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American Journalism Review
The Buyout Boom  | American Journalism Review
 AJR  Features
From AJR,   July/August 1993

The Buyout Boom   

Buyouts save money for newspapers and give journalists a chance to write novels, travel or change careers. But they can have a demoralizing effect on a newsroom.

By Elizabeth Chang
Elizabeth Chang, a former editorial writer forthe Capital in Annapolis, Maryland, is a Washington-based writer and parttime editor at the Washington Post.      

Last month, investigative reporter Victor Merina took a buyout from the Los Angeles Times, leaving one of the plum jobs in journalism to fulfill a classic reporter's dream: writing a novel.

Merina, 44, says some of his friends thought he was crazy, and he even wondered himself. After all, he and his wife, Cynthia, an elementary school teacher, have four children, ages nine to 19, one of whom is in college. The Southern California economy is in shambles, the rest of the country is mired in a glacial recovery, and the newspaper industry, which he thinks he may rejoin after he finishes his book and a few other projects, is shrinking.

But there was this idea for a novel rattling around his brain. His job, wonderful as it was, didn't allow him to give the story the attention he thought it deserved. "You need to get it out of your system in a sense," he says. "You need to write through it – and feel that you really took a great chance."

Donna Crivello, former art and design director for Baltimore's Sun, also took a buyout – and a chance – in late 1991. She used the money to bankroll a lifelong dream: her own restaurant. Less than a year after she left the paper Donna's Coffee Bar, most of its interior designed by Crivello, was operating on a corner in downtown Baltimore.

Crivello, 41, who says she believes newspaper design should follow editorial content instead of dictating it, found herself swimming against the tide at the Sun. "I was unhappy going to work in the morning, daily there were more problems, there were more things that were happening that were disillusioning," she says. When the buyout offer came, everything "just seemed to fall into place." She has never regretted her decision to leave. "It's more important to me to be happy and take a risk than to stay in a place where I really wasn't that happy," she says. The buyout reinforced her belief that "you can do whatever you want to do."

Merina and Crivello are among hundreds of journalists who have eagerly taken advantage of buyout offers from newspapers struggling to cope with the recession. For many journalists who want to take up a new career or take a leave from the profession, buyouts can be a welcome gift. And for newspapers, they mean saving money. But while generally perceived to be preferable to layoffs, buyouts pose challenges and dangers of their own, the greatest being that valuable personnel like Merina and Crivello will leave. Because of buyout offers, newspapers have lost top talent to competitors, lifestyle changes and fondly held, long-suppressed dreams. "Invariably, management sees buyouts as a way to get rid of deadwood, but invariably many of the people who take the money and run are the most creative and the brightest stars," says Howard Kurtz, media writer for the Washington Post and author of "Media Circus: The Trouble With America's Newspapers."

The fact that so many mid-career journalists have walked away from jobs at the Sun in Baltimore and the Los Angeles Times, newspapers that offered buyouts to almost everyone on their staffs, is proof for some journalists that the industry is on a permanent downward slide. "Reporters in newspaper after newspaper have told me that the business isn't as fun as it used to be, that they're tired of preconceived story ideas and heavy-handed editing and the tighter and brighter formula that is in vogue at some papers," says Kurtz. "The atmosphere at many newsrooms these days represents that of an insurance agency. In some ways the passion has gone out of the business."

Those who have departed say buyouts themselves may have contributed to journalists' disillusionment because they project a harsh reality of their own: that the downsizing of the news industry is here to stay, that the scope of newspapers is contracting, and that coverage is becoming shallower.

A New Kind of Buyout

The highly publicized buyouts at the Sun and the Times have been the largest and most controversial, but since 1990 other papers have resorted to them, including the New York Times, Boston Globe, Seattle Times, Newsday, Philadelphia Inquirer, San Francisco Examiner, San Diego Union-Tribune, New York Daily News and Los Angeles Daily News.

Buyouts came into vogue in the 1970s as a way to persuade production workers to give up lifetime job guarantees, as hot type disappeared and newsroom computers took over much of the typesetting functions. But during the burgeoning 1980s, the idea that major newspapers would pay some of their most talented and productive reporters and editors to leave was unthinkable. Newsrooms were overcrowded with staffers added to take over functions formerly done by production workers, as well as to fill larger news holes, new sections and zoned editions.

With the arrival of the 1990s, buyouts have spread beyond the production departments. "What's new is that until now, we have never had these kinds of buyouts for editorial people," says newspaper analyst John Morton. "The idea of presenting these kinds of buyout offers is essentially a phenomenon of the 1990 recession."

Critics contend that while newspapers remain more prosperous than many other businesses, publishers aren't willing to settle for lower profits. "They say they're poor, which is nonsense," says media critic Ben Bagdikian. Kurtz agrees. "Newspaper profits in the middle of the recession are very healthy," he says. "I think many newspapers got addicted to the unrealistic profit margins of the late '80s, and many are now slashing costs to keep their numbers up in the face of a recession. Most of the newspapers that have had buyouts have not been losing money, they've just been making less money than they'd like."

Morton says many newspapers are engaged in a Darwinian struggle for survival in a shrinking industry. "It is undeniable that newspapers that are surviving in this atmosphere are those that do pay attention to the bottom line... The graveyard is full of newspapers that were good but didn't make money."

Many publishers in search of savings have turned to their most easily expendable resource: their staffs. "They call it downsizing," says Linda Foley, executive secretary of the Newspaper Guild's contract committee. "I don't like that term. I think it depersonalizes what's happening to people." Downsizing has come in the form of hiring freezes, attrition and layoffs; scarcely a newspaper has been unaffected. But it is buyouts that represent the extreme of downsizing. Layoffs are temporary measures; they indicate that workers will be rehired when the financial situation turns around. But with buyouts, there's no rehire list.

By offering buyouts, Morton says, publishers are implicitly saying, "These jobs are never going to come back and we think the most humane and responsible way of handling it is to offer you some sum of money... We no longer have any obligation to you at all."

Better than Layoffs

Newspapers turn to buyouts for both altruistic and practical reasons. "It's better than layoffs, certainly, particularly from the point of view of the person who's being separated from the newspaper," says Edward Seaton, who chaired the American Society of Newspaper Editors' human resources committee until last April. "It also has a more favorable impact on the remaining staff."

But buyouts have other advantages for managers intent on selectively trimming their staffs. They can be structured to encourage senior employees to retire, thus saving more money than laying off a comparable number of lower-ranking, and lower-paid, employees. If senior employees are less productive than younger employees, or more resistant to change, that's another plus for management.

Buyouts also can protect gains made in the hiring of women and minorities. "We've done a considerable amount of hiring of minorities and women in recent years and a lot of that would have been undone" by layoffs, says Deputy Editor Gene Foreman of the Philadelphia Inquirer, since the last hired are often the first fired.

But there are drawbacks to buyouts, chief among them that editors cannot prevent talented, eligible employees from taking the offers. "You don't have any control over who takes it, so you may lose your best people and you may lose people you have to replace," says Seaton, editor in chief of the Manhattan Mercury in Kansas.

In order for large-scale buyout programs to work, offers must be attractive. But those offers may tempt employees who weren't targeted and send managers scrambling to try to talk top reporters and editors out of leaving. James D. Squires, former editor of the Chicago Tribune and author of "Read All About It: The Corporate Takeover of America's Newspapers," says a buyout lets employees know where they stand. "If they didn't come to you and try to talk you out of taking the buyout, then you know it was aimed at you."

And while management may think that buyouts send a positive, caring message to the staff, they can adversely affect morale. Buyouts often come as unwelcome final straws to staffs already stretched thin by hiring freezes, attrition and canceled leaves of absence. Those who remain know they will be required to shoulder a heavier load, often doing more with fewer resources. Buyouts can create job insecurity, prompting staffers to press management about the future. They can cause unhappiness or resentment among staffers unable to take the offers because of financial considerations or lack of seniority. And they change tenors of newsrooms as 10, 20 or 90 people walk out the door – taking their experience and institutional knowledge with them.

All Bets Are Off

The unpredictability of buyouts is illustrated by the experiences of the Sun in Baltimore and the Los Angeles Times; both offered buyouts to nearly every member of their staffs and received more takers than they had hoped for.

At the Sun, 297 staffers accepted buyouts in January 1992, after employees were offered six months' to a year's pay and subsidized health insurance. Seventy-seven takers came from the newsroom and 20 more from the suburban bureaus.

According to Tom Kavanagh, a former arts and entertainment editor who took a buyout, the offer created an almost surreal atmosphere as people considered which direction their lives should take. "It was the strangest period of my life and I think in the lives of most people there," says Kavanagh, 38. "Suddenly all bets were off, all options were available and people who I thought would never consider it did consider it."

Contributing to the uncertainty were other factors: The Sun was merging its morning and afternoon staffs, and the paper was planning a new zoning effort. According to Kavanagh, some people signed up for the buyout and used it as a bargaining chip to make sure they wound up with assignments they wanted.

"I think [the buyouts] clearly hurt the Sun's ability to do what it wanted under Sunburst [the zoning plan]," says Washington-Baltimore Newspaper Guild President Connie Knox, 50, a Sun features copy editor who turned down the offer. "The effect of the buyout has been that work doesn't get done, doesn't get done the way it should, or that people have so much work to do that they're really under the gun."

Knox said the offer was too open and that the number of buyouts granted should have been capped by department. "If they can zone their paper, they can certainly zone their buyout offers," she says.

While John Carroll, the paper's editor, concedes that the buyout should have been limited in the newsroom, he rejects the charge that the newspaper is short-staffed as a result. "We ended up expanding local coverage very extensively in three counties and that took a lot of manpower, but at the same time we combined the staffs of the morning and evening papers," he says, "so in effect we were able to make up for the losses by doing away with the idea of an individually staffed Evening Sun."

After the buyout, Sun editors hired 29 people to implement the zoning plan, Carroll adds. Some replaced those who took buyouts.

In retrospect, Carroll says, the biggest mistake was trying to give employees assurances about their future positions at the paper. Although promises were made in good faith, he says, the paper wound up with fewer beats than planned, and experienced reporters were forced to take what they considered second-rate assignments.

The newsroom has settled down in the year and a half since, Carroll says, partly because of an unexpected consequence: "One thing a buyout does is it reduces your turnover for a couple of years."

The L.A. Experience

Early this year, 668 people at the Los Angeles Times accepted buyouts, many more than the 500 positions the newspaper had hoped to eliminate. Times management offered employees up to two years' pay and 18 months' of company paid health coverage, depending on how long they'd been at the paper.

Although managers had initially set a cap of 25 editorial employees in addition to an unlimited number from the San Diego edition, which was shutting down, they eventually approved 88 editorial buyouts: 32 reporters, 21 copy editors, eight editors, seven artists and photographers, and 20 support personnel. The number of buyouts was capped according to department and then granted by seniority, so not all of those interested were allowed to take advantage of the offer.

Editor Shelby Coffey III and spokeswoman Laura Morgan say there is no reason for surprise at the large number. "It would not have been that generous a package, and that many would not have been approved, if we had not been serious about reducing staffing levels," Morgan says.

But if Coffey and Morgan weren't shocked by the number who took buyouts, some staffers were, despite the fact that the Times has experienced internal problems recently over coverage and treatment of women and minorities.

"I was stunned," says investigative reporter Tracy Wood. "I knew there was this feeling building but I thought there'd be much much fewer people... I thought more people would be nervous about bailing out in this economy." Wood, 49, who took a buyout to write a nonfiction book about an unsolved murder, stressed that she wasn't unhappy with Times management, but that she understood the complaints of those who were.

One is Bella Stumbo, a veteran feature writer who found out when she and coworkers began discussing the offer that she was being paid less than men in comparable positions. "I never even thought about salaries until this buyout," says Stumbo, 49, who believes the women of her generation spent so many years trying to prove they could do the job that they didn't pay attention to salaries. "And now, after 21 years I look around and..I find that most of us in my age group are not being paid fair wages commensurate with the men in the same job classifications." She decided she could do better.

Stumbo, who had just returned from an 18-month leave to write a book, is now writing another. Her goal, she says, "is financial independence with dignity."

(Coffey refuses to discuss the cases of individual employees, but says salaries at the Times are periodically reviewed and that he doesn't think disparities exist.)

Sabrina Hockaday, president of the Los Angeles local of the Newspaper Guild, says the buyout will help the chapter's efforts to organize the non-union paper. She says it was just the latest evidence of a shift in management priorities from a family-run to a more corporate, bottom-line-oriented product. "It's a new feeling for folks at the L.A. Times to kind of feel vulnerable," she says.

Another reporter who, like Stumbo, left partly over a dispute with management was Ron Soble, a 57-year-old reporter who felt he had been "forcibly transferred" to the suburban staff two years earlier. Soble, who says he loved his job for the first 18 years, decided to make the break because of the attractive package offered by the Times, his disenchantment with the Times' management and a job offer at the Los Angeles Daily News. "In my opinion, the new management under Publisher David Laventhol and Editor Shelby Coffey has a remorseless view of how to deal with a diminishing profit margin," he says. "They opted to get rid of their highest-paid, older writers, and to some extent, succeeded."

While conceding that the Times and the Sun have lost talent, journalists inside and outside the papers say both will recover. "You can't remove the kinds of experienced talent that is represented by these buyouts and not have an impact," says Morton. "Is it a fatal thing? Of course not."

Buyouts can be good for newspapers, according to Jim Squires, who used them to reduce staff in the late 1970s and early 1980s while at the Orlando Sentinel and the Chicago Tribune. "You have to remember that some papers were so top-heavy with editorial people that removing some of them either by firing or buyouts would actually improve the paper in terms of morale and performance and not damage it," he says. "In the case of the Los Angeles Times, that newspaper had more people than any newspaper ever needed in the history of newspapering."

Ben Bagdikian cautions that buyouts potentially can cause long-term harm. While smaller staffs may be able to get the paper out, coverage will suffer, he says. "You can't put out a quality paper without a surplus of stories."

More Typical Buyouts

Unlike the Times and the Sun, most newspapers target newsroom employees with considerable experience, unless a merger is involved, such as at the San Diego Union-Tribune in 1992. There employees were told that layoffs would follow a voluntary retirement and buyout program necessitated by the closing of the afternoon Tribune. Management wanted to eliminate 140 positions in the newsroom, library and photo department. One hundred and six people either took buyouts or retired; 34 were laid off.

Meanwhile, papers such as the New York Times, Newsday, Seattle Times and Boston Globe offered more typical buyout programs, restricted to employees over a certain age, or with at least 10 to 15 years of experience at the papers. The papers lost between 20 and 40 newsroom employees to buyouts.

The buyouts at these papers were not nearly as unsettling as those at the Sun and the Los Angeles Times. "The impact on the paper has been negligible," says Globe op-ed columnist Alex Beam. "The paper was well-staffed before the buyout and it's still well-staffed... I really don't think it was that big a deal here."

While targeted buyouts can better protect a newspaper's resources, they often aren't as lucrative for employees. Michael Weber, a Newsday investigative reporter and editorial vice president of the newsroom's union, noted that the Newsday package was not as generous as those at the Sun and the L.A. Times, both of which are also Times Mirror papers. "Our people got a lot less money to go," he says. "But when you're only looking for a certain number of people, you don't have to make it as attractive."

The Philadelphia Inquirer took a different approach to its 1992 downsizing: Besides buyouts, it offered leaves with fully paid medical benefits and shorter work weeks with prorated salaries. Twelve newsroom staffers took buyouts, nine shortened their work weeks and 65 took leaves ranging from a week to a year to do things like spending time with family, sailing around the world or writing a book, says Deputy Editor Foreman.

The offer was more attractive to younger employees than those approaching retirement age because the benefit was capped at just 40 weeks of salary, which retiring employees over 60 could take at any time, Foreman says. "In normal times there's no way we would be offering buyouts blind like that. Generally you would not be putting yourself in the position of helping people to leave your paper who you don't want to leave your paper."

If anything good has come from the program, besides avoiding layoffs, it's an awareness of the benefits of a more generous leave policy, Foreman says. The paper's more moderate stance on leave time allowed employees to take a sabbatical at their own expense and come back recharged and ready to work.

This year, the liberal leave policy has continued, with approximately 12 staffers on leave and 10 working shorter weeks, Foreman says. While he doesn't expect the leave policy to remain as generous when the recession ends, he thinks it will be more liberal than before the recent downsizing.

A Limited Future?

If all newsroom buyouts had been on the smaller, tailored scale of those at papers such as the New York Times and the Inquirer, perhaps they would have received little, if any, attention. But when the Los Angeles Times and the Sun in Baltimore offered unusually broad buyout programs, some believe they were also taking the pulse of the industry, and the pulse was erratic.

Many mid-career journalists left because of disappointment with daily journalism and a fear about its future. "I think people are looking at the direction and the future of the newspaper industry..and what we see is a more limited future, in the breadth of stories that we used to do and the opportunity to do those stories and the resources that are available," says Victor Merina.

"I think newspapers are getting more and more shallow and aping television," says Rudy Abramson, 55, who took a buyout from the Times' Washington bureau to write books. "I just don't find newspaper reporting these days very rewarding."

Journalists' unhappiness with the state of the industry was documented last November by a survey sponsored by the Freedom Forum of 1,410 print and broadcast reporters. Twenty-seven percent said that they were very satisfied with their jobs, down from 49 percent in 1971. And more than 20 percent said they planned to leave the profession within five years.

Many journalists who have taken buyouts say they were tired of watching concerns about advertising, art, graphics and the bottom line crowd out concerns about coverage. They speak of USA Today as if it were an expletive and scorn "user-friendly" journalism. "I don't want to write a story about 10 good tips for your kitchen," says Kathleen Hendrix, 52, who left a feature writing position at the L.A. Times.

What surprises Hendrix about herself and her colleagues who took buyouts was that dissatisfaction was so strong that it outweighed concerns about their futures. Many of the people who left the Times weren't ready to retire or didn't have any solid job offers or book contracts, yet left anyway, she says. "We quit jobs that people in journalism would kill for." She's now looking for a job with the federal government in Washington, D.C.

Tom Kavanagh saw a similar undercurrent of unhappiness at the Sun. "Many of [those who left] had hit their strides professionally, they were working for a major metropolitan newspaper..and could have been 'comfortable,' " he says. "There was restlessness and dissatisfaction that prompted them to head in another direction and in a time when the economy was pretty bad."

Linda Foley of the Newspaper Guild says that many journalists aren't willing to settle for the diminishing returns of today's journalism. "I was attracted to the craft not because I thought I was going to make so much money, but the intangibles attracted me," she says. "It's one of the few jobs where you feel you can make a difference. That sort of sense of mission is disappearing and those intangibles are missing with it."

Not everyone sees a trend in the number of journalists voluntarily leaving papers like the Sun and Times. Jim Squires, for example, doesn't find anything surprising in the decision of mid-career reporters and editors to switch jobs. "That's a reflection of the times," he says. "I think a lot of mid-career people..are ready for a new career. I also think reporting and journalism is a young person's game."

John Morton believes the number of people taking buyouts can be attributed simply to money. "No one in the history of newspapering has ever expected editorial people to act in their own economic best interest," he says. "If you were [L.A. Times cartoonist] Paul Conrad and they offered you a bundle to say goodbye..why wouldn't you flee?" Although the concerns of journalists leaving the industry say something about their perception that newspapers have no future, Morton says those fears are exaggerated. Yet he faults management for failing to realize "the depth of disenchantment, the depth of mistaken concern about the newspaper business."

Shelby Coffey thinks the idea that there is a general dissatisfaction with newspaper work is a result of the large-scale nature of the buyouts at the Sun and the Times. "This can be a tense and exacting business and there's no question that as you look across the field of journalism you would find individuals who at various points say, 'I want to do something else,' " he says.

With a year's worth of employee movement or attrition compressed into a period of weeks, "as one person put it, 'You sort of have a massive identity crisis,' " Coffey says.

Adds Carroll, "It forces your entire newsroom to answer very fundamental questions of identity. People who have been carrying with them a dream of writing a book or opening a restaurant are suddenly forced to decide whether that's just a dream, or whether they have the gumption to do it."

In some cases, Carroll thinks the option can reinforce journalists' commitment. For them, the decision not to take a buyout was "like taking second vows."

But others see more at work at the Times and the Sun than the typical reporter's angst multiplied a hundred-fold. "I think there is a real frustration in the newsroom that goes beyond the usual grousing," says Howard Kurtz. The fact that so many people left the Sun and Times is "a symptom of the malaise that many reporters, particularly middle-aged ones, feel about what's happening to the business these days. It forces them to make a choice sooner than they might otherwise about whether they want to spend the rest of their working lives in a profession that has so many problems." l



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