Boston Globe deal averts shutdown

Boston Globe deal averts shutdown
By Kenneth Li in New York
Copyright The Financial Times Limited 2009
Published: May 6 2009 13:44 | Last updated: May 6 2009 13:44
http://www.ft.com/cms/s/0/3c6ef30e-3a39-11de-8a2d-00144feabdc0.html


The Boston Globe reached a tentative deal with the largest of its labour unions early on Wednesday, averting the shutdown of the New York Times-owned newspaper.

Details of the agreement, which will be disclosed to the 600-member newspaper guild on Thursday, were not furnished, the Globe said in a statement. The Times had demanded $10m in cuts from the guild (union) and $20m overall, and the relaxing of lifetime employment agreements with 190 of its members.

The agreement ends a tense stand-off with the last remaining hold-out and comes as the New York Times races to improve its liquidity, a process that over the past few months has included securing a high-interest loan from Carlos Slim, the Mexican billionaire.

The Times also confirmed a report in the Financial Times that it plans to raise the newsstand price of its flagship paper. The weekday price will rise to $2.00 from $1.50. The Sunday edition will rise to $6 from $5 nationwide and to $5 from $4 in the New York metropolitan region. Industry observers estimate the Times could generate about $40m from the price hike.

According to a report on the Boston Globe’s website, the Times had demanded a 23 per cent reduction in wages and expected a large reduction in jobs.

Fears of a shutdown of one of America’s most prestigious newspapers inspired local legislators to begin discussing how to preserve the nation’s journalistic businesses.

On Wednesday, Senator John Kerry of Massachusetts is convening a Senate subcommittee hearing to discuss the future of journalism.

Marissa Mayer, a Google vice-president, James Moroney, chief executive of the Dallas Morning News, and Arianna Huffington, co-founder of the Huffington Post blog, are expected to speak.

Arthur Sulzberger Jr, chairman and publisher of the New York Times, is not expected to attend. Instead, Mr Sulzberger is scheduled to appear on stage on Wednesday morning at an Amazon.com press conference to launch what is expected to be a larger version of the Kindle, an e-book reader designed to target text book and news consumers.