• Eight percent wage cut effects STMG employees.

• STMG will still lose $1.28 M per month

• The first move by Tyree has been to put a gun to employees head

• It's a close call, work for the STMG or unemployment

• What Tyree needs to change to save the company

 

 

The Windy Citizen posted some additional news on the James C Tyrell purchase of the Chicago Sun-Times parent, Sun-Times Media Group. According to a memo published there, all non-union employees are taking an eight percent wage cut. It's all a little more complicated than that, with a 25,000 floor that won't be affected, and a larger cut if you're making more than $100,000. And, if you're in ad sales, no cut at all.

 

It's the first action of the new management. And they haven't even taken over yet. Boy, these guys are moving fast. “These are a required condition to be met before we can close a sale. The Buyer has required that agreement to these terms be achieved in writing no later than Tuesday, Sept. 29, 2009,” Jeremy Halbreich, the interim CEO and chairman of the Board of Directors says in his memo today.

 

Put a gun to their heads Jeremy, it would be similar to those words...

 

We've already established that the company is bleeding cash at a rate of about $2.115 million per month, according to the most recent filing of the company. And, according to those filings, the company is also home to about 1,904 employees. And, further, that the amount spent on “Payroll and Benefits” in the most recent period was $10.416 million. So, an eight percent reduction, assuming a lot of things that we shouldn't assume, but we are in a rush here, would save the company about $833,000 a month. It still needs to save $1.28 million per month. And that's before it begins paying into things that were suspended by the bankruptcy proceedings. Things like pensions.

 

But who needs a pension, hell, who needs a job? Assuming that the employees there had a fifteen percent cutback already, the new cutback would be gracious enough to allow them about 78 percent of the earnings they had before this got going.

 

Quick math, 1,904 employees received $10.416 million per month, or about $125 million per year, less eight percent, is about about $115 million per year. Average annual compensation there is about $60,000 after the cutbacks. That includes some taxes paid by the employer that the employee doesn't see. And health care.

 

More assumptions, 20 percent of compensation is for benefits not included in the wage numbers, and then some calculus and whamo! Average take home pay is probably about $50,333. We could make some better calculations, we know the union pay for drivers for example. And some digging would bring up the FTE. New writers are earning perhaps half that amount.

 

For me, I'd consider taking the package, if any and chucking it. Most people would be able to earn about $20,800 a year in unemployment. Enough...

 

But let's assume that Tyree plays nice and the people there go along. What needs to be done?

 

• Website redesign

  • One link across all sites to one story (see SEO strategy by Tribune SEO specialist).

  • It's a website, not a tabloid page.

  • Social media outreach. Audience created stories.

• Play on strengths

  • Great columnists, voices

  • Strong South Side presence

  • Strong suburban presence through community papers

• Develop new voices

  • Copy ideas that engage audiences. Look hard at ChicagoNow.

  • You need SEO help.

• You're not competing well against the RedEye on the street or against anyone online

  • Redefine the battle against RedEye. It's RE that's the issue, not the Tribune.

  • Surkamer should probably go. He hasn't found the efficiencies needed to survive. He kept you going while you were sold, now there is a new problem. Find someone new. But go outside.

• Automate as much online advertising as possible. Be a cheap and local Craigslist. Sell down to print, not up to online. The online, from ad sales to copy, needs to stand alone.

  • Get online out of 350 Orleans to another site. A garage somewhere. Make them the guerilla force of the company.

  • They borrow from the newspapers, but editorial is not part of the papers. New editorial staff. Definitely a new ad staff.

  • Stay small. Stay young. Stay snarky.