Globe needs last-minute union deal

THE Editor of the Boston Globe has told staff to brace for extreme corporate turbulance as the paper bids to win the agreement of 13 unions over cost-cutting within the next 72 hours.

The newspaper’s executives must get the 13 unions to accept US$20 million in cost reductions by Saturday (AEST) or face closure by its owner, The New York Times.

A statement by the New York Times overnight simply said that the deadline was “the point at which negotiations end” with the 13 unions – and implied threat that the Globe is teetering on the brink.

Currently, the Globe is forecast to lose US$85 million this year – something that the New York Yimes will not accept. Last year, it lost US$55 million.

The NYT has its own problems. It carries US$1.1 billion in debt and faces substantial operating losses by a number of its newspapers.

It lost US$74.5 million in the first quarter.

No newspaper company in this region is in such deep debt, or facing revenue downturns and challenges to cost controls. For example, Fairfax Media earlier this year reported an operating profit of A$370 million before charges.

For the New York Times, three key factors contributed to its Q1 performance: The Globe, which shed 27 points in ad revenue; its New England group of papers, whose revenues fell 32 percent and one-time charges for redundancies.

American pundits have speculated the threat of closure is a bluff to get the Globe to pull in its costs.

Globe staff are not convinced.

One told Associated Press:  “I don’t think anybody thinks this is a bluff or a fake, but people don’t know what’s going to happen … there’s a lot of uncertainty and a lot of anxiety”.

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