Press Democrat purchase by locals is a lesson for Digital First Media
Editor’s note: Digital First Media announced on Sept. 12 that it will consider a sale of part or all of its assets.
This is third in our series: FIRE THE OWNERS
Few things focus the mind like being told you have 72 hours to decide your future.
A group of local investors had reached an agreement in principle to purchase the Santa Rosa Press Democrat and affiliated papers in November 2012 from Florida-based Halifax Media. All that was left to consummate the transaction was for the unionized newsroom staff to ratify a new collective bargaining agreement, in which case the bank would finance the deal.
Or so we were told. Representatives with the newly-formed Sonoma Media Investments had originally told the union we’d have a month to negotiate a new collective bargaining agreement once the purchase was in place. Now they were telling us we had three days, and blaming Halifax for the shortened window.
Every indication we’d gotten from SMI up to then was that their intentions were honest. The group’s members included some of the most well-known figures in the community, including Jeannie Schulz, wife of the late Charles M. Schulz, whose Peanuts comic strip empire was built on newspapers, and Norma Person, whose late husband Evert Person sold the PD to the New York Times in 1985.
These did not seem like people who would have ulterior motives for putting in their own money to buy the paper. Behind-the-scenes, the union had reached out to people of such caliber and community standing to wrangle us from Halifax, which had purchased the paper from the Times in December 2011 and in short order had revealed its true desire, which was to bleed or flip us.
Still, with things getting down to the wire, we couldn’t help but wonder if we were being played. Were the prospective owners bluffing? Was the deadline a ploy to gain concessions?
We were going to find out, on a week when the newsroom staff already was stretched to capacity covering early November elections. File a story. Layout the page. And oh, how do you feel about freezing your pension and taking a 5 percent cut in pay, ostensibly to save the paper?
Those three days culminated the most tumultuous year in The Press Democrat’s history. Employees were stunned in December 2011 when the Times Co. announced that it had sold its regional newspapers to Halifax, a nascent media company backed by Stephens Capital Partners, an investment firm in Little Rock, Ark., controlled by billionaire Warren Stephens.
The Times company was not perfect. But under its wing, the PD earned some of journalism’s highest honors, including the Pulitzer and a Polk Award, and was widely regarded as a first-rate paper, good enough, in fact, that Arthur Sulzberger, Jr., dispatched his son here for a summer internship.
Halifax was an unknown. At a Jan. 16, 2012 town hall-style meeting at a Unitarian church a block from the PD’s downtown offices, Halifax CEO Michael Redding assured nervous employees that the company was committed to community newspapers and had no plans to sell the paper.
However, it became evident during subsequent contract negotiations with Halifax representatives that the company had different intentions. The union’s efforts to broker an agreement were met with intransigence, and by late spring of 2012, we clearly were headed for impasse and a protracted labor battle.
As an alternative, we figured we could find someone else to buy the paper. It’s hard to say when that idea first surfaced. Probably it involved a few cocktails. But what started out as a joke turned into serious discussion as desperation over our situation grew.
When I mentioned to an editor that what the PD really needed was a new owner, he laughed, and said, “That’s not going to happen. Nobody will buy us.”
Regardless, union leaders reached out informally to people in the community who had the financial means on their own, or in concert with others, to buy the paper. One of those calls went to Doug Bosco, a Santa Rosa lawyer and former U.S. Congressman, who informed the union that in fact he did know somebody who was interested. His name was Darius Anderson.
Anderson, in addition to being a former aide to Bosco, is a Sacramento lobbyist, a Sonoma homeowner and a developer who has a lot of political connections and deep ties to Sonoma County. He’s also a huge fan of newspapers, and when he was little, he had a paper route.
Anderson apparently was already working on assembling a team of local investors to put in a bid for the PD. When word filtered to union negotiators, we quietly suspended contract negotiations while waiting for things to play out.
The group lost out in their initial bid for the PD to Black Press of Vancouver, B.C. The company’s tentative deal with Halifax included buying the paper without any of its real estate holdings, before cutting the paper’s operating budget by 43 percent. Black Press is an owner of the San Francisco Examiner and Bay Guardian.
We were headed for a blood-bath. But for reasons that have never been made public, the deal with Black fell through and Sonoma Media was back in the game. This time, their offer was accepted.
Months went by as the terms were negotiated in secret. And then came word that a tentative agreement was in place. The only remaining requirement was the union contract.
As was the case with the Times Co. and with Halifax, Sonoma Media wanted relief from having to pay into the pension fund for union employees, to in effect, freeze pensions at their current levels. SMI representatives said the bank would not finance the sale purchase if it included the risk of unfunded pension liabilities, despite the fact that our fund was on solid financial footing.
SMI also sought a 5 percent wage cut and to take a fifth week of vacation away from the most senior newsroom employees. But they didn’t seek to wipe out our sick banks, convert our vacation to paid time off or to give up our 37.5-hour work-weeks, as Halifax did.
Union negotiators succeeded in gaining a number of important concessions, including a long-sought rewording of jurisdictional language to state that “work of a journalistic nature” was covered by the agreement. That in essence applied to online staffers. We also got a provision guaranteeing no layoffs for the life of the contract, which was three years, and a “me-too” clause that stated that if any PD employees received raises we’d get them, too.
After three round-the-clock days of negotiating, the union team brought the package to members on the morning of Nov. 9, the day of the looming deadline with the bank. By unanimous vote, members supported the new contract. The word was relayed to the SMI group, who had previously scheduled a town-hall meeting at the Unitarian church.
Ten minutes after the contract ratification, all 300-plus employees at the PD assembled inside the church, where for a second time in less than a year they were introduced to a new ownership team. Only this time, a funereal pall had been replaced with something like rapture.
A visibly choked Anderson promised to invest in the paper and to maintain its standing in the community, and to not monkey around with editorial content for his own purposes.
Anderson was followed by Steve Falk, a former publisher of the San Francisco Chronicle and Sonoma Media’s chief executive officer. In a stunning move, Falk invited the newsroom’s union staff to stand so that we could be publicly recognized for ratifying a new contract that he said was essential for the banks to finance the deal.
SMI hadn’t been bluffing.
It’s been nearly two years since that halcyon moment at the church, long enough to test Anderson’s actions against his words. For the most part, he appears to be living up to his promises. The paper has hired employees, invested in new digital and magazine strategies and replaced an aging computer system with a state-of-the-art, cloud-based system. The company brought back Kaiser-Permanente as a health-care option. We still do a fairly kick-ass job covering regional news and bring home the hardware from statewide journalism award competitions.
But Anderson hasn’t been a totally benevolent god. Speaking only for the newsroom, several on-call copy desk staff recently lost all of their hours. The company has informed the union that it intends to do away with pool cars for photographers, even though the alternative – having photographers use their personal vehicles and paying mileage – would be prohibitively more expensive. Although people have been hired to fill some vacancies, we remain woefully understaffed. And we’re all still 5 percent poorer, or more, if you add in factors such as inflation.
But under SMI, there is renewed optimism that the PD will survive into the future and that we’ll be able to continue doing what we love. We look forward to bargaining in good faith with the company next year for a new contract that rewards people for their hard work and for the sacrifices they made getting us to this point.
You want my advice? Be a loud advocate for change, and if that doesn’t get you anywhere, start looking for a new leader. Our experience in Santa Rosa may not be the norm in a world where media companies are traded like commodities in mostly back-room deals.
But brother, it doesn’t hurt to come out swinging. You never know who’ll back you in the fight.
First in series: Wanted: Local buyers for hedge fund-owned papers
Second in series: Guild news staffs launch effort to resuscitate journalism
Fourth in series: Fiscal challenges led to diminished San Mateo Times