The Boston Globe's Business Realities Should be Totten's Focus

The Newspaper Guild president is not serving his members well
What anyone should know before commenting on this issue

by Lou Phelps

Dan Totten, Boston Newspaper Guild president at The Boston Globe, is not serving his members well. His letter to New York Times Co. chairman Arthur Sulzberger Jr. this week should serve to demonstrate to the newspaper's readers that this particular union's leadership is unwilling to publicly acknowledge the core issues of the business model of The Boston Globe, and the changing newspaper industry that The New York Times company must face.

New York Times Co. is publicly traded. Anyone can read the company's financial data.

The New York Times Co. is publicly traded. Anyone can read the company's financial data at www.sec.gov. Large companies operate with certain levels of borrowing. The New York Times Company is carrying $760 million in long-term debt, which is frankly not high compared to the debt of many other news companies.

Those loans require maintaining cash-to-debt ratios, and those ratios are getting tougher to adhere to. If you have $760 million in long-term debt, the banks want ratios today of 8 to 1, or even better. That would mean that The New York Times Co. must make $95 million in profit. Instead, it lost money in the first quarter of 2009.

In better times, banks were allowing newspaper companies to operate with 10 to 1 or even 11 to 1 cash-to-debt ratios, but those days are gone. And, running at low cash-to-debt ratios causes banks to increase interest rates on those loans...chewing up cash that could be used to pay for reporters.

Totten's Guild needs to stop its knee-jerk rhetoric about jobs and acknowledge that technology has provided a change in the required number of reporters needed.

More importantly, Totten's Guild needs to stop its knee-jerk rhetoric about jobs and acknowledge that technology has provided a change in the required number of reporters needed, and embrace the opportunities of "e-Journalism."

I define "e-Journalism" as the facilitation of access to our news sources we now have - the opportunities afforded us in the newsroom of hyper-connectivity through e-mail, cell phones and Blackberrys - to reach our news sources in record time.

No longer are we wandering through City Hall hoping to find a city councilor for a quote, or trying to catch a news source in the parking lot. Congressmen and their staffs are texting us their thoughts after a controversial vote from their Blackberrys, still sitting in the session. All good journalists have the cell phone numbers of all their sources. We're gathering news at record speeds. A reporter can produce more stories per week than in the past.

Additionally, news is pushed out to us 24 hours a day by local police departments, school administrations, municipalities and the public, all of whom are feeding us news tips in unprecedented fashion. We're overwhelmed by incoming news, and the online news sources are literally endless.

The Web allows a journalist to do background research on a topic or individual before they even talk to the interviewee, dramatically cutting down the news-gathering process and actually enhancing our ability to write better stories.

These are facts. And those facts mean that a daily newspaper can do a great job with less reporters.

For the Guild to ignore these realities and suggest that its members should not alter their pay scales as part of the new landscape of our industry, serves no one.

Newspaper editors who are embracing these opportunities through training of seasoned journalists and positive attitudes in the newsroom will help their companies survive. Those seasoned journalists, such as in the newsroom of The Boston Globe, are critical; they bring context about their communities and critical news sources to the reporting process. Hand-wringing about how management doesn't understand or care about quality journalism, achieves nothing.

Advertising and revenue models for our industry are changing. The New York Times Company's total revenues were down 28.9% in the first quarter 2009 versus in the same period of 2008. The NYT's or Boston Globe's advertising staffs are not failing to do their jobs; rather, technology is allowing national, regional and local businesses to have their own web sites and use various outbound e-marketing techniques to reach customers - and they have less need for print advertising. There is less advertising revenue coming in.

For the Guild to ignore these realities and suggest that its members should not alter their pay scales as part of the new landscape of our industry, serves no one.

Never has there been a more heightened level of news readership by the public, even by the youngest readers. Our industry has only to evolve our staffs to embrace and get excited about providing combined print, online and mobile delivery systems of the news.

And if a staff member won't evolve... they need to get out of the boat... so it can continue to float.

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