Newspaper Company Mandates Unpaid Furlough

Gannett Co., publisher of USA Today and hundreds of other newspapers across the country, is taking steps to ensure the continued existence of its media company.

According to reports, including industry magazine Editor and Publisher, Gannett has “ordered a company-wide, unpaid furlough” in an attempt to save money, which was announced last week.

The newspaper industry is beleaguered with rising paper costs and declining advertising and subscriber revenues, much of which is attributed to the proliferation of news Web sites and sales sites such as classified juggernaut Craig’s List.

Recently a couple newspaper companies, such as the Tribune Company, have filed for Chapter 11 bankruptcy protection.

Gannett’s move, though seemingly bizarre, could keep the company out of the proverbial poorhouse.

According to the Reflections Of A Newsosaur blog, which is operated by San Francisco’s Alan D. Mutter (who is a former Chicago Sun-Times city editor and current managing partner of new media venture company Tapit Partners), Gannett could save more than 500 jobs.

“Assuming Gannett’s payroll is equal to 20 percent of its $7 billion in revenues in the last 12 months, then one week’s payroll is worth about $27 million,” Mutter wrote. “If the salary of the average employee is $45,000 per year, then the company would have to eliminate some 600 jobs to achieve the same level of savings as the furlough.”

The calculations are based upon Mutter’s knowledge of the industry as a whole it seems because there is no mention in the article that he knows exactly what the weekly payroll is worth, and his figuring may or may not account for unionized workers, who would clearly have more bargaining power in regards to accept the furlough plan or not.

According to Editor and Publisher’s Joe Strupp, Gannett has 31,000 U.S. employees, of which only 12 percent are unionized. Strupp has reported that union leaders are not opposed to the idea and view it as “a creative solution.”

This might be a viable option for Gannett.

It will clearly save the company some serious cash, and the verbiage being used seems to indicate that jobs will still exist after the employees return from their individual furloughs.

The world of large newspaper companies is in dire need of a new game plan that will help them continue to do the good work of journalism without being forced to lock the doors and shut off the presses for good due to a lack of operating funds.

A lack of newspaper and journalism that goes into them would be steps backward for the country and the ability of journalists to act as watchdogs against abuses of power and corruption in government.

The First Amendment is a part of the U.S. Constitution for a reason, but that doesn’t mean government intervention is needed in order to save the industry.

Unlike the auto industry, journalism is based upon a lack of government interference or involvement, which is why creative solutions such as what Gannett is proposing are so vital.

Furloughs aren’t the only solution, though it is a good first step.

Other ways to monetize products that support journalism need to be found.

The person that figures out a superior solution will be received by the industry with open arms.

I know journalism will never die, but it could be hurt if a new business model is not developed in a timely fashion.

I would love to be one of the people that develops a new, creative business plan that saves the big boys of the media world, especially since I am a weekly newspaper editor.

Wouldn’t that be sweet?

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