May 3–10, 2001

on media

More Unkind Cuts?

by Daryl Gale

In a press release dated April 27 Knight Ridder announced the "restructuring" of its work force in response to recent drops in advertising revenue. Knight Ridder, which publishes 32 daily newspapers in 28 markets, including the Philadelphia Inquirer and Daily News, has already offered employee buyouts and early retirement as a means to pare its payrolls. Apparently though, that’s not going to be enough belt tightening.

"There will be reductions in most newspapers" the release quotes Knight Ridder Chairman and CEO Tony Ridder as saying. "We hope to achieve those reductions primarily through buyouts and early retirements."

"Hope to?" "Primarily?" Sounds like it’s bad, and about to get worse. Inquirer Managing Editor Butch Ward is putting on the most positive spin possible.

"I can tell you that the mood in the newsroom is anxious," Ward says. "Most people are waiting to hear the details of the proposed buyout before passing judgment. As of right now though, I really don’t know any more than what’s in the press release."

According to Ward, the structure and details of the buyouts haven’t been determined yet, so he’s reserving further comment until the whole thing shakes out.

Knight Ridder notes that overall advertising revenue in February was down 2.7 percent from last year, March’s figures were down 6 percent and April’s numbers may even be more substantial. Meantime, the cost of newsprint went up 20 percent over the same period.

In an internal memo, Inquirer publisher Robert Hall seeks to soothe his nervous workforce while acknowledging some of the same kinds of downward spirals voiced by the parent company.

Advertising revenue in April was well below company targets, with May not looking much more promising, Hall writes. He cites the example of American Appliance, the local appliance company which abruptly closed down last week. American Appliance, according to Hall, was scheduled to spend more than $1 million in advertising with the Inky through the rest of the year.

"I hope that layoffs will not be necessary," Hall writes. "but that will be determined largely by how many buyouts are finalized and when the economy begins to bounce back."

Newspapers all over the nation are feeling the pinch of rising newsprint costs and lower than usual ad revenues, so while the Inquirer and Daily News are certainly feeling the effects of the recent economic downturn, they’re not alone.