U-T's moves raise employees’ fears of layoffs

More head-chopping could come this week, according to rumors

Anonymous newsroom sources say that layoffs could be concentrated in advertising and U-T TV
  • Anonymous newsroom sources say that layoffs could be concentrated in advertising and U-T TV

U-T San Diego’s recent spending slashes have employees worried about possible layoffs — perhaps as early as this week.

Three management moves have generated the rumors: (1) The company told employees that it is ending its 401(k) match — that is, the company will no longer add 50 percent to a 401(k) contribution up to 6 percent of one's salary. The move was effective January 1; (2) For several months, the company told employees to take all their vacation before the end of 2013. Such a move often suggests an effort to clear the books by year’s end; (3) Effective January 1, the U-T abruptly ended its U-T Rewards program, through which consumers could get discounts on products from certain advertisers. In its announcement, the U-T stated, "Any outstanding rewards that you have will no longer be eligible for redemption."

Newsroom employees believe the layoffs could be concentrated in advertising and U-T TV, which they estimate is losing $400,000 to $500,000 a month. They note that the 401(k) memo from chief executive John Lynch stated, with unusual candor, "The media business continues to face the challenges of a difficult economic recovery." Lynch blamed the move partly on the expenses of Obamacare.

In short, the happy face management formerly flashed when it claimed it was profitable seems no longer in evidence. Some employees, noting that the dropping of the 401(k) match is essentially a pay cut, are likely to stop contributing to the company's 401(k) program and find an individual retirement account (IRA) outside the U-T.

There is even some speculative talk that the company or parts of it will be put up for sale, or the whole operation could be terminated so owner Doug Manchester could pursue his real estate plans with the land he bought when he purchased the paper. He has already filed for entitlements on some of the property.

I emailed Lynch yesterday, January 5, and said I wanted a response by noon today. I have received none. He did not reply to the last email I sent him, either.

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The U-T would have been better off not starting that TV station--that no one watches.

aardvark: From what I have seen, U-T TV is junk. I can believe it is losing $400,000 to $500,000 a month. Lynch's various schemes could be draining the company; his idea of a national news network hardly looks like a winner.

In making the cost slashes, he may be trying to pretty up the books to save his job. Best, Don Bauder

Don: I saw an article written by Elliot Spagat of AP dated 10/21/2012 that quoted John Lynch, who said in part that the U-T "...was significantly profitable...". Also, the article said the U-T spent $5 million setting up U-T TV. It appears the U-T is significantly LESS profitable than first stated.

aardvark: I doubt if the U-T is profitable and doubt that it ever has been under Manchester/Lynch. There are so many accounting tricks these days that almost any company can be made to look profitable. It's a privately held company that does not report its finances.

Contrarily, extremely profitable sports teams, when begging taxpayers for a subsidy, can use tricks so they can claim they are unprofitable. Best, Don Bauder

I can't believe they were spending that much on it to begin with! I have no idea where the money was going. Clearly not on writing content or slick editing.

Barbarella Fokos: The U-T spent a bundle on U-T TV. Now it is already cutting it back. Best, Don Bauder

These moves look just like things you see before retrenchment or layoffs. If I worked there, I'd be sweating bullets now. The employees who are losing their 401k match SHOULD look elsewhere. They will probably find better options at lower cost than sticking with the employer-sponsored plan, and will have more flexibility.

Visduh: The employees have been sweating bullets for some time. The employee cuts began at the end of the Copley reign, continued through Platinum Equity and Manchester. The employees are also embarrassed -- humiliated, really -- by the quality of the newspaper under Manchester, who is using it as a blatant propaganda vehicle.

Manchester and Lynch came in and said the paper would be a cheerleader for business and the military. That was telling readers not to believe what was in the paper, particularly since San Diego is one of the scam capitals of the U.S.

Yes, employees should not believe Lynch that the 401(k) match may be reestablished, and they should get IRAs outside the company. Most want to stay in San Diego, and there are almost no jobs around, so who knows what will happen?

Personally, I think the rumor that Manchester is fed up, is losing money, and knows he is being laughed at in the community, has credibility. He may be tone deaf, but at least he has some sensitivity. He may try to dump the company in whole or in part, but still hold on to the real estate, which is his real interest. I do believe it's possible -- I said possible, not probable -- that his reign will be over this year. Best, Don Bauder

Journalists face a terrible job market. The problem is that although the internet has spawned tens of thousands of websites that need writers to produce limitless amounts of content, most of the content is being provided by professional or amateur writers free of charge. I understand that Huffington Post receives most of its content from contributors without paying a cent. The only way U-T San Diego is going to survive is to find journalists who are willing to work at Starbucks to support themselves and provide free content to the paper merely for the thrill of getting published.

Burwell: You are so right. So much content -- even very good content -- is provided free these days. Of course, the salary level at the U-T has already been trimmed greatly, not only through layoffs but also through firings of talented and well-paid writers such as Tim Sullivan and Tom Blair.

Current U-T writers know they have to whore out stories. Lynch and Manchester have told them to do so in making statements such as that they want cheerleaders, and any sports writer who opposes a Chargers stadium giveaway will be in trouble. The paper simply does not have credibility. Best, Don Bauder

Burwell: It is a tough market for journalists, true. As a paid staff writer for HuffPost, I assure you the majority of stories on the website are from paid journalists. There are lots of unpaid bloggers who contribute to the site (their stories are found on the left rail of the front page and the front page of each section).

DMoye: Whether the authors are paid or unpaid, HuffPost's content is generally good. Look at this blog: those posting on one of my items very often have something that is much more profound and to the point than my initial post. They are not paid. Best, Don Bauder

I stand by my original comment that most of the content on Huffington is provided free by unpaid writers. As an example, former SDPD officer Norm Stamper is a prolific contributor to Huffington. Stamper collects two police pensions totaling at least $150,000 per year. I don't know whether Stamper is paid for his contributions, but if he is paid, it's peanuts and not worth his time to earn it. Stamper is certainly not living off any Huffington stipend. On the other hand, Stamper is taking work from professional writers who lack police pensions and have to support themselves solely with their writing. It is well known that Huffington gets most of its content for free and lawsuits have been filed over the issue. Huffington admits that most of its enterprise value, perhaps in excess of $1 billion, is attributable to the fact it obtains high quality content from contributors for free.

Burwell: Convincing statements. It's up to DMoye to try to refute you. Best, Don Bauder

Layoffs in Advertising and UTTV have been taking place since last Friday... they say there are more to come.

Xandermurrow: A Daily Transcript story by Dean Calbreath is now online: it says the same thing -- that layoffs actually started Friday. That is certainly possible, and my sources, whom I contacted over the weekend, certainly may not have heard that yet.

There is DEFINITELY more to come. The question is how soon. And how severe the changes will be. Best, Don Bauder

LAYOFF NEWS COMING IN: Sources say there have been eleven layoffs in U-T TV. The question, though, is when it will be killed in its entirety. Best, Don Bauder

Don, I'm wondering whether or not the "rewards suspension" is legal. Does anyone know if users were required to put up any monies in order to participate?

Duhbya: I am quite sure consumers didn't put up any money. It is certainly bad business practice to tell them "any outstanding rewards that you have will no longer be eligible for redemption," then apologize for the suddenness of the cancellation. If you click the words in blue in the second paragraph, beginning with "The U-T abruptly," you can see the message sent out.

It's bad customer relations, and it is also bad wording, because it's an admission you are in financial trouble. Best, Don Bauder

Geez, what's next? The "adult beverage" bars at the "New Stadium Fundraiser" soireés are no longer hosted?

Duhbya: Instead of having hosts, there could be a sign, "Grab your own. The drinks are on us. Gratis." Best, Don Bauder

"Grab your own" would serve as a great war cry for the new U-T.

Duhbya: Since Manchester is propagandizing for downtown subsidies that would line his own pocket, your idea is indeed a good one. Best, Don Bauder

According to Google translation of the Chinese article describing the green card financing of Papa's new hotel in Austin, Papa is going to invest $80 million to build the hotel. Construction of the hotel is supposed to start shortly, if it has not already. Add the $80 million to the $110 million Papa spent to buy the U-T, and $12 million for the North County Times, Papa has spent $202 million in the past two years. He also reportedly spent $2 million to buy a vintage car collection which is stored in the newsroom. According to Matt Potter, he also gave his ex-wife a $1 million signing bonus to expedite the divorce. Add in the property settlement he has to pay his ex-wife, and you're talking some serious money. It could be that the U-T is doing well, but Papa needs cash from the paper to fund other investments and pay his ex-wife.

Burwell: I am glad you pointed out the money Manchester has shelled out. I don't believe the U-T is doing well. In fact, I think it is losing money. Unfortunately, the divorce records are sealed. There must be some very important facts therein. Best, Don Bauder

PUBLICATION WEIGHS IN ON LAYOFFS. The publication NetNewsCheck said today (Jan. 7) that the U-T laid off "approximately 10 staffers at its in-house digital television station, U-T TV" Mike Hodges, the company's president and chief operating officer, did not say which positions were cut.

The company is looking at "the programming that was working and wasn't working," Hodges is quoted saying. U-T TV, backed by a $3 million investment, "has struggled to gain momentum with users," says the publication.

U-T wants to build a national network linking video efforts at newspapers across the country. But it still has no deal with Time Warner. Hodges is optimistic for 2014.

There have been previous shakeups. Last August, founding news director J.R. Mahon departed along with assistant news director Jeanette Abrahamsen.

Best, Don Bauder

I'm wondering why Manchester dished out additional money for the North County weeklies and what the point of that really was. Buying more papers, then laying people off and cutting back employees at the daily and TV outlet?

It's interesting, too, because the last owner of some of those weeklies before Mainstreet Media was Dex Allen, a San Diego radio exec who I understand knows John Lynch. I'm wondering if Manchester/Lynch might be transitioning out of the U-T somehow to own the weeklies only at some point?

Or ... Manchester and Lynch are just doing without thinking, not knowing really what it is they're doing with the whole monster.

NewsObserver2: Good points. The recent purchase of 8 weeklies smacked to me of another attempt to set up a monopoly in the county. (Some -- maybe all -- of those papers recently devoted huge space to a Manchester soiree.)

There could have been a bolt of realization that hit the company: the money shelled out for U-T TV was a mistake. So they will cut it back very sharply but keep spending on print. That might not be a bad idea but they are propagandizing in the wrong direction. They are preaching the Tea Party line when the City has gone Democratic and the County is now almost 50-50 Republicans/Democrats.

However, I have not seen any sign yet that they realize they are pointing the megaphone in the wrong direction. Best, Don Bauder

When Dougie bought the North County Times, he had to be thinking that he'd convert their subscribers into Mill subscribers. But if the ABC circulation figures are in any way credible (and I think that there is still some credibility there) the joke was on him. It would appear that those readers were, net, just lost. The weeklies will likely suffer the same fate.

Visduh: There is no question that the U-T lost a huge number of North County readers. It figures. Some NC Times reporters and editors were laid off and the paper was folded into the U-T. North County -- where so much of the wealth is -- is getting the short stick. Best, Don Bauder

Clearly it is time for new ownership at the UT. The UT use to be a staple in the majority of homes in San Diego City and County - the comments page after page - it has spiraled down to a mere resource for Sunday coupons.

Guess that is what you get when you attempt to influence vs provide factual news.

anniej: Manchester and Lynch have nobody to blame but themselves for the stark decline of the paper. Beginning with the first words they uttered -- the paper would be a cheerleader for business and the military -- the paper lost credibility, and has been losing it almost daily ever since. Best, Don Bauder

I hope Roger Hedgecock doesn't lose his gig at UT-TV as result of the budget cuts. Roger's had it rough trying to make it in broadcasting with a face like his. His face is truly made for radio. Pray for Roger and ask the good Lord to spare him from the cuts.

I hope that's a joke. If not, let's hope Hedgecock is dumped ASAP. Let him go get a real job for a change, like driving a garbage truck or selling shoes.

dwbat: In my column of March 6, 2013, I estimated that Hedgecock rakes in $600,000 a year, and that may be conservative (like he is.) His San Diego house then was worth $1.78 million and he has other real estate. Best, Don Bauder

Burwell: Hey, Roger's acne got him out of the military. Don't knock it. Permits him to be a hawk on foreign affairs, rather like Cheney, who also didn't serve. Hedgecock is making plenty of money. I did a column on that about a year ago. Best, Don Bauder

One can only wonder why a man at the age of Manchester is still charging around spending money and trying to influence the mob. Surely by now he should realize that his tactics are ineffective (years ago his approach was far more low-key and nuanced) and that he is just throwing good money after bad. Surely he should. Shouldn't he? SHOULDN'T HE??? Maybe not. He's not young any more, and his personal life is a shambles, or at least a shambles in the eyes of many of us. So, what keeps him going? Could he not just enjoy his Siberian honey for a few years while staying out of the public eye? I guess not. If he isn't wheeling and dealing he doesn't exist, at least in his mind.

Visduh: San Diego cognoscenti knew Manchester's personal life was strained long before he and his first wife divorced. Maybe he didn't believe that -- but others did.

One of the big problems with the U-T is that both Manchester and Lynch are older men with little knowledge of the media industry. Manchester, before he bought the U-T, was seemingly contemptuous of the media. Lynch had spent his career in radio and had had some successes and some big failures.

Some decisions have been dubious indeed. For example, the huge scaling back of the editing process creates embarrassing mistakes just about every day.

The heavy hand of the Manchester/Lynch ideology is reflected throughout the paper, although the two claim it is restricted to the editorial page. Clearly, it is not. The reason is that the two laid down the law -- be cheerleaders -- as soon as they purchased the paper. Reporters are afraid to write anything that will upset the two leaders. Again, this is evident almost every day. Best, Don Bauder

Forget about derivative network dramas or sitcoms sweetened with canned chuckles to cue the do-dos watching at home when to laugh. As Fran Liebowitz said, "If you're gonna' watch tv, WATCH tv!" UT-TV is what television is all about, style over substance aimed at bored La Jolla housewives. It makes "Here Comes Honey Boo Boo" look like "Al Jazeera America." Is there anything funnier than a newspaper-run station that hires reporters who can't read off teleprompters? Please don't take away my UT-TV. I need the laughs!

Scott Marks: Make your plea to Manchester and Lynch. Back in the late 1980s and early to mid-1990s, I gave presentations on two different TV shows on a regular basis and read off teleprompters. For some reason, I didn't have problems. Best, Don Bauder

Manchester becomes a County monopoly by buying up all of his local competition, yet he can't match the 50% 401K contributions. It doesn't add up. He blames Obamacare? He must think we are all totally gullible.

calif7: I believe the blame for that empty-headed memo belongs with Lynch and not Manchester. Employees feel the same as you do: if the bosses can afford to buy the North County Times and eight weeklies, and pour money into U-T TV (which is a local joke), cannot it afford to make the 50% match in 401(k)s? And why does it have to keep laying people off?

The result is an increasingly inferior product. U-T wants to establish a monopoly with a newspaper that is obviously a joke in town. That does not sound like an intelligent business strategy to me. Best, Don Bauder

Sounds like a terrible place to work. The abused employees should quit. Oh, wait, that isn't what they want! They have a right to "their" job, and a right to keep receiving the compensation they've always received, and should be 100% immune from any change they would consider to be negative.

Sorry, but like government pensions, "there is no money" still means there is no money. The newspaper business is dying. I know some people have this childish idea that a few 1%ers are raking in all the money they ever raked in and are just stingier with it. Bollocks. Rich people rarely get that way by being stupid, and one of the first precepts of business is, you do not kill the goose that lays the golden eggs. If you have a profitable business, you keep running it profitably (which means you keep people around who can do the job profitably). But if the skill set in question is in greater supply than demand, sorry kids… compensation goes down. Don't like it? Learn to do something where the demand exceeds supply so you can earn more.

The moving finger writes, and having writ, moves on: nor all thy piety nor wit shall lure it back to cancel half a line, nor all thy tears wash out a word of it.

jnojr: The upper 1% has raked in 95% of all the gains since the recovery began. The middle and poorer classes are actually losing income adjusted for inflation, and have for decades. Consumption is 71% of the economy. There is not enough money among people who spend to sustain this economy. The rising tide lifts all yachts, but the yachtsmen alone cannot sustain the economy, Best, Don Bauder

I wonder if Lynch will blame the inevitable closure of the paper on Obamacare. Employers have had months to forecast the financial impact -- if any -- that Obamacare would have. I think it's more of Papa-don't-care.

HellcatCopley: Well, Lynch has put part of the blame for cancellation of the 401(k) match on Obamacare. He might as well blame Obamacare for the declining financial status of the paper...the failures of U-T TV, the losing of readers in the North County Times purchase, the planned national news syndicate, etc.

Blaming Obamacare for all the U-T problems would be every bit as logical as the editorials that appear in that newspaper. Best, Don Bauder

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