Tuesday, August 19, 2008

Who's repping for you?

The question above is one that all current Orlando Sentinel staffers already know the answer to and that answer is: no one. During the recent cutbacks the people who compose Orlando's only daily paper have been trying to dodge bullets left and right. Nobody has made any negotiations on their behalf, suggesting that maybe cutting out this or that will be severely detrimental to the staff. 

For the former Sentinels this is a problem of the past, but the people still there are reeling with the feeling that their days are numbered and there's nothing they can do about it. I imagine this feeling does not help workplace morale. But more importantly, when the interests of the current Sentinel staffers are disregarded there exists no chance that they may salvage components of the paper that readers appreciate. So, staffers without representation among company decision makers is a problem for both the reader and the worker.

But, how does this problem become resolved? The first step is showing that there is a large demand for representation. The petition over at Tell Zell is a good start, but it doesn't really work for Sentinel staffers fearing the repercussions of adding their signatures. There is an anonymous option, but I've heard there have been threats from management to start tracking what sites employees are visiting. Even those who are no longer Sentinel staffers sometimes cannot contribute to petitions because of problems it might cause for their future or current employers. All these factors make it a little difficult for a large demand to be shown by petition.

So, this idea was suggested to me by a Sentinel staffer: make a poll with no strings attached (no names, no IDs, no IP's)... asking people if Sentinel staffers deserve a say in how their paper is run. Hopefully, a such a poll would be able to show about how many people would love to (but aren't able to) cosign on the Tell Zell petition. 

That poll is now open to the right of this post. Add your vote, if you cannot add your name.


Anonymous said...

Here's the reality: It's a private business. The owner (Zell) has the final say. If the employees don't like it, they are free to leave.

That "You're are the owners now" is a bunch of hokkum. It doesn't matter what the employees want or think. What matters is the bottom line to people like Zell.

I'm no fan of Zell or what's happened to The Sentinel. But nothing will change until the ownership of The Sentinel changes.

Anonymous said...


Scroll down for details on Zell lawsuit
12:44 PM Tuesday

A few minutes ago I added the names of the Los Angeles Times columnist and former reporters who sued Sam Zell in federal court today, alleging he messed with the employees' stock plan. Here's the link.

Here's a wrinkle: Many of the Times staffers who were laid off in July have to decide this week whether to sign the waiver promising not to sue the company. I've already heard from a few who say it's a personal conundrum: sign the waiver and get the severance package, or refuse to sign and possibly lose the money.


Ex-Times reporters sue Zell *
Kevin Roderick • Bio • Email

I'm told that lawyers representing current and former Los Angeles Times newsroom staffers are filing a class-action federal lawsuit against Sam Zell and Tribune this morning in Los Angeles, alleging breaches of fiduciary duty, conflicts of interest and other violations of ERISA, the law that safeguards the proper handling of retirement benefits like pensions and trusts. The plaintiffs include several familiar bylines and at least one current Times star. A team has been looking into Zell's leveraged takeover of Tribune almost since he used employee money to get the company. Details to come.

* Can now report: The suit has been formally filed and the plaintiffs include Dan Neil, the paper's Pulitzer-winning auto columnist; Jack Nelson, the much-honored retired Washington bureau chief; Henry Weinstein, the legal affairs writer who took a buyout to join the UC Irvine School of Law; Myron Levin, an investigative reporter who left recently; and Corie Brown, who most recently covered food and wine.

The gist, from the release:

...since completing his takeover of the Tribune Company in December 2007, Sam Zell’s illegal and irresponsible actions and public statements have damaged the reputation and business of the company he purports to want to preserve. According to the filed complaint, through both the structure of his takeover and his subsequent conduct, Zell and his accessories have diminished the value of the employee-owned company to benefit himself and his fellow board members. It alleges further that through their destructive management and self-dealings at the expense of employees, Zell and his co-fiduciaries have repeatedly breached their fiduciary duties to beneficiaries of the Tribune Employee Stock Ownership Plan (ESOP).

Release follows after the jump.

LOS ANGELES, Sept. 16, 2008 -- Today current and former employees of the Los Angeles Times and the Tribune Company filed a class-action lawsuit in federal court against Sam Zell, a Chicago billionaire real-estate speculator who in December 2007 took control of the Tribune Company in a controversial deal that has mired the company in more than $13 billion of debt. The lawsuit was filed by Joseph Cotchett and Philip Gregory of the law firm of Cotchett, Pitre & McCarthy.

As current and former members of the Employee Stock Option Plan that owns 100% of the Tribune Company and participants in various Tribune retirement plans, the plaintiffs filed this action alleging it is time to call the Zell-orchestrated acquisition what it really is: A scam. The lawsuit contends that, since the inception of the deal, it appears that Zell and his accessories have planned to enrich themselves, tax-free, by perverting laws passed by Congress intended to benefit rank and file American workers. The employee-owners of Tribune Company have everything, including their retirement plans, at great risk and little to gain in this deal, while Zell has everything to gain and little at risk. Among the deal's outrages outlined in the complaint: Zell has set up a mechanism to buy 40% of the company – valued at more than $8 billion at the time the ESOP took ownership – for as little as $500 million. It’s a classic grift, played out under the cover of legal technicalities. The real losers in this deal, however, are Americans who rely on news and information collected and disseminated by the respected Tribune news organizations.

The plaintiff-employees in this suit do not seek to enrich themselves. Rather, their announced intentions are: to protect Tribune Company’s pension and retirement funds; to give the employee-owners a place at the table with regard to management of their assets; and to remove Zell and his cronies from the Tribune Company’s board in order to save what is left of a still great news gathering operation.

In the 1970s and later in the 1980s when Senators Bob Dole (R-Kansas), Russell Long (D-Louisiana) and others in Congress spearheaded efforts to promote ESOPs with generous tax benefits, the intent was to empower employees eager to own and manage the companies where they work. When it comes to Tribune Company’s ESOP, nothing could be further from the truth. Employees were never asked if they wanted to own Tribune Company. They had no opportunity to question the wisdom of saddling a media company with $13 billion in debt at a time when the industry faces serious challenges. Even though they are nominally the owners, they have no voice on the company’s board and no say in its management.

When Zell hung “You own this place now” banners at the Los Angeles Times, employees could not know the high price they would pay for this “privilege.” According to the complaint, Zell has de-funded employees retirement packages, raided the employee pension fund for more than $400 million, and eliminated more than a thousand Tribune Co. jobs. Meanwhile, Zell and his band of publishing rookies are wrecking the company’s marquee properties – including the Los Angeles Times, the Baltimore Sun, and the Chicago Tribune – alienating readers by launching aimless redesigns while dramatically cutting coverage. Seemingly ignorant of journalistic ethics, they have, for instance, turned control of the Los Angeles Times Magazine over to the advertising staff, with no indication to the reader that this product is now a “pay-to-play” advertorial. All the while, revenues have continued to decline.

The saga of the Los Angeles Times follows a familiar path in American media. Los Angeles’ Chandler family controlled the newspaper for generations, making it the flagship of the powerful Times-Mirror Company. In 2000, the Chandler heirs merged the family-controlled company with the Chicago-based Tribune Company. Even considering the debt to finance the merger, the company maintained profit margins in excess of 20%.

Despite a slowing economy, a precipitous drop in ad revenue in the real estate, classified, and automotive sectors along with the de-monetizing of content put on the web and the spiraling cost of newsprint – the Tribune Company continued to be profitable throughout this decade. Without the staggering debt load from the Zell deal, the Los Angeles Times would be solidly profitable today – without eviscerating news gathering operations.

It is flat wrong to regard the Tribune Company's troubles as the death throes of the newspaper industry. Americans are not rejecting the industry’s editorial product. The Los Angeles Times has millions more readers than it did a few years ago – over 20 million discrete readers at latimes.com in August 2008. In that month alone, the paper chalked up more than 120 million page views. Its besieged editorial staff continues to produce some of America’s finest journalism.

The media landscape is changing and, yes, newspapers are just learning how to navigate this new world. Unfortunately, current management is making things worse, led by Zell and his Chicago gang who can't shoot straight. Zell does not consider himself a publisher and has shown nothing but contempt for journalism. He notoriously said “F… you” to an employee-photographer who dared question his leadership. Speaking to the Washington bureau of the Los Angeles Times, Zell referred to the staff as “overhead, not producing any revenue.” Zell’s history is specializing in profiting from the purchase and sale of distressed properties. He has said he expects to make a fortune for himself during his tenure at the Tribune Company. And, as it stands, he can do that while leaving the coffers of the Tribune ESOP empty and the readers of the Los Angeles Times, the Chicago Tribune and Tribune Company’s other news outlets without an authoritative local source for news and information.

Should these institutions, vitally important to the life of the nation – indeed, never more so – be allowed to fall victim to ruthless corporate raiding and the pump-and-dump machinations of predatory “investors”? News organizations are both businesses and public trusts. A free press is the only business stipulated by the Constitution. No other entity – no website, no blogger – is on the horizon to replace the boots on the ground around the world providing Americans with the information we need to function in a global economy. The Los Angeles Times, alone, spends $2 million a month to support its Baghdad bureau, making its war coverage among the finest in the world. If Zell and his cronies continue to cut the staffs of these news organizations, it means inevitably that they will give their readers less content that is valuable to them. As these newspapers become less valuable to readers, they become less valuable to advertisers as well.

To that point, Zell and his cronies say they plan to close the Los Angeles Times’ Baghdad bureau.

-- Dan Neil, Corie Brown, Henry Weinstein, Walter Roche, Myron Levin & Jack Nelson
For more information contact:
Attorney for the Plaintiffs Plaintiffs’ spokesman
Joseph W. Cotchett Dan Neil
Philip L. Gregory (818) 508-1000
Cotchett, Pitre & McCarthy
San Francisco Airport Office Center
840 Malcolm Road, Suite 200
Burlingame, CA 94010

Anonymous said...

Why do I keep coming to this site? No updates since mid-August??

Anonymous said...

From LA Observed:

Note to sources at the Los Angeles Times

I've never felt the need to do this before, but it seems prudent to alert the Los Angeles Times staffers who help me stay informed about the inner workings of the paper. According to multiple sources at the Times, new publisher Eddy Hartenstein has been calling it "treason" for employees to share information with LA Observed. Now, it's easy to dismiss his rhetoric as beginner jitters — history has seen plenty of media publishers who naively try to muzzle the journalists who work for them, only to learn that it can't be done. (Never mind that it's antithetical to why the paper exists.) Before Hartenstein arrived in August, the Times gave up fretting about the newsroom memos we post here and started publishing them too, sometimes first. LA Observed is no longer blocked on employee computers at the LAT's Olympic printing plant (or at KTLA Channel 5) and the link to LA Observed was restored to the blogroll at the Times' local news blog after pointedly being dropped. (After all, Zell did decree no more censoring.)

And yet, solid sources have let me know that current Times leadership is unhappy enough (or paranoid enough) about stuff getting out to consider action against staffers. I don't know if Hartenstein is thin-skinned enough to retaliate — especially given Sam Zell's famously relaxed rule book — but he is throwing around the t-word. So take precautions — use your personal email, our PO box, or pick up the phone — and don't presume they aren't watching. And be assured that I will continue to report accurately on the Times with your help and, as always, will never divulge my sources.

I emailed Hartenstein and Times spokeswoman Nancy Sullivan about the treason comments a couple of days ago and have not heard back.

Unrelated, let's hope: Tell Zell, the blog that claims it is written anonymously by a Times staffer, has only updated twice in the past month and has yet to mention this week's new wave of buyouts and threatened layoffs that socked the battered LAT newsroom in the gut. Sources tell me Times bosses have been mightily interested in discovering who writes Tell Zell and have a watch list of suspects -- but really, does the most troubled newspaper in the U.S. over the past couple of years have time to worry about stuff like that?