Boston Globe Union Approve Cuts, Clears Sale Obstacle

[Omaha Steve]

http://www.bloomberg.com/apps/news?pid=20601103&sid=a7llICXZS5BI

By Greg Bensinger

July 21 (Bloomberg) -- The Boston Globe’s largest union approved a contract for $10 million in annual cuts in a decision that may reduce losses at the newspaper and help owner New York Times Co. negotiate its sale.

Boston Newspaper Guild members voted 366 to 179 in favor of the contract, Robert Powers, a spokesman for the Boston Globe, said yesterday in an e-mail. The deal calls for a 5.9 percent salary cut and reduced benefits. Times Co. imposed a 23 percent pay cut last month after the Guild rejected an earlier proposal.

The accord removes a potential obstacle to selling the Globe, according to Gary Chaison, a professor of labor relations at Clark University in Worcester, Massachusetts. The newspaper’s operating loss would reach $85 million this year without further cuts, its publisher said. Times Co. delayed accepting bids from potential buyers until at least yesterday’s vote, beyond an original deadline of July 8, a person familiar with the matter said this month.

“A new contract puts all the details in place and there are no loose ends that a buyer would have to worry about down the road,” Chaison said. “A buyer knows they’re taking on a union that can compromise.”

Times Co. hasn’t publicly commented on a possible sale of the Boston Globe. It is seeking a buyer for its minority stake in the Boston Red Sox baseball team and agreed to sell its WQXR radio station for $45 million. Chairman Arthur Sulzberger Jr. said last week in a memo to employees that Times Co. would fund debt payments with the proceeds from asset sales.

Times Co. gained 34 cents, or 5.6 percent, to $6.42 at 4:01 p.m. in New York Stock Exchange composite trading. The shares have dropped 12 percent this year.

FULL story at link.