Belt-tightening in USmedia hits thousands of emplo

Thousands of workers at U.S. newspapers and broadcasters are facing more layoffs, wage freezes and pay cuts as their cost-cutting owners scramble to survive an advertising drought that has become even more dire in recent weeks.

The grim conditions prompted Media General Inc. to inform its 5,600 workers Wednesday that they will be forced to take 10 unpaid days by the end of the year. Four of the days off must be scheduled by the end of March, with the remainder spread over the final six months of the year. The Richmond, Virginia-based company expects the furloughs to save about $9 million, spokesman Ray Kozakewicz said.

Media General previously had trimmed about $19 million from its expenses by suspending its matching contributions to workers' 401(k) retirement plans and suspending dividend payments to shareholders. The company publishes 24 daily papers, including The Tampa Tribune and Richmond-Times Dispatch in Virginia, and owns 19 television stations.

In another austerity measure, the Tribune Co. earlier this week froze the wages of all the nonunion employees at its newspapers, which include the Los Angeles Times and the Chicago Tribune, and its TV stations, which include WGN. The Chicago-based company filed for bankruptcy protection in December as it tries to cope with $13 billion in debt that is becoming more difficult to repay as advertisers curtailed their spending.

Weathering the storm

In a memo to employees, a Tribune executive said the company plans to negotiate with labor leaders to extend the freeze to unionized workers as well.

"Hopefully, freezing salaries will allow us to avert more drastic action in the future," wrote Gerry Spector, the Tribune's chief administrative officer.

At the time of its bankruptcy filing, the Tribune Co. had about 14,600 full-time employees. Court documents also indicated the company's payroll expenses ranged from about $15 million to $20 million every two weeks.

Media company E.W. Scripps Co. will also make widespread pay cuts and suspend some retirement benefits to control expenses, the company's chief executive said Wednesday in a memo to employees. CEO Rich Boehne said in the memo that the changes are needed to give the Cincinnati-based Scripps "the strength to weather the storm."

Scripps operates daily and community newspapers in 15 markets, and 10 broadcast TV stations. Newspapers include the Rocky Mountain News in Denver, The Commercial Appeal in Memphis, The Knoxville (Tennessee) News Sentinel and the Ventura County (California) Star. Scripps is trying to sell the Rocky Mountain News, which may close if a buyer can't be found.

Scripps also operates Scripps Howard News Service and United Media, which is the worldwide licensing and syndication home of Peanuts, Dilbert and 150 other features and characters.

Major media companies are pinching pennies because their main source of revenue - advertising - has been rapidly drying up. The downturn for newspapers began several years ago as Web sites like Craigslist offered free advertising alternatives and Internet search leader Google developed a more effective marketing vehicle. The worst recession since the early 1980s has prompted advertisers to curtail spending even further.

Dropping ad revenues

The U.S. newspaper industry, as a whole, is expected to collect about $28 billion in ad revenue this year, a 40 percent drop from $46.6 billion in 2006, according to a Barclays Capital analysis. U.S. television broadcasters have fared better than newspapers, but they won't get a boost as they had last year from the Olympics and political ads. The industry's ad revenue is expected to fall 13 percent this year to about $38 billion this year. While both Media General and Tribune indicated their belt tightening is meant to preserve jobs, newspaper publisher McClatchy Co. is gearing up for its third payroll purge since June.

McClatchy executives warned of more layoffs earlier this month when they disclosed a fourth-quarter loss of $21.7 million and acknowledged the slide in its advertising revenue was accelerating.

The Sacramento-based company, which owns 30 daily papers including The Miami Herald and The Sacramento (California) Bee, hopes to save $100 million to $110 million this year after lopping $200 million from its annual expenses last year, primarily by reducing its work force by 10 percent on two different occasions. USA Today publisher Gannett Co. already has imposed a one-week unpaid furlough for most of its U.S. employees, while News Corp.'s The Wall Street Journal recently trimmed about two dozen newsroom jobs and imposed a one-year wage freeze for nonunion employees.