'Longest of Long Shots' Pays Off in Portland

Guild’s Overture to Investor Saves Maine Newspapers, Union Contract and Members’ Jobs

March 1, 2012

 

 

Late last fall, after months of turbulent bargaining and threats of bankruptcy, the Portland Newspaper Guild ratified an 18-month contract.

In a time of financial crisis and digital transition, Guild members felt they’d struck a responsible balance between their needs and the survival of the Portland Press Herald/Maine Sunday Telegram.

Now they could focus on issues of technology and training without major contract drama, at least until 2013.

But just a few weeks later, union leaders found themselves sitting across from a brash young investor claiming he’d save their parent company from bankruptcy — just so long as he could shred their contract.

For too many newspapers, too many businesses, and far too many American workers, that’s where the game ends.

With nothing to lose, the Guild threw a Hail Mary pass.

* * *

The Thursday before Super Bowl Sunday, Guild leaders huddled with the billionaire who’d caught the ball.

Known as a progressive businessman and philanthropist, Donald Sussman has deep roots in Maine. Last year, he married Chellie Pingree, a Democrat representing Maine in the U.S. House.

“It was the longest of long shots,” Local Vice President Greg Kesich said. “We got a message to him that the paper was in trouble, and that we were a forward-looking, progressive union that was determined to save it.”

 

Less than two weeks later, an intrigued Sussman met with Kesich and Guild President Tom Bell. Over the next week, the investor’s lawyers quietly brokered a deal with the company board.

Everything was hush-hush. Bell and Kesich code-named Sussman, “Batman,” trying never to say his name aloud. As journalists, keeping such a secret was counterintuitive but essential. “I was afraid that in the early stages this could get out, the congresswoman would be asked, she’d deny it and we’d be done,” Kesich said.

By Friday, Feb. 10, Sussman and the MaineToday board had struck a deal; a multimillion-dollar loan in exchange for an equity stake and board seat — with no editorial strings attached. Sussman made it clear he had no desire to meddle. (See sidebar page 4.)

Guild leaders called a general meeting for 5 p.m. Many members worried they were about to hear that the company was filing for bankruptcy.

Instead, the room erupted in laughter, cheers and hugs as members learned their jobs were safe, their contract was secure, and that an infusion of cash would mean new technology and new opportunities.

On top of all that, they’d still own part of the company. The Employee Stock Ownership Plan was negotiated when an investment group bought the Guild-represented Portland Press Herald/Maine Sunday Telegram and other local media properties in 2009.

 “Not only will we still have our ownership stake in a reorganized company, we will be working with a much more union-friendly investor group,” said Kesich, who holds one of two Guild seats on the MaineToday Media board. “We expect to have a voice in important strategic decisions in the company’s future.”

* * *

Arguably, the Portland Guild has always had one of the strongest voices in the newspaper’s fight for survival.

“This is a local that has always stayed extremely active, even to the point of getting involved in the business model,” International TNG-CWA President Bernie Lunzer said. “They are in a position to help control the destiny of the paper, and that didn’t just happen by accident.”

Even the company recognizes the Guild as a partner. Chief Financial Officer Pat Sweeney said the union, management and the MaineToday board had a shared focus: “How to navigate a tough economy, strengthen our business and continue to serve Maine communities with exceptional journalism. The broadly supported growth plan we are moving forward with was hammered out by all of us, sitting around a table together and it is a stronger plan as a result,” he said.

In 2008, the Portland newspaper was put up for sale by the Seattle Times’ Blethen family after a decade as highly overleveraged owners.

The Guild asserted its right to maintain its contract in a sale, but leaders also began a big-picture conversation: What would the paper’s future look like, and what role would the union play?

It led them to place an eye-catching advertisement seeking local investors. “Essentially we were saying, ‘We’re part of this community, we care about this community, we care about our readers, and you should care about us and our jobs,’” Kesich said.

The ad helped attract an investor, but the deal would require major concessions from the Guild — a 10 percent wage cut, a three-year wage freeze, loss of the employers’ 401(k) match and a pension freeze

The only upside was the ESOP — 15 percent ownership in a company that was struggling to survive.

“We brought this contract to our members and it was a nearly unanimous vote,” Kesich said. Overwhelmingly, Guild members said they wanted to be part of the solution.

But it was a rough ride. Layoffs and buyouts began immediately, and a new CEO dragged his feet as the Guild tried to get a labor-management committee up and running, as their contract stipulated.

By early 2011, it was clear that the company’s financial picture was as bleak as ever. When contract talks began last spring, CEO Richard Connor opened by “threatening us with bankruptcy and producing an outrageous list of demands for more concessions, some of them financial, some ideological,” Kesich said.

This time, the Guild said, “No.” Meanwhile, amid the poorly managed financial crisis, Connor was ousted.

MaineToday brought in a restructuring firm and made promises about investing in technology and training. Bargaining resumed and the parties hammered out an 18-month contract with none of the rollbacks Connor had demanded and some gains. It wasn’t perfect — no contract is — but Guild members again ratified it by a wide margin, trusting they were doing the best thing for themselves and the paper’s future

* * *

Then Aaron Kushner came to town.  A 38-year-old greeting card and internet entrepreneur, Kushner previously made a bid for the Boston Globe. Now he’d set his sights on Portland.

At first it seemed like good news, a new investor ready to sink cash into the company. But when Kushner finally got around to meeting with the Guild, he had nothing but demands.

“He handed us a list of 50 changes in the contract that were as bad as anything we rejected last spring,” Kesich said. “It was huge things, little things. Overall, it was enormous. We were stunned.”

When they took the list of demands to a membership meeting, “What we heard was, ‘I don’t want to do this again. We’ve made major concessions before. We’ve heard the same promises,’” Kesich said.

They had broader concerns, too. “When negotiations broke down, it wasn’t just because we thought he’d be a difficult employer,” Bell said. “It was because we thought he didn’t have a good business plan or the ability to lead the newspaper through a digital transition.”

His proposals amounted to “the same thing we’d seen fail over the last two ownerships — cutting labor costs, squeezing here and there, and big promises to improve the quality with no kind of logical nexus about how that’s going to happen,” Kesich said.

 Even though Kushner backed down on many of his demands, it was too little, too late. The Guild didn’t trust him. He was one more businessman who saw employees as commodities, someone who thought a winning idea was to outsource work and challenge the Guild to beat the price.

One moment crystalized the gulf that existed between Kushner’s worldview and the Guild’s.

Kusher wanted to get rid of the recall list, the too-long list of workers who’d been laid off but were eligible to be rehired. He made a point of saying he hadn’t made any promises to them.

But Bell had. Across the table from Kushner, the Guild president thought of all the layoff meetings he’d gone to as a union representative, hearing the boss deliver the bad news to yet another employee. “You go through all these meetings and you understand how destructive they are to the workers’ lives and their self esteem,” he said.

To Kushner, he said, “I promised them that if the job opened up again that they’d get their jobs back. It was a promise I made and I’m going to keep that promise.”

You could have heard a pin drop.

* * *

It was an “incredible moment,” and even better when Kesich recounted it at a membership meeting, said Guild Representative Marian Needham.

She and Guild Administrative Director Tim Schick assisted the local during the Kushner talks. Bell and Kesich said the international’s help was invaluable; Needham said the local’s strong foundation, its genuine solidarity, made all the difference.

“Watching the members’ faces as they reacted to what Tom said on their behalf, I thought, ‘This is why they love him so much. This is why they revere all their leadership,’” Needham said.

“These are leaders who understand that their most important relationship is with their members. They value it and they nurture it. They don’t just listen. They listen and it influences what they do.”

 

SIDEBAR:

Sussman: ‘I Will Have Nothing to Do with Editorial Policy’

When a billionaire with political interests and a wife in Congress buys a newspaper does that mean he’ll be deciding which stories get covered and which don’t?

Absolutely not, says Portland Newspaper Guild President Tom Bell.

Investor Donald Sussman has assured the Guild and management at the Portland Press Herald/Maine Sunday Telegram that he’ll be hands-off with regard to news coverage. And reporters and editors intend to hold him to it.

“If that means Congresswoman Pingree has done something that needs to be reported on that makes her look bad, we’re going to write that story,” Bell said in a Feb. 13 interview with Maine Public Broadcasting. “And if Donald Sussman is in a business deal that is going to have a negative reflection on him, we’re going to write that story, because our livelihoods depend on our ability to state the facts as we see them.”

In interviews with journalists from MaineToday Media, the parent company of the Portland papers and also the Guild-represented Morning Sentinel in Waterville, Sussman said he won’t be involved in hiring, daily operations or news coverage.

“I will have nothing to do with editorial policy,” he said.

That hasn’t necessarily quieted critics of the so-called “liberal” media, says Guild Vice President Greg Kesich, given that Sussman donates to progressive causes and is married to a Democratic lawmaker who’s running for re-election.

But in the post-Citizens United era, Kesich says the wealthy can exercise plenty of power without owning a press, as the old adage goes.

“There are much easier ways to influence politics today than by owning a newspaper,” he says.

PHOTOS:

 

TOP: Local President Tom Bell, right, talks with with Teamster Local 22C pressman Charlie Toppi, one of three union members on the MaineToday Media Board of Directors. Credit: Kathy Munroe

CENTER: Portland Guild Vice President Greg Kesich holds one of the local’s two seats on the MaineToday board. Credit: Shawn Ouellette