Fire Bosses, Hire Reporters p. 9

By: George Garneau

That's how one Calif. paper copes with soaring newsprint costs;
Tribune Co.'s centralized back-office support takes up slack sp.

UNDER CRUSHING COST pressure, the Escondido, Calif., Times Advocate is taking an unusual tack: It's slashing management.
"At some point, it came down to a choice between chiefs and Indians, and we felt we had to find a way to operate with fewer chiefs," president and publisher John Armstrong said.
The elimination of three director-level jobs is designed to offset 30% higher newsprint costs this year, and some of the savings will go toward hiring several reporters, Armstrong said.
The management restructuring eliminates the positions of director of sales and marketing, director of circulation and operations and, later this year, chief financial officer. Their responsibilities will be handled by manager-level supervisors, who will report to Armstrong. The 41,000-circulation daily, a sister daily and a weekly together employ 270 people.
With newsprint, the biggest expense after payroll, expected to cost at least 30% more this year, "we felt we needed to do all we could to avoid passing along this additional cost to our advertisers," Armstrong said.
"At the same time, we want to improve our local news coverage, and that also costs money."
The paper is able to cut some management because its parent company, Tribune Co., over the past two years or so has been quietly centralizing back-office operations, including accounting, employee benefits, human resources, and communications at its Chicago corporate headquarters.
While newspaper chains have long centralized such functions as purchasing and law, individual newspapers and broadcast outlets traditionally have tended to their own accounts and employees.
Centralization allows Tribune Co.'s businesses to reduce staffing for routine office functions by shifting, for example, payroll to a more specialized and equipped staff in Chicago, leaving the Times Advocate more money to devote to covering the news.
The Times Advocate already eliminated one job when Chicago operations took over human resources' duties about two years ago, and it plans to do without its top financial officer when Tribune Co.'s Finance Services Center assumes accounting functions later this year.
Armstrong, nevertheless, praised the supervisors whose positions are being eliminated: sales and marketing director Mary Jacobus, circulation and operations director Mike Manning, and chief financial officer Gary Pekala.
"The idea is to consolidate as many back-shop operations as possible in a central location," said Tribune Co. spokesman Bob Carr. "There are economies of scale and procedure that are staggering. You can do more, more efficiently, with a better trained work force."
Carr did not know how many jobs centralization has eliminated overall for Tribune Co., whose units employ nearly 10,000 people. While local operations will always need some support staff, "the functions that make sense will continue to be consolidated," Carr said.
Tribune's Orlando Sentinel has already eliminated 25 to 30 jobs so far, and it has not done shifting operations, said Richard Darden, vice president of administration.
He said the service centers "have taken advantage of new technology and economies of scale to improve service and cut costs."
The ability to share computer files actually allows the financial service center in Chicago to mail bills to Orlando subscribers, who send their checks to the Sentinel via Chicago.
Where the service comes from is irrelevant, Darden said. What matters is that it is better.
When employees nationwide need to deal with the payroll or human resources, they can call Chicago through an 800 number and, for example, change their payroll deductions, using an automated system.
"Employees like it because it's quick and clean," Carr said of the new system.