Detroit Free Press moves one step closer to layoffs
Crain's Detroit Business
The Detroit Free Press is moving into Gannett's Community Publishing Division, Bill Shea writes. That's important, he says, because the paper used to operate independently from other Gannett papers and wasn't subject to division-wide cost-cutting imperatives.
I asked [VP Rich] Harshbarger if the switch in divisions meant the Free Press would be subject to those all-too-often mandates, to cut jobs, require employees take unpaid furloughs and freeze wages. He said the publication would be required to follow whatever directives came from that unit.
Free Press editor and publisher Paul Anger kicked up an Internet rumpus in June when he mentioned that layoffs were coming to the daily, which publishes via a Joint Operating Agreement with the Detroit News. Making significant changes to the Freep, Shea writes, would require federal approval:
The Detroit JOA, according to its terms (I have a copy) can be dissolved starting in August 2015 if the newspapers are both unprofitable – what the document calls "newspaper operating losses" sustained by the partnership.
People in a position to know have told me that the newspapers continue to lose money. That bears out recent history: David Hunke, who used to run the Free Press as publisher and the partnership as CEO, said publicly in 2009 that the operation was losing money. Harshbarger in August 2010 told me they were "working toward profitability" — i.e. were still losing money.
Gannett pays most of the costs of running the Detroit News under the JOA, Shea writes, adding:
By all reasonable measures, it's unlikely Detroit will remain a two-newspaper town much beyond 2015. Just a handful of cities have two dailies, and Detroit already isn't a two paper city by traditional standards.