Local TV Is No Longer A Cash Cow

Nationwide, newsrooms are facing cutbacks

By David Zurawik and Chris Kaltenbach |Baltimore Sun reporters

For decades, local TV stations in cities like Baltimore were cash cows for the companies that owned them. Even though one or two stations with the most popular anchors often came to dominate each market, everybody made money. Local TV was that surefire a business - even for last-place and poorly managed stations.

But not today.

More and more, the dominant story line for local TV news is one filled with talk of cutbacks, layoffs, lowered expectations and an urgent need to find new ways of doing business and winning viewers. This week, CBS announced a series of layoffs at its stations in cities across the country, including Baltimore. And last month, the local ABC affiliate, WMAR, laid off two producers and fired anchor Brian Wood.

"I don't think we can sit here comfortably anymore and rely on the fact that we've been here for years," says Mary Beth Marsden, anchor at WMAR, Channel 2. "How do we stay relevant, that's the question. How do we stay the providers of information that people choose to go to? I think we're still trying to figure it out."

As part of CBS' nationwide cuts, 14 newsroom employees were fired this week at San Francisco's KPIX, Channel 5, including four on-air reporters. In Boston, staff cuts at WBZ, Channel 4, were expected to reduce the station's 220-person work force by about 10 percent. At Chicago's WBBM, Channel 2, at least 18 employees found themselves without a job Monday, including the station's lead anchor, lead sportscaster and two more on-air personalities.

The toll was lighter in Baltimore, but the station still let go at least four employees. And some employees at WJZ worry more cuts may be coming. "You don't know what they're going to do," said one station employee, who did not want to be named for fear of being fired. "There are a lot of people there who don't have contracts." And the drastic downsizing isn't limited to stations owned by CBS. Other media companies such as ABC and NBC also are seeing ad revenue decline.

"There is no doubt about it, local TV stations are facing harder times, and what you're seeing with the cutbacks and layoffs are media companies reacting to new economic realities," says Douglas Gomery, media economist at the University of Maryland. One reality involves the downturn in the general economy, with companies across the board looking to cut costs. The stations have been particularly hard hit as struggling car manufacturers and dealers have curtailed their advertising spending. Automotive TV advertising fell to $7.6 billion in 2007, a drop of 8.3 percent from the year before, according to research firm TNS Media Intelligence.

The decline has been even steeper in the first three months of 2008, according to analysts. "Car advertising accounts for about 10 percent of TV revenue," said Bob Papper, media studies professor at Hofstra University and author of the Radio and Television News Directors/Hofstra annual survey of local TV stations. "So, these cuts that you are seeing at stations across the country are in part a reaction to a drop in that revenue." And if the downturn continues, so could the layoffs, Papper said. "NBC laid off at its local stations in December, and CBS is doing it now," Papper says. I think it's reasonable to think ABC might be doing it next - spreading out across its stations." But there are also "media-specific forces" driving the layoffs, Gomery said. "With a fragmenting of the audience and new strategies to reach customers in new online media, local TV is no longer as automatic a buy." "More of the focus in general is toward the Internet, and so more of the money is moving that way," says Abe Novick, an advertising agency executive at Euro RSCG, a global advertising agency based in New York. "And that's why the local TV news industry - as well as the newspaper business - is going through these convulsions of cutbacks and layoffs."

WJZ Vice President and General Manager Jay Newman, who has spent a decade as head of the station, acknowledges the challenges faced by local newsrooms. But he insists they can be surmounted. The key, he says, is abandoning traditional concepts of what a local news operation entails and who watches it. Instead of concentrating on two or three daily news shows, he notes, Channel 13 now broadcasts news six hours a day, stretching from 5 a.m. to 11:35 p.m. The station also updates its Web site regularly and has an agreement to share content and personnel with The Baltimore Examiner.

WMAR has a similar agreement with The Sun. "Years ago, people gathered around the TV set at 6 o'clock and watched and ate dinner together," he says. "Now, people have different expectations. ... What we need to do is to reach people more often, at more times throughout the day, both on TV and through multiple platforms." There are no job cuts planned for now at WBAL, Channel 11, says station President and General Manager Jordan Wertlieb. "It's a competitive business," he says. "We've gone though difficult economic times before. I think we're optimistic that we've seen the worst." Like his counterpart at WJZ, Wertlieb says the challenge is to adapt the station's news product to the changing marketplace. And the big change, he says, is in the number of different places people can go to find the news - and in the number of places advertisers can spend their money. "Television viewership was up in 2007 to more than four hours a day for American adults," Wertlieb says. "It's at record levels. ... Now you're in a pool where you have to compete for audience, so you have to provide compelling content. You're not splitting the [revenue] pie among three channels, you're splitting the pie among 100."

While Papper says he knows layoffs at stations lead to headlines, he begs for a bit of context as to how "dire" things are - or are not - for the local TV news business. "When I worked at a TV station in Minneapolis, I remember the general manager telling me that the owner demanded a profit margin of 45 percent," he says. "I guess if you are used to making a 45 percent profit and now you're only making 20 or 30, it feels like you're in the poorhouse. But in some businesses that would still be pretty good." chris.kaltenbach@baltsun.com david.zurawik@baltsun.com

Canada's Media Workers Struggle Too....

Sure, SONG ( Southern Ontario Newspaper Guild) can protect jobs, get better benefits and unionize The Toronto Sun. But can it protect editorial integrity? Only sometimes

It's not that I am anti-union, it's that I'm anti-union for newspaper writers," wrote columnist Christie Blatchford in 1991, while praising her employer, The Toronto Sun, on its 20th anniversary.

"This is one of the greatest jobs in the world. I do not need a union to tell me I should be demanding time-and-a-half while I am seeing something interesting, staying in a hotel and eating at company expense."

Given that the Sun avoided a union for 30 years, she was undoubtedly speaking for most of the paper's employees. And why not? The Sun's parties were legendary, good reporting was celebrated and the three founding fathers of "the little paper that grew," Doug Creighton, Peter Worthington and Don Hunt, took great pains to ensure they had smiling employees. As Worthington wrote in a column shortly after Creighton's death earlier this year, "Doug's door was always open, and he and I (and Don) were adamant that we give a union no reason to appeal to the staff."

But things, including management and ownership, change. In 1998, rival Torstar hoped to absorb Sun Media. Sun management found a savior in Quebecor, which ended up buying the company for $983 million. What Sun staff didn't realize was the Montreal-based media company would end up using the paper's $40 million annual profit to service the debt racked up by Videotron, Quebecor's cable business.

Soon the rescuers demanded more. With little concern for the editorial quality of its cash cow, Quebecor squeezed harder, forcing management to cut employee perks and layoff staff for the first time in years. Morale plummeted. "People I had a great deal of respect for and who helped build the Sun were out in the street," says city desk editor Brad Honeywill. "I found that offensive."

He wasn't alone. Today a front page with a headline screaming "Black Monday" above pictures of fired employees still hangs on the wall of Betty's, a popular reporter's hangout down the street from the Sun building. Disheartened survivors created the mock-up after 86 employees lost their jobs on May 14, 2001.

It's a reminder that what the Sun once was - a warm, friendly and fun place to work - had become a dismal place where staffers feared for their jobs. That fear - coupled with cuts to profit sharing, Christmas bonuses and the popular sabbatical program that let employees take two months off after 10 years of service - allowed Sun staff to finally run a successful union drive.

There had been two unsuccessful attempts in the 1990s to unionize circulation staff, the press room and the mail room, but life at the paper was so enjoyable few employees had any interest. Honeywill, for example, had no desire to join a union back then, but with an unpredictable management in charge, he wanted some protection. Jobs and perks were not the only things in peril; editorial content also suffered. The travel section, for example, lost its editor and two writers. And entertainment columnist Jim Slotek, for one, worried that Quebecor would just run the Sun into the ground.

"If you really have a low regard for the product then there's no limit to how low you can go with it. There is no limit to the number of papers in this country that have gone to the lowest, cheapest denominator. That being wire copy, wire photos, unpaid interns." As the atmosphere went from sunny to toxic, people told each other on the days of the layoffs: "Don't answer your phone; you could be next." To some, unions mean raised placards and gruff, beefy men cheering a teamster on a makeshift stage in a low-lit factory. The only journalists in the picture are the ones pushing through the crowd to cover the story. But when it comes to organized labor, journalists have more at stake than a good lead.

Concerns over media integrity are increasing - first, family-owned papers were bought out by corporations; and now small chains are being absorbed by bigger companies who push for greater returns. This has union leaders and media critics worried that quality journalism is being sacrificed for profit.

"This is an important concept to many of us," says Gail Lem, former president of the Southern Ontario Newspaper Guild (SONG). And while it is hard to write clauses emphasizing editorial integrity into the confining language of a contract, newspaper unions want to protect not only their members, but also the quality of their papers. SONG is the largest media local in Canada and the first to organize journalists (the press and composing rooms were already unionized). Now officially known as Communications, Energy & Paper workers Union, Local 87-M , SONG represents 26 publications, including The London Free Press, The Toronto Star and Maclean's.

Creating a Canadian union was a tough battle. In the 1930s, journalists faced low wages, hectic schedules and random firings, so budding unionists looked to the American Newspaper Guild, founded by New York columnist Heywood Broun in 1933, for inspiration. But management's intimidation tactics, including the demotion of known union supporters, quashed the first attempt by the Guild to unionize.

In 1948, however, the Guild garnered the support of a majority at the Star, received certification from the Ontario Labor Relations Board and quickly gained a reputation as a tough, feisty local that won higher wages and greater job security for its members. In the mid-1980s, the union began to fight for editorial integrity because the firewall separating editorial from advertising was crumbling. It was the heyday of business-sponsored ads thinly disguised as stories. (Today, union contracts typically require such advertorials to use a different font or be clearly labeled as advertising.)

At the same time, newspapers were shifting from institutions with influence on social, political and economic policy to simple moneymakers. In fact, A. Roy Megarry, then publisher of The Globe and Mail, openly admitted that the role of a paper was to sell advertising; editorial content was secondary. For Martin Mittelstaedt, defending editorial integrity and protecting people's jobs are closely linked. The current SONG president divides his time between the union's cluttered office in the east side of downtown Toronto and the Globe, on the west side, as a reporter. Mittelstaedt says having a job secured by a union contract means journalists can stand up to an editor or publisher.

"There have been cases where companies have gone after people who have spoken out in a forthright way about the need for workplace improvements," he says. "They view it as disloyalty that needs to be punished."

Richard Leitner was certainly glad to have a union behind him in 1999 after being involved in particularly nasty contract negotiations. Leitner, a news reporter and union representative, learned he was leaving The Stoney Creek News for a split beat position at the Brabant Group's two smallest papers, The Dundas Star News and The Ancaster News. Leitner and other union officials believe he was being punished for his union work. In an unusual grievance settlement, Leitner got a month's paid "sabbatical," during which he could work on any story he wanted. The result was an investigation into Hamilton's sewage treatment that won four awards.

Although he admits the language of union contracts can't directly address editorial quality, Leitner says it is possible to use a contract creatively. Reporters at the Free Press got creative in 1990, when the union produced a strike paper. Staff felt the paper's editorial quality was suffering after its owner, the Blackburn Group, had been placed under trusteeship. Out went the substantive and in-depth reporting; in came what Joe Matyas, Free Press news reporter and SONG treasurer, called a "McPaper" approach to journalism. Editors restricted stories to 10 inches in length and the traditional big story on the front page gave way to an index of headlines and small snippets of information that directed readers inside. The idea was to offer the news in bite-sized pieces for busy people on the run.

On November 9, 1990, striking employees, angered by the editorial changes as well as low wages, put out a free paper called The Express and distributed it about 60,000 households in London. The Express had longer stories and more features with a narrative style. It was supposed to remind readers of the quality of reporting they were missing. And it did: readers called to find how to get the next issue. Today the front page of the Free Press is more like the original. Despite that success, sometimes the only way journalists can protect editorial content is to take their names off it. "When reporters withdraw bylines, it does send a message to the community that something is different here, something is amiss," says Rob Reid, entertainment reporter at the unionized Record in Kitchener-Waterloo. Byline removal is an effective tool against the company if an impasse has been reached during negotiations or if a strike or lockout deadline is approaching.

Some publishers question a journalist's right to remove bylines and that has observers worried. "That's one of the very few weapons that a journalist has to protest something publicly," says Catherine McKercher, associate professor at Carleton University's School of Journalism. "When an employer says, 'No, you can't do that, you don't have the right,' that is a big deal." Journalists at the Montreal Gazette discovered just how big a deal in 2001 when they collectively removed their bylines to protest CanWest Global Communications Corp.'s national editorial policy.

The editorials, written at the Winnipeg head office, ran in all 12 major CanWest papers across the country. After the second day of no bylines, Gazette management ordered them back on the page, allegedly threatening disciplinary action against those not complying - which the company denied during the hearings. The Montreal Newspaper Guild grieved the decision, and Gazette staff protested the national editorial policy in January with an open letter signed by 77 journalists and printed in the Globe, the Star and La Presse.

"We believe this centralizing process will weaken the credibility of every Southam paper," it read. "Credibility is the most precious asset a newspaper possesses. When the power of the press is abused, that credibility dies." In response, the company forbade newsroom staff from talking publicly about the issue. "They put this gag order on us because they think that in speaking out we're hurting the product, that we have to stay loyal to the employer," a Gazette reporter says. "Our stance is that our loyalty is to the readers - that's who we have to serve. It's not like we're working in a factory making widgets. There is a public trust there." When the case went to arbitration, Minko Michael Sotiron, who teaches journalism at Concordia University and John Abbott College, testified on behalf of the union.

"The byline is a reflection of the reporter's personality and belongs to him as surely as the color of his eyes and other personal features," he argued. "It follows that what he does with his name is his business."

Arbitrator Jean-Pierre Lussier decided that withholding bylines did not violate the Gazette's collective agreement and declared that the journalists "have the right to withhold their byline as they see fit." Although CanWest never officially stopped the national editorials, the practice petered out in 2002, something Gazette employees see as a victory. And a recent settlement between the Montreal Newspaper Guild and the Gazette means reporters can now speak out against the company and not worry about the consequences.

Meanwhile, SONG's Howard Law watched the Gazette ruling with great interest because the Star filed a grievance after reporters pulled their bylines in solidarity with The Guelph Mercury employees involved in eleventh- hour negotiations. Law says the contract language concerning bylines is similar to the Gazette's.

"If the arbitrator in our case follows the example of the Montreal Gazette," says Law, "we'll win it. That will uphold journalists' right to protest practices they feel are unfair or damaging to the integrity of a paper." Circumstances changed at the Sun after Quebecor bought the paper. And that meant the people had to adapt to the idea of union. Starting in small groups, Sun staffers, including Slotek and Honeywill, met with Howard Law, local SONG representative, over breakfast in surreptitious meetings at local greasy spoons.

By late November 2002, 13 people were ready to put their jobs on the line. They needn't have worried, though, because within 24 hours half the newsroom had signed cards, and in January, 71 per cent of the editorial staff voted to join SONG. Contract negotiations started that May, and the two sides are still thrashing it out.

The issues on the bargaining table include the usual labor issues, such as job security and wages, but also the practice of journalists writing promo copy for the paper, something the union argues is a conflict of interest and damages the paper's editorial integrity. "Being non-union worked for the Sun because it was a mutually beneficial relationship. People came in who didn't share that philosophy, so we had to change ours," says Slotek. "It's not a war, it's just a reaction."


Actors Guild Faces Drama In Its Ranks

By PETER SANDERS
THE WALL STREET JOURNAL
April 3, 2008; Page B1

As the Screen Actors Guild gets set to begin contract negotiations with the major Hollywood studios -- and tries to avert a crippling strike like the recent walkout by writers -- the union first must address some strife within its own ranks. Hollywood's largest creative guild said late Tuesday it plans to begin labor negotiations with the major movie studios and television networks April 15, more than two months before its contract expires June 30.

Some actors want to prevent those who work less frequently from voting on the contract. Also, a group of high-profile actors, including Tom Hanks and George Clooney, lent their names to ads in Hollywood trade papers after the writers' strike ended in February, imploring the SAG's leadership to begin negotiating as soon as possible.

On top of that, the guild has also recently squabbled with the American Federation of Television and Radio Artists (AFTRA), another union of actors that is launching contract talks at about the same time. Guild President Alan Rosenberg says the internal disputes come "out of fear and strike weariness" after a walkout by the Writers Guild of America -- waged largely over how screenwriters are to be paid for use of their work on the Internet -- shuttered production for about 100 days in late 2007 and early 2008.

Worried that a divided union will lack bargaining power, he is seeking to damp the issues before talks begin. Even SAG's leadership acknowledges that those divisions might now undercut the actors' leverage as they enter talks. The actors' guild is expected to seek a sweeter deal than the three-year pacts reached by writers and directors, with increases for compensation from work used on the Internet and via other new media, as well as an increased share of DVD revenue, a proposal the WGA yielded on fairly quickly. The intramural fights highlight a difficult issue that all of the Hollywood creative unions face: Their ranks include a wide range of economic interests that aren't always aligned when it comes time to negotiate a new contract.

The Screen Actors Guild, for example, includes a relatively small number of actors who work regularly and cash big checks. But many of the guild's members are out of work for long periods, and may not have landed a TV or movie gig for years. The scrape between the haves and have nots is at the heart of the loudest issue SAG has faced in recent months: an effort by some members to change the rules governing who gets to vote on new contracts.

Currently, all of the roughly 120,000 members of the guild are eligible to vote on proposed labor contracts. But a core group of actors who work regularly feel they should have the say in what contract terms to accept or reject. They are proposing a so-called qualified voting structure that would take into account the amount of work a member completes during a contract period.

"This is categorically a movement of working actors to try to strengthen their union by putting control of contract decisions in the hands of those directly impacted by those voting outcomes," says Ned Vaughn, a longtime television and film actor who recently appeared in the TV drama "Cane" and is one of the two actors spearheading the "qualified voting" effort. So far, Mr. Vaughn and fellow member Amy Brenneman ("Judging Amy") have gathered more than 1,400 signatures in favor of the change, including some of the biggest names in show business.

But while A-listers like Glenn Close, Meryl Streep and Kevin Bacon have signed on with hundreds of other "working actors," SAG's leadership isn't in favor of a change. The move to change the voting and membership structure of the union is one that has cropped up a number of times over the years and hasn't yet succeeded.

Mr. Rosenberg met with Mr. Vaughn and Ms. Brenneman on Feb. 20 and agreed to take the issue to SAG's 71-member national board when it meets in Los Angeles on April 12. But he is certain the issue will go nowhere with the board. "Our board and our members will never vote for this and I wish we weren't discussing it in any major way," says Mr. Rosenberg. "To make this such a public issue at this time is meant to do nothing but weaken us." Mr. Rosenberg added that stripping contract voting rights from thousands of SAG members would "weaken us in negotiations" with the studios "in a major way."

Mr. Rosenberg is backed by some working members who feel that the proposed changes are undemocratic. One of them is Ron Livingston, who played the lead in the movie "Office Space" and was a character on the TV show "Sex in the City." "It's not a collective agreement unless you agree to it collectively," says Mr. Livingston. "The strength of the union is not just the actor working the job, it's the other nine actors next to him who say, 'We'd love that job, too, but we're not going to take it unless you pay him what he's worth.'"

While the Screen Actors Guild members squabble among themselves, they are also in a dispute with another union of actors that is also entering contract negotiations with the studios. Over the weekend, SAG split with the smaller AFTRA, which has for 30 years jointly negotiated labor contracts with SAG. While SAG represents most actors working in movies, television and commercials, AFTRA has members in soap operas, news programming and other areas.

The two unions had been at odds for the past few months and had only recently decided to again present joint contract proposals to the studios. Their parting of ways put pressure on SAG to begin negotiations with the studios, lest the smaller union get there first. It is believed that SAG and AFTRA will present similar contract proposals. Since AFTRA has fewer television shows affected by the new contract, the worry was that they would make a deal with the studios that could possibly be disadvantageous to SAG, which has a much larger stable of affected members. AFTRA said Wednesday it would begin its own negotiations with the studios on April 28 and noted that 44,000 SAG members also hold membership in its union.

For SAG, the challenge lies in negotiating a deal in the wake of negotiations between the WGA and the Directors Guild of America. The directors negotiated the first new three-year contract in the midst of the writers' strike in January. That deal served as a template for the eventual contract reached by the writers and the Alliance of Motion Picture and Television Producers the next month. Write to Peter Sanders at peter.sanders@wsj.com