UPDATE: Strike Averted, ‘Disappointing’ Deal Reached in Philly Talks

By: The Associated Press

The city’s two largest newspapers reached a tentative contract agreement with their largest union, an accord the newspaper guild described to members as “a disappointing, giveback deal.”

The Philadelphia Inquirer and Philadelphia Daily News and The Newspaper Guild of Greater Philadelphia reached a three-year deal on all issues Tuesday night. The union announced the deal in a statement, while the company reported the agreement on its Web site.

The union planned to discuss details at a membership meeting Wednesday night. Under union rules, a ratification vote would not come before the weekend.

“It’s a package requiring a lot of sacrifice from our members,” said Diane Mastrull, the unit chairwoman who led the Guild’s negotiating team. “But it is a package that is far less devastating than what the company originally proposed.”

The sides talked for 14 hours on Monday and met face-to-face for just over three hours Tuesday before the agreement was announced.

“It’s a very difficult agreement,” union president Henry J. Holcomb was quoted as telling the company’s Web site.

The three-year pact, which extends until Aug. 31, 2009, includes no pay increase for the 900-member Guild in the first year. Employees will get a $1,500 bonus, paid in two parts, in the second year, and receive a $25 per week raise in the final year of the contract.

“There’s no sugar coating this contract. It is a disappointing, giveback deal,” Mastrull said in a bulletin to members.

Because the union pays its own health benefits, the union said that some, if not all of the pay increases, might be diverted into the Guild’s health and welfare fund. The Guild represents editorial, circulation, advertising and clerical workers at the newspapers.

Guild spokesman Stu Bykofsky also spoke unfavorably about the agreement.

“This is probably the worst contract I’ve experienced since I’ve been at the paper, and that is since 1972,” said Bykofsky, a Daily News columnist.

Bykofsky said there is a chance the union might reject the agreement.

“It’s always possible,” he said. “But it’s hard for me to handicap that.”

Company spokesman Jay Devine issued a brief statement Wednesday morning thanking the Guild and all the other unions at the paper for their work in negotiations.

A major issue in the talks was control of the pension fund’s investments.

Officials of Philadelphia Media Holdings LLC, owner of the papers, wanted management to control pension fund investments alone, saying the company was legally responsible for funding it.

The union wanted to continue the long-standing practice of having a committee of labor and management decide on investments together, saying it has worked well for 40 years.

Holcomb said the current pension plan would likely be merged with another union plan with union input.

The agreement comes a day after officials said that several of the nine other unions at the newspaper had voted to ratify three-year labor contracts.

The company and Guild engaged in marathon talks two weekends ago and resolved a sticky seniority issue.

The Guild had threatened to strike when its contract expired Nov. 30, but held off as negotiations continued. The last strike at the newspapers, in 1985, lasted 46 days.

Department heads had been told that as many as 150 jobs could be cut from the Inquirer newsroom, about a third of the staff.

Philadelphia Media Holdings bought the dailies from McClatchy Co. in June in a deal valued at $562 million. The purchase price included $47 million in assumed pension liabilities.

In March, McClatchy announced plans to buy Knight Ridder Inc.’s 32 papers but immediately sell 12 of them, including both Philadelphia papers, largely because they were not located in rapidly growing markets.

The newspapers’ publisher, Brian Tierney, a former public relations executive who led the purchasing investment group, expressed optimism after the sale was announced. He said he wanted to invest in the newspapers to assure their continued growth. He said some advertisers planned to increase their spending with the papers.

But in October, he announced that sharply declining national advertising revenues would require contract concessions and that layoffs were unavoidable for the company to meet its bank obligations.

He said cash flow for 2006 was expected to be less than $50 million, half of what it was in 2004.

There was a newsroom shake-up in November. Inquirer editor Amanda Bennett was replaced by Bill Marimow, a former Baltimore Sun editor and Inquirer city editor. Marimow had helped the Inquirer win two Pulitzer Prizes and had most recently been serving as the ombudsman at National Public Radio.

Circulation has been on a sharp decline at the Inquirer, the larger of the two papers, with weekday circulation down 7.6 percent to nearly 331,000 in the six months ended Sept. 30.

As of October, the company had a total of 2,461 employees.

Through buyouts last year while still part of Knight Ridder, the Inquirer reduced its editorial staff by about 15 percent, from 500 to 425, and the Daily News cut its editorial staff 19 percent, from 130 to 105.

From 1975 to 1990, the Inquirer won 17 Pulitzers, the Daily News two.

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