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Sun-Times Media Group Asks Unions for 7 Percent Pay Cuts

The company, which operates the Chicago Sun-Times and dozens of suburban papers, tells union representatives that it needs the concessions to meet its goal of trimming $50 million from expenses this year.

January 9, 2009
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Sun-Times Media Group Inc., facing mounting losses at its newspapers as ad revenue plummets, asked union-represented employees Wednesday, January 7, to take a 7 percent cut in compensation to help keep the company afloat.

The company, which operates the Chicago Sun-Times and dozens of suburban papers, told union representatives that it needs the concessions to meet its goal of trimming $50 million from expenses this year, according to a memo sent to Newspaper Guild members. About 41 percent of the company’s 2,300 employees are covered by unions.

“It is important to note that none of the unions committed to anything at this meeting,” union representatives wrote to their members in a memo posted on Jim Romenesko’s Poynter Institute blog. “The union reps in attendance rightfully wanted to meet with their members to get their feedback about management’s request.”

The company pared $50 million in expenses last year primarily through job cuts and outsourcing. The latest bid is the first indication of how the company plans to complete its second round of expense reductions.

Compensation cuts could include anything from wage reductions to unpaid leave. A Sun-Times spokeswoman didn’t immediately respond to a request for comment.

Sun-Times spent $72 million—its biggest cash expense—on wages and compensation in the first nine months of last year.

Separately, the company’s board of directors sent a letter Wednesday urging investors to reject a bid by a leading shareholder to replace all but one of the board’s members.

“Your board of directors has set for management an ambitious and concrete plan to reduce costs by more than $50 million with the overarching objective of achieving cash flow neutrality in the next 12 to 24 months,” the letter said. By contrast, it said, the shareholder, Davidson Kempner, “continues to offer no concrete proposals for addressing the challenges facing the company.”

A Davidson Kempner spokesman has said that it wants to leave such plans up to its proposed new slate of directors.

Filed by Ann Saphir of Crain’s Chicago Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Workforce Management’s online news feed is now available via Twitter.

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