Just One Strike and You Could Be Out   

Newspapers on the edge may not survive the stress of a strike.

Before automation robbed newspaper unions of most of their power to shut down a newspaper – say 20 to 30 years ago – it was not unusual to have 30 or 40 newspaper strikes a year.

A strike may have lasted days or weeks, sometimes even months, until a compromise was struck and everybody went back to work, with lost wages for the employees and lost profits for the newspaper the major casualties.

Now there are typically only two or three strikes a year and a newspaper itself might be a casualty. The unions in the recent strike against the San Francisco Chronicle and San Francisco Examiner may have come closer to risking that ultimate loss than they ever realized.

Fortunately for the employees, and San Francisco, an agreement was reached after two weeks. The two sides essentially split the difference in pay increases sought and the unions agreed to reductions in truck driver positions through attrition.

The result was not so happy in 1992 in Pittsburgh. There, the major issue was the same as in San Francisco – how many truck drivers are needed to distribute the newspapers to carriers? The joint operating agency that published the Pittsburgh Press and the Pittsburgh Post-Gazette wanted to eliminate 450 of 600 drivers' jobs.

After a strike had shut down the papers for 28 weeks, E.W. Scripps Co., one of the joint agency's owners, gave up on Pittsburgh altogether and sold the Press to the Post-Gazette. The Post-Gazette then reached an agreement with the unions to cut 260 truck drivers over five years.

Predictably, the Post-Gazette then shut down the Press, since a newspaper company can make a lot more money publishing one newspaper rather than two. Thus were newspaper jobs lost and another newspaper voice silenced.

In 1991, the New York Daily News was nearly sunk by a 16-week strike that persuaded its owner, Tribune Co., to sell the paper to Robert Maxwell. (More accurately, Tribune paid Maxwell some $60 million to take over the Daily News and all its problems.) The strike did not kill the paper, but it was a close call.

What unions should be aware of, and apparently are not, is that a financially ailing newspaper or even a mildly prosperous one like the Pittsburgh Press may not survive the stress of a strike. The Daily News had lost money in most of the 10 years prior to the strike, and its owner was preparing to close the paper forever when Maxwell popped up.

Profitability data are not available in San Francisco, since both owners of the joint operating agency, Chronicle Publishing and Hearst, are private companies. My calculations are that the agency is at best only marginally profitable and probably lost money sometime during the recent recession.

The reason for the weak financial performance is clear: The agency is under a contract that requires it to publish the Examiner, even though its circulation is too low (112,051 weekdays compared with the Chronicle's 509,548) to attract enough advertising to pay its costs. Even so, the San Francisco agency will keep publishing the Examiner so long as the Examiner's owner, Hearst, insists on it – at least until 2005, when the joint agency contract expires.

ýany once believed a joint agency would have to keep publishing two newspapers regardless of the two owners' desires because of the concerns of the U.S. Justice Department's antitrust division, which oversees administration of joint agency contracts. (Sých agency contracts in effect are legal evasions of antitrust laws permitted by Congress to preserve two editorial voices in markets where one of the newspapers is in danger of failure.) But in recent years Justice has looked the other way when the weaker of the two papers is seriously undermining the agency's financial performance (see "Anything Goes," October 1993). That is at least part of the explanation for the closing of the weaker joint agency newspapers in St. Louis, Miami, Nashville, Shreveport and Tulsa.

Hearst has had a history of keeping money-losing newspapers alive, I suspect out of respect for journalism and family tradition. However, the company finally gave up on its ailing newspapers in Baltimore and Los Angeles, and a lengthy and costly strike in San Francisco might have been all it would have taken to end Hearst's dedication to keeping the Examiner alive.

In another scenario, with the outcome in Pittsburgh as a precedent, Hearst or Chronicle Publishing might have bought out the other 50 percent of the San Francisco agency and cut back to one newspaper. Either way, newspaper jobs and a newspaper voice would have been lost.

Of course either of these two scenarios could still come to pass, but by settling early the unions at least spared themselves the likelihood of it happening right away. l