Sunday, 16 June 2024

Media company announces employee benefit cuts

LAKEPORT – The parent company of the Lake County Record-Bee gave employees some not-very-happy holiday news this week, telling them that the company is cutting its matching contributions to the 401(k) retirement plan.


The Denver-based MediaNews Group, which has owned the Record-Bee since 2001, made the announcement in a letter sent to employees' homes last week as well as a memorandum distributed on Monday.


The news comes as employees in Lakeport and around the company await a round of layoffs slated to happen any day, according to sources who have asked not to be identified due to fear of retribution.


Lake County News obtained a copy of the memo, sent Monday by Jim Janiga, senior vice president of human resources for MediaNews Group's California Newspaper Partnership, in which he informs employees that the company's matching contribution to the 401(k) plan will be suspended Jan. 1, 2009, “for an indefinite period of time.”


Janiga added that the suspension will run through all of 2009 but “could possibly be reinstated beginning in 2010.”


“The decision to suspend the matching contribution was not made lightly,” Janiga wrote. “This is an expense reduction needed to help offset still declining revenues, a trend we are all too familiar with and which continues to impact the newspaper industry and most all private and public sectors throughout our local, state and national economies.”


A summary annual report on MediaNews Group's retirement and savings plan, obtained by Lake County News, notes that 11,880 people were participants or plan beneficiaries as of Dec. 31, 2007.


The value of the plan's assets, after liabilities, was $238,414,653 on Dec. 31, 2007, up from $208,963,645 on Jan. 1, 2007, the report noted.


For the period of Jan. 1, 2007, through Dec. 31, 2007, the plan had total income of $51.5 million, which included MediaNews Group's $5.8 million in contributions, $21.1 million from employees, $4.6 million in other contributions and $19.9 million in investment earnings.


Earlier this month, William Dean Singleton, MediaNews' chief executive officer and its principal owner, asked unions at the Denver Post, another of his 53 daily newspapers, as well as the Denver Newspaper Agency to reopen labor contracts.


Singleton said he needed to cut $20 million in expenses immediately, according to a Rocky Mountain News report.


That request, made to the unions on Dec. 12, came a day after Moody's Investors Services downgraded nearly all of the company's $1 billion in debt further into junk status, reaching a non-investment grade rating of “Caa3,” which according to an Associated Press report is the third-lowest rating on Moody's scale.


Moody had previously downgraded MediaNews' debt in May. Three months later, the company sold its Connecticut newspaper holdings, including the Connecticut Post and seven non-daily newspapers, to Hearst Corp.


The rating downgrades are based on Moody's lowered opinion of the company's ability to meet its financial obligations after a 16-percent decline in revenue for the third quarter, and concerns over a revolving $175 million credit facility that comes due in December 2009, according to the Associated Press.


The Associated Press noted that the downgrade also has the impact of making it harder for MediaNews to find new financing because of default concerns.


In press reports Singleton has steadfastly maintained his company is financially sound and honoring its financial commitments.


The Record-Bee traditionally has been among MediaNews' strongest performers, outpacing advertising revenues of its larger, urban sister papers.


However, despite its stronger performance, the paper and its staff are facing cuts in staffing, which continues a trend in employee reductions at the newspaper.


Since 2001 the editorial staff of the Record-Bee and Clear Lake Observer-American combined has been reduced from 12 employees to eight, with at least another position on the line in the upcoming layoffs. Of those staff reductions, two have been reporter positions.


Those cuts in editorial are in addition to numerous other layoffs experienced throughout the paper's departments, including composing, press and accounting.


E-mail Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it..


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