s contract-renewal negotiations with the union at the Portland Press Herald/Maine Sunday Telegram. (At all three papers, the unions represent not only reporters and lower-level staff editors, but also workers in layout, printing, advertising, circulation, and distribution.)