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American Journalism Review
Take the Money and Run  | American Journalism Review
 AJR  Features
From AJR,   April/May 2004

Take the Money and Run   

The Washington Posts generous buyout--sorry, Voluntary Retirement Incentive Program--was the classic offer that was too good to refuse. Fifty-six journalists, star writers and columnists among them, headed for the exits. Great for them, but what, if anything, does the loss of all that talent and institutional memory mean for the readers?

By Lori Robertson
Lori Robertson (, a former AJR managing editor, is a senior contributing writer for the magazine.      

Related reading:
   » Cashing Out
   » Life on the Outside

Why did about 130 Washington Post staffers--54 of them in the newsroom and two from the editorial page staff--take an early retirement deal?

How about, because they'd be stupid not to?

Metro columnist Bob Levey says he would've been "a total fool" to leave that kind of money on the table. Claudia Levy, a writer on the obituary desk, calls the decision a no-brainer. Edward Walsh, a political reporter on the national staff, says, "It would have been irresponsible not to do it, frankly."

These people aren't dummies. In fact, many of them are the cream of the crop, stellar journalists who built themselves into experts after decades of covering everything from Congress and the Federal Reserve to the space program and horse racing. Others established themselves as brand-name columnists or massaged copy and made the trains run on time, getting that fat paper out every day.

The Post deal was pretty sweet: Anyone in the newsroom (there were further stipulations for the commercial side) who was at least 55 years old with 10 years of employment at the Post was eligible. The takers walked away with a payment of up to two years' salary, an additional five years of service credit for pension benefits and, for those under 65, a pre-Medicare health plan. Those who racked up 30 years at the paper got the full two years' salary; the rookie 10-year employees got one year's worth; the payment was prorated for the years in between.

It was enough to make many staffers envision walking out of the building with a small box of their possessions.

Linda K. Foley, president of The Newspaper Guild-CWA, says as far as buyouts go, this one was quite generous. Most plans offer a severance of two, maybe three weeks of pay per year of service, she says, and are designed to have people actually take it. But, the Post's lucrative offer, Foley says, was more like, "Here, we're holding the door for you, and we're rolling out the red carpet to the limo that's going to drive you away."

"I think the Post calibrated this offer very carefully," says Kathy Sawyer, a 28-year veteran at the paper who covered space, science and technology, and who took the deal. "If they wanted to prompt an exodus, they knew our asking price."

In Washington Post newsroom terms, this is an exodus. The Post has never experienced layoffs, and it's quite significant to have 56 of its most senior, most experienced journalists say adis. "Any newspaper that loses 1,000 years of experience at the same instance is going to be a lesser newspaper," says Bob Levey. "I don't think that much experience has ever walked out of a newsroom at once in the country."

So why would the Post offer this deal? The reasoning behind it, say many staffers, is a little fuzzy. And how much will these departures affect the quality of the newspaper? Will the readers miss out?

A note on terminology: Post management points out that this was a retirement enhancement program, or, officially, a "Voluntary Retirement Incentive Program," not a buyout. But everyone calls it a buyout--including Managing Editor Steve Coll's assistant, who, when I tried to leave a message in cumbersome corporate-speak, said, "You mean the buyout?"

Whatever you want to call it, it could not have come at a better time for Don Phillips, though he didn't see it that way initially. Phillips had been the Post's transportation writer since 1989--trains are what really get him going--and he immediately decided not to take the Post's offer when it popped up November 5. But the Post wanted Phillips to stop covering surface transportation and concentrate solely on aviation security, he says. For Phillips, who had no desire to do that, the money started looking better and better. (His lump-sum payment: about $164,000.)

By early February, Phillips was not despairing over leaving the paper. On the contrary: He was reveling in what it's like to be a hot commodity at age 61. After entertaining several offers and spending some time "goofing off," Phillips will begin covering worldwide transportation for the International Herald Tribune in Paris in May. The Post deal had "more than a silver lining," Phillips says. "It gave me the opportunity to try something new, because without the buyout, I probably would've stayed and sucked it up and figured...we'll see if anything changes; I'll ride this out."

Others weren't facing such work-related dilemmas, so the decision was tougher. "It was not a welcome opportunity," says Sawyer. She and others did it, simply, "for the money."

And while they may spend a few waking moments pondering why the Post wanted to entice them to leave, they have more important details to determine--such as, what they'll do with the rest of their lives. About half of the newsroom staffers also remained on contract, still working anywhere from one extra month to all of 2004, an arrangement that spaced out the departures, easing the impact on the paper, and delayed some of the retirements.

Why did the Post make its top tier an offer it couldn't refuse? Cost-cutting is the main, if not only, reason these buyout, or buyout-esque, programs exist. But there doesn't seem to be a boy-do-we-need-to-scrimp-and-save message coming from management.

A number of those interviewed for this story say there had been no signs of belt-tightening before this offer came along--a surprise announcement to many that gave them 45 days to decide should they stay or should they go. "I wish I were clear about what the business logic is here," says Levey, 58. "If it were true that all 54 of us were slackers and laggards, I could see this. In fact, all 54 of us were among the top producers at the newspaper every single day. So I think more is going on here in a business sense than I can immediately see." His speculation: "I think part of it was they wanted to shear off the top layer of salaries"--i.e. save money. Another part of it, he says, could be that the Post wanted to "clear the decks" for the next generation of leaders.

Then there's the idea that the company did it to be nice. In other words, in this day and age of corporate, bottom-line, get-the-margins-up-or-we'll-die newspapering, a media company gave its employees a bunch of money to be nice . Despite how ridiculous that sounds to the jaded among us, some at the family-run, lower-profit-margin Post believe it. Levey says there is a lot of cynicism about how serious the company was when it said it wanted to give older staffers a comfortable retirement, but "I choose to believe that was at least some of what they were thinking."

Ask Rick Weiss, a staff writer and the news- side co-chair of the Post Guild unit, or Rick Ehrmann, the local representative of the Washington-Baltimore Newspaper Guild, why the deal was put on the table, and they answer "cost-cutting" with not a doubt in their minds. Management was "very straight-forward about their incentive, and it was to save money," Weiss says.

But management downplays the role dollars played in the deal. Publisher and CEO Boisfeuillet Jones Jr. starts off by mentioning the large surplus in the Post pension fund, out of which the company could take money for the buyouts. (The early retirement deal cost the Post $19.5 million.) "First of all, we had a well-funded pension plan, so we could do it," Jones says. "And we thought that it would create some opportunity for some movement in the newsroom, where there really wasn't a lot. That's probably a good thing now and then, to be able to let people move into other positions and have flexibility to restructure some things." It was also a good opportunity, he says, to provide a much-improved retirement package.

Cost savings was a part of the reasoning, he says--but adds that the newsroom budget will actually go up by several percent this year.

As for any of that ubiquitous Wall Street pressure, Jones says: "I get zero pressure to do anything from Wall Street--[Post Chairman] Don Graham protects us from that--or to make the numbers look good for the short term.... At the same time, however, Graham, as he did when he was publisher, he expects the newspaper to run a good, efficient business, to be healthy in the long term."

What about that pension surplus? The Guild's Ehrmann says in 2001 the assets of the pension plan were double what they needed to be to pay liabilities. In its 2002 contract, the Guild was able to secure increased pension benefits because of that extra money.

There is lot of speculation--here comes the cynicism--that the Post Co. faced IRS penalties for carrying such a gigantic pension surplus and that this taxation issue prompted the buyouts. But Ron Gebhardtsbauer, senior pension fellow at the American Academy of Actuaries, says no. "There's no maximum amount of money that you can have in a pension fund." There is a penalty for putting more into a plan than the maximum amount allowed in any given year, and a company is taxed big-time for taking money out and using it for anything other than pension expenses, he says--but no penalty for simply investing well, even really well.

In the past, Executive Editor Leonard Downie Jr. has nixed the idea of extending a commercial-side buyout program to the newsroom. Why give the go-ahead this time? Downie says there was an older population in the newsroom, many people who were hired when he was, back in the '60s and '70s. "The possibility of offering people who were around retirement age anyway an enhanced pension seems like a good idea to me," he says. He calls the deal "partially a cost-cutting move." Most of the vacated positions will be filled, he says.

But clearly many of the new hires won't be making nearly what the oldest employees in the newsroom were.

As for the theory that this was a clearing-the-way move for Steve Coll's future leadership, the managing editor says, "No one ever said that to me." Coll does say--and he stresses that this was not a cause of the decision but a context in which the decision was made--that "we were concerned, we still are concerned about internal mobility and creating a climate where talented journalists can renew themselves." This was particularly a worry about a group of journalists who were hired in the '90s during a time of Post expansion, who had become, says Coll, "a little bit boxed out."

In a way, the buyout was the easy part. Good people got a good sum of money--who's not happy about that? But now that there are empty desks, plenty of room for mobility and the need to hire, and hire well, how will the Post recover from this loss of expertise?

No one is prophesying that the sky is falling on one of the great newspapers in the country, but many are concerned about how the Post could not only let this happen but encourage it. The Guild's Linda Foley says buyouts "add to the brain drain that I think is going on in journalism, and this is particularly true in this case, because there were an awful lot of people, as I understand it, who have been pillars in the newsroom of the Washington Post who are taking this."

Other couldn't care less. "I don't think the quality of the paper will suffer at all," says Jack Shafer, editor at large and media commentator at Slate and former editor of the Washington City Paper, a man who's not one to miss the chance to criticize the Post. "Not only will the average reader of the Washington Post not notice the difference, a paid reader of the Washington Post, like myself, won't notice the difference."

Among those departing, in addition to now-former staffers already mentioned, are Senate reporter Helen Dewar, on contract for this year; Dan Morgan, a congressional reporter, also on contract for the year; financial reporter Peter Behr, who will continue to periodically write for the paper; Federal Reserve guru John M. Berry; Andrew Beyer, an expert on horseracing, also on contract; Style section legend Henry Allen, also on contract until the end of the year; movie critic Rita Kempley; and columnists Mary McGrory, William Raspberry and Abigail Trafford, the latter two of whom remain on contract.

Among those who are leaving or staying at the Post, there's a range of opinions about how much the exits will affect the paper. Many say the Post will carry on just fine. Edward Walsh says the paper will lose a lot of institutional memory, "but the Post is loaded with talented people," so the paper won't suffer for long. "I've always known," Walsh admits, "no one is indispensable at the newspaper."

Bill Elsen, 60, a metro copy editor who has held a number of editing positions in his 33 years with the paper, agrees the recovery will be short. "I think it might have been a calamity if we all had to leave the building on December 31," Elsen says. "But a lot of people on contract are there because what they do would be missed enough to create real problems." As a former director of recruiting and hiring in the newsroom, he says, "it's real hard to go out and hire that many people in a short period of time."

Just how many people that is, however, isn't clear. Coll says more than a majority of the open positions will be filled, but the Post isn't releasing a hard number. He casts the hiring phase as a real challenge, and he says he doesn't underestimate the scale of this change in the newsroom. "I have bittersweet feelings about it," Coll says. "Walking away from the paper is a generation of journalists who have really defined the character of the paper in lots of important ways."

Looking ahead, however, "there is an enormous opportunity in the newsroom to take advantage of the hiring that we're going to go and do over the next 18 months," he said in early February. The publisher requested that the newsroom not rush to fill the positions, Coll says, which would help the bottom line. Plus, he and Downie didn't think hiring quickly would necessarily bring in the best candidates.

Downie is not particularly worried about the loss of institutional memory. The Post newsroom has nearly 800 positions, he points out, and it's not like those who took the deal are "disappearing off the face of the earth." They will stay connected to the newsroom, coming back to visit or doing freelance work.

Unfortunately, during this hiring challenge, the Post's director of recruiting and hiring for the newsroom, Cheryl Butler, is among those leaving. She was on contract until the end of March to wrap up loose ends. But there hasn't been much wrapping up, she says, not with all the recruiting going on. While it's not easy to fill those holes--more than the newsroom has had before--Butler, 59, says, "I know we'll find the right people eventually."

Post staffers aren't necessarily bothered by the empty desks. Frank Ahrens, a staff writer in the business section, says there are nine positions to be filled in financial, not all because of the buyouts. But "it's a necessary reinvigoration," he says. Not to minimize the contributions of those who left, he says, but "I'm sure we'll grow great stars to fill their positions." Ahrens is also glad to see journalists, who don't bring in a lot of money, at least not in "real-world money" terms, get a little more than a gold watch as a reward.

Joe Elbert, assistant managing editor for photography, lost three photographers--he has no one on Capitol Hill, he says--but he's glad some senior staffers got a good retirement. "I'm happy for them," he says, "but I'm having to suck it up." (If we see a lot of wire photos, he notes, we know he really messed up.)

He'll get back his three photographers over the next year. It doesn't seem like the Post is cutting back, he says. "You can't downsize the staff without downsizing the products." And Elbert doesn't see the Post doing that.

But Rick Weiss says the departures leave the Post in a "somewhat precarious position. There's a huge amount of reporting talent and institutional memory, not only memory of our own institution but memory of the federal budget and how it works, memory of every agency we cover. And so it poses a challenge to those of us who remain in the newsroom."

Can a paper lose that much talent and come out unscathed? Those who have suffered through buyouts say yes, as long as the positions are filled. Doyle McManus, the Los Angeles Times Washington bureau chief, has been through three buyouts at the paper, one of which he had to manage. The key question, he says, is whether you are allowed to hire real talent to replace what left. "And we were able to do that, so I think we are, our Washington staff is as strong or stronger than it was before the buyouts."

The Philadelphia Inquirer lost about 100 people through attrition and two rounds of buyouts in 2000 and 2001. Says Inquirer metro columnist Tom Ferrick Jr., "You think the worst part is that you're losing this talent, and that is a bad part, but really that's not the worst part. The worst part of buyouts is they're a gentle form of attrition." If those positions are "darkened," he says, "that has a more lasting effect than the loss of talent."

There's actually a bright side to bringing in replacements, says Ferrick. "It's not a bad thing for a newspaper if you can renew yourself and bring younger staffers in and introduce new blood."

Post reader Dan Thomasson, a former vice president of E.W. Scripps Co. and Scripps Howard Washington bureau chief, isn't so sure. "What happens is obviously you lose a lot of institutional memory and expertise that it's taken a long time to build up," he says. "You can't replace that anytime soon if you go out and hire people for less money."

The numerous contracts the Post gave out to the buyout takers have delayed the real impact for the paper's readers. "The central issue is, will it affect the quality of the news?" says Marvin Kalb, a senior fellow at Harvard University's Joan Shorenstein Center on the Press, Politics and Public Policy. "I have seen no evidence that this has affected the quality of the Washington Post. Come back and talk to me in a few years."

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