Lenfest Announces Profit-Sharing for Inquirer, Daily News Workers

H.G. “Gerry” Lenfest told workers at the Inquirer, Daily News, and Philly.com they will receive a profit-sharing check. Photo | AP, Matt Rourke

Full-time employees of the city’s two major daily newspapers will receive a $903 profit-sharing check, publisher Gerry Lenfest said in a memorandum today. But the seemingly good news quickly became a point of contention in the negotiations between management and the union that represents the company’s journalists.

Interstate General Media — the parent company of the Inquirer, Daily News, and Philly.com — has gone to mediation in its negotiations on a new contract with the Newspaper Guild, the union that represents journalists at all three shops. The guild says the company is asking for concessions that could cost each employee thousands of dollars apiece.

Bill Ross, executive director of the guild, called the profit-sharing announcement “misleading,” saying the profits were built on buyouts of some employees and furloughs for those left behind.

“Where do you think that $903 profit-sharing check came from? Our givebacks,” Ross and the guild’s negotiating committee said in a mid-morning email to guild members.

But Lenfest presented the news as an unqualified accomplishment.

“For the past several years, we’ve endured our share of economic challenges,” he said in the memorandum, “but 2014 marked some steps in the right direction under our new management team and employees at every level of the operation.”

He added: “In order to recognize the 2014 achievements and to reinforce what can be accomplished when we work together as one company with a common goal of ensuring the success of The Philadelphia Inquirer, Daily News and Philly.com, I am pleased to announce a profit-sharing payment.”

Details of the magnitude of IGM’s 2014 profit were not immediately available.

Employees who worked full-time in 2014 will receive the full payment. Part-time employees and full-time employees who worked only part of the year will receive pro-rated payments.

The guild and IGM had agreed to a profit-sharing arrangement in their last contract, signed in 2013, but the provision had never been implemented until now. There had been some discussion of profit sharing beginning under the previous majority owner, George Norcross, but those talks quieted quickly when Norcross, Lenfest, and others began the legal battle that culminated in Lenfest taking sole ownership of IGM last year.

In current negotiations, guild negotiators said, the company is seeking to pass on increased medical costs to the guild membership — which would result in employees paying $4,000 or more in additional health insurance costs. The guild leadership has pronounced that item a “non-starter” in its negotiations.

The two sides were meeting in another mediation session this morning. The mediator’s eventual recommendations will be non-binding.

See the competing memoranda below.

 From Gerry Lenfest:

MESSAGE TO ALL EMPLOYEES FROM GERRY LENFEST

I want to take this moment to thank each of you for your tremendous work and dedication throughout my first year as the sole owner and publisher of our outstanding company.

For the past several years, we’ve endured our share of economic challenges, but 2014 marked some steps in the right direction under our new management team and employees at every level of the operation. Those efforts continue today with leaders in all divisions of the company working together to put us on a better path to sustainability.

In order to recognize the 2014 achievements and to reinforce what can be accomplished when we work together as one company with a common goal of ensuring the success of The Philadelphia Inquirer, Daily News and Philly.com, I am pleased to announce a profit sharing payment.

Every eligible full time employee will receive a check on Friday, May 1, 2015 in the amount of $903.00. (A lesser pro rata amount will be provided to eligible part-time employees and to eligible full time employees who were only employed for a portion of 2014.)

Thanks again, and I look forward to continuing to make this the best regional news organization in America.

Gerry

From the Newspaper Guild negotiators:

Subject: Guild Bulletin: IT IS OUR MONEY!

For five years, Guild members have given up two weeks of pay saving the company about $1 million a year.

Now when we want to devote those funds to our health and welfare fund, the company is balking. That $1 million won’t even fill the $2.5 million hole created by the company’s refusal to increase its fund contribution in 15 years. But it will help. (You will learn more about other strategies in upcoming bulletins.)

The company says we can’t afford furloughs. That it’s embarrassing to the company.

But consider this: Can any one of you afford to pay $4,000 (for single coverage) to $8,500 (for family coverage) MORE a year for health care? That would be on top of the $20 a week, or $1,040 a year singles pay as well as the $750 deductible bringing their total annual cost to $5,790. Those with family coverage already pay $50 a week or $2,600 a year plus a $1,500 deductible. Their new total would be $12,600 a year.

Have you thought about what that will do to your budget? Can you stay in your apartment? Your home? What else can you cut from your budget? Contributions to a retirement fund in lieu of the pension the company killed? A car, vacations, a college education for your children? How about clothes and food?

Not only has the company taken our money but the company’s chief financial officer won’t even acknowledge the hundreds of hours of free overtime that employees give this company every year saving hundreds of thousands of dollars.

Now, ask yourself, how did the company spend your money? Did it succeed in finding ways to improve our revenue stream? Or, did it pay our members not to work in a series of buyouts which created more work for the rest of us? Did select executives take raises and bonuses?

Where do you think that $903 profit sharing check came from?  Our givebacks.

It is our money and our sacrifices, our commitment and our ever increasing workload that drives this company. But this company doesn’t think it has to pay for that by providing adequate health care benefits. Instead, it wants you to cover yet another management failure to increase revenue.

The problem for the company is that we have nothing left to give because they’ve sucked it all up. Not only does upper management refuse to acknowledge that, it refuses to budget for the expense of having workers.

Management behavior in these negotiations is strong evidence for you to understand that when it matters, your sacrifices have not been appreciated or even noticed.

Management feels it does not have an obligation to you.

That is what is embarrassing.

In solidarity,

Howard Gensler

Bill Ross

Diane Mastrull

Cindy Burton

Melanie Burney

Regina Medina

Brian McCrone