Newspaper Costs: Will the Guild Contracts Be Challenged?

Why has Wall Street loss faith in the newspaper industry? Lots of reasons, but one subterranean one is that it costs too much money to produce papers. Much cost of course is in those presses and distribution systems, but another one is that it costs lots of money to pay professional journalists -- especially those who are represented by the Newspaper Guild union. This problem sounds familiar. Consider the airlines and how their ability or inability to "partner" with multiple unions has either given them new (if maybe temporary) life or spelled doom.

Now the Guild is readying itself for a KR dissolution, as this Grade the News-published Guild memo points out -- http://www.gradethenews.org/2005/mnguild.htm

If KR -- or other -- newspaper companies sell off assets -- rather than the company(ies) wholly, new owners may try to break union contracts.

As the Guild points out, KR did exactly that in its 1997 Monterey Herald purchase. Buying assets and breaking contracts has not been a standard way of operating, but economic pressures may change that tradition. As would-be acquirers pencil out a KR acquisition, that's gotta to be part of the modeling.