Chairman Says Cuts Coming to ‘Pittsburgh Post-Gazette,’ ‘Toledo Blade’

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By: E&P Staff

Cost reductions are coming to the Pittsburgh Post-Gazette and Toledo Blade. “The difficulties at the newspaper division are real,” Allan Block, chairman of Block Communications Inc., which owns the two papers, said on Tuesday in talking to securities analysts.

“We will be required to make hard decisions in regard to the newspapers,” Block told analysts. “The two newspapers we own are old media businesses suffering from all the problems and challenges of old media. Only good cost control will buy us time.”

His comments were reported today in the Post-Gazette. “BCI faces negotiations with unions at both newspapers in 2006,” the newspaper reported. “During the new contract talks, Block said the company would aim to improve operating margins that have been hampered by high labor costs.”

The recent death of former Pittsburgh Post-Gazette Publisher William Block, Sr., came at a critical time for the parent company, Allan Block, his nephew, added.

On Monday, the company reported a second-quarter loss of $438,768 on revenue of $109.5 million, down from last year’s profit of $9.25 million on revenue of $109.57 million.

Besides the newspapers, BCI owns cable and broadcast units. It is privately held but has issued debt securities that are traded publicly.

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