Main Street Journal: Feature Article: How Journalism in Memphis is Adapting: Changes at the Commercial Appeal and the Flye

The following article is taken from the March 2009 issue of the Main Street Journal. Click “Subscribe Online” above to start your subscription.

How Journalism in Memphis is Adapting: Changes at the Commercial Appeal and the Flyer
By: Richard Thompson

In his Feb. 5 column for The Memphis Flyer, Bruce VanWyngarden didn’t bury the lead.

“I just took an 8 percent salary cut — and so did almost everyone else here at Contemporary Media, Inc., which publishes the (Memphis) Flyer, Memphis magazine, Memphis Parent, MBQ, and various other specialty magazines,” Contemporary’s associate publisher and editorial director self-reported in the column.

It’s the first such pay cut in CMI’s history.

Some employees at the lower end of the pay scale took a 4 percent pay cut and the company also suspended its 401(k) matching program.

“Nobody around here, to say the least, is happy about this development, but the cuts were made as a proactive measure in light of the sagging economy,” the column continued. VanWyngarden seemingly characterizes the cuts as an adjustment to the times rather than a bona fide struggle. He declined to comment beyond what he wrote.

The cuts will be re-evaluated at the end of June, and another silver lining: no one lost their job—unlike last August, when Contemporary Media laid off one staff writer. The 20-year-old company employs up to 50 people.

“I think I speak for everybody–including management–when I say that they suck,” wrote Chris Davis, the Flyer’s media columnist, in an E-mail. “But the cuts aren’t intended to be permanent and they certainly don’t suck like an unemployment check sucks or like having to look for work at a time when everybody is laying people off.”

He has a point.

“It’s important to understand that this is [a] company-wide cut and the folks on top are being hit the hardest. When you include profit-sharing bonuses that management won’t be collecting they’ve taken on even more substantial cuts to insure that the rest of us can keep our jobs,” Davis continued in his E-mail.

“That’s not the kind of story you hear very often these days, and knowing that makes the medicine go down a lot easier. That’s a very unambiguous statement that management believes in their product and in the team they’ve assembled to make that product.”

Perhaps, the “go down a lot easier” part depends on where you work.

Take the Commercial Appeal, for instance, not that CMI is really a comparison. The Flyer, for instance, publishes 50,000+ issues weekly, for free, whereas the CA prints and sells double that amount plus some each day as the region’s largest and daily newspaper.
Nevertheless, days after the Flyer’s self-reportage, E.W. Scripps Co., the CA’s parent company, had some “difficult news” of its own.

In a Feb. 18 E-mail to Scripps employees, CEO Rich Boehne wrote that the company needed to take even more cost-reduction measures, including pay cuts (beyond the senior managers, locally and at corporate, who had 5 to 15 percent of salaries cut in January); a temporary suspension of the 401(k) match, starting in April; and a freeze in the pension plan to occur at a later date.

That same day, according to the CA, management announced that it was freezing 401(k) matching for nonunion employees as well as pensions. It also informed the Memphis Newspaper Guild, the CA’s largest union, that it planned to make more jobs cuts by March 12, of which the size and scope was still being evaluated at the time.

On Feb. 19, Scripps released the results for the fourth quarter of 2008, which included a loss from continuing operations before taxes and minority interests of $19.4 million, “a significant decline from nearly $45 million in income a year ago,” said Tim Stautberg, Scripps’s senior vice president and chief financial officer, to analysts during the earnings conference call.

Though, it still should be noted that Scripps was a lot bigger in 2007; the television, newspaper, and licensing and syndication businesses were spun off last year, which led to some notable write-downs in the fourth quarter that seemingly had more to do with the split and other things than the economy.
However, that footnote doesn’t undercut the toughness of the times. As Stautberg noted in the conference call, 2009 does stand to be the “most difficult year that anyone at the company has faced.” Days have been filled with other media companies echoing that belief.

But it’s still difficult for the Commercial Appeal because Guild-covered employees have been without a new contract and an across-the-board raise for six years and counting. The reality of another job reduction—the third in less than a year—is enough to send morale plummeting like the Dow Jones Industrial Average. There’s little confidence in the situation at 495 Union.

“We’re just trying to keep our head above water,” said CA publisher Joe Pepe in the newspaper’s Feb. 19 article on Scripps’s earning. “It’s rough right now. There’s not a lot of businesses doing well right now. Our business absolutely reflects the businesses in our community. They’re not doing well, and neither are we.”

To that end, CA Editor Chris Peck penned a Feb. 22 column about the need for some people to start thinking about developing a Plan B.

It is what it is.

There’s pain, but less angst, at 460 Tennessee Street, where Contemporary Media is located.
Senior Writer John Branston, who has been with the Flyer for 17 years and spent years at the CA before that, said talking about pay cuts is different in theory than when reality sets in. He saw that when he got his first check with the 8 percent taken out and the addition of the 6 percent that he usually contributes to his 401(k) plan.

“The cut in take-home pay was significant–even putting the 6 percent back,” said Branston, who describes himself as a pretty frugal guy.

But, as Davis suggested, the cut is easier to fathom and endure when one takes the culture of the workplace into consideration.

“We have a genuinely open culture at CMI. There is a management advisory council and if I need an audience with the publisher all I have to do is knock. Thus far no questions have been ruled off limits. That kind of openness also helps even if it’s awkward sometimes,” said Davis in an E-mail, adding that it doesn’t mean that complaints don’t arise, because they do.

The workplace is close-knit.

Branston agrees: “The family analogy is pretty close. I’ve got a half-dozen colleagues—Jackson Baker—whom I’ve worked with for 10 to 15 years or so. I think Ken Neill, the publisher, treats it that way. He’s a pretty big hearted guy.”

Outside of the culture, though, Branston sees a bigger picture for journalism in these difficult times.
“The bigger question is what journalism will have to do if salaries can’t be supported at a level that keeps them interested beyond the entry level. I think it will have to go to some kind of angel support either from non-profits or become a non-profit” or a vehicle where people who don’t want to work in the framework of a daily newspaper can work at a livable salary, he said.

“The advertising model was a money wagon for Scripps and every other city. They had both papers. (The Press-Scimitar folded in 1980s) So, they had a monopoly so the profits were fantastic. (Profit) is down but what they often don’t say is that it was pretty damn good for a long time and they still make money. We don’t know how much but it still makes money,” Branston said.

(To highlight his point, segment profit at newspapers managed solely by Scripps was $12.9 million in the fourth quarter of 2008, compared with $37.3 million in the same quarter a year ago; specific figures for individual properties are not given.)

“Our company, we have a board of directors, shareholders basically. And they take almost nothing out of it. They got a dividend in the glory years, in the early 90s or something, but they don’t take annual checks out of it,” Branston said.

“Everything that we take in is paid out in salaries and expenses to the company. It’s something that most of us are pretty proud of. If there’s a profit margin, then it gets distributed to the employees in raises and bonuses at the end of the year. But we haven’t been able to do that for a few years.”
But back to the bigger question about journalism in general, Branston said he believes that some journalists—who are not as well positioned financially as he is—could leave the profession.

“If they are being courted by some corporation to be the PR person at 40 percent more salary, they are going to say, ‘Yeah, the bylines were nice for awhile. The freedom was nice. The location I worked at, the comradery was nice. The chance to meet interesting people was nice but I’ve got two children, my bills exceed my income and I don’t have any choice.’”

“The business attracts people I think because it’s interesting. It appeals to your vanity. You’re sort of in the middle of events. You get to see interesting people,” he said. “But you can’t go years without raises and then pile declines, or cuts, on years without raises and hold onto people.”

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