GateHouse announces pay cuts at Mass. newspapers

The Boston Globe isn't the only newspaper in Massachusetts fighting for its economic survival. Earlier today, GateHouse Media New England, which publishes more than 100 community newspapers in Eastern Massachusetts, announced a "temporary" pay cut.

According to an account by Jon Chesto in the Patriot Ledger of Quincy, a GateHouse paper, salaries will be reduced by an average of 7.75 percent, with the lowest-paid employees receiving a 7 percent cut and the highest-paid getting whacked by as much as 15 percent.

The goal is to save $2.5 million this year. The pay cuts would be reversed if and when the recession-battered advertising market recovers.

In addition, we learn from Chesto's story that GateHouse has reduced its full-time workforce in Massachusetts by about 10.5 percent since the beginning of the year, and currently employs about 1,100.

In a company-wide e-mail, a copy of which I obtained shortly after it was sent out, GateHouse Media New England president and chief executive Rick Daniels explains what's behind the pay reductions:

Why are we taking this step? Why now? It's really pretty simple: As much as we have done everything in our collective power to blunt the negative effects the economic crisis has had on advertising, virtually ALL major metropolitan markets have been hit by advertising declines that have soared to the mid-twenties to mid-thirties percent (compared to prior year months) since early January. These revenue declines have dramatically hit the cash flows of most publishers.

(Click "continue" to read more)

The pay cuts will take effect next week except at three unionized papers, where GateHouse executives will seek to negotiate reductions: the Ledger, the Enterprise of Brockton and the Herald News of Fall River.

In a telephone interview after the cuts were announced, Daniels told me that — barring an unexpected further deterioration in the economy — he doesn't expect any further dramatic cuts.

"Anything else we would do would be more in the manner of pruning and trimming," he said. He would not, however, rule out cutting back on the publication frequency of some papers or even closing a few, noting that there are regions that are served by multiple GateHouse papers. The company has closed a handful of papers over the past year.

And though Daniels declined to predict when GateHouse would be able to reverse the pay cuts, he said he hopes to be able to evaluate at the end of 2009 when he would be able to "mitigate or eliminate" them.

"It's an imposition and a hardship for any long-term employee to say, 'Here's a cut in your pay,'" Daniels said.

GateHouse publishes some of the best-known papers in Massachusetts, including dailies such as the MetroWest Daily News of Framingham as well as the Ledger, the Enterprise and the Herald News. Its larger weeklies include the Cambridge Chronicle, the Somerville Journal and the Newton Tab; smaller papers extend well into the exurbs and on Cape Cod.

The New England unit is part of a national chain of about 400 newspapers based in Fairport, N.Y. Like many newspaper companies, GateHouse is struggling with debt that it took on during more prosperous times. Last fall, its stock price fell to such a low level that it was delisted by the New York Stock Exchange.

In late 2008 I wrote a story for CommonWealth Magazine that examines GateHouse and the future of community journalism in some detail.