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Comment by aurizon | Hacker News Reader

What are their current wages, and what are they offered, but have declined? I am unable to support or castigate unless I know what side is in error. We have seen the huge loss of first class mail starved the US Postal Service of $$, and now the decline in printed page journalism with the ease of access by all manner of fake news/blogs has starved the news papers of $$ - yet on the other hand there is a hedge fund buying news papers - do they know something I do not know?

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>What are their current wages, and what are they offered, but have declined?

They want an average raise of $384/mo (about $4.8/hr).

They want $300k increase in wages - split across the 65 person team.

For real? Is there a citation you've got for this? That seems crazy low.

> During two years of bargaining, The New York Times company has slow-walked contract negotiations with unfair labor practices and insignificant wage offers that severely underpay our staff. We, members of the Wirecutter Union, are fed up. The wage increases we’re seeking amount to only about $300,000, spread over our 65 person unit. Wirecutter has been wildly successful, especially over the time we’ve been bargaining this contract, and continues to bring in record revenue for the Times, which is sitting on over $1 billion in cash. Additionally, Times management has offered paltry guaranteed wage increases of only 1%, despite soaring inflation and cash flows.

https://www.gofundme.com/f/support-striking-wirecutter-union...

https://twitter.com/wirecutterunion/status/14631750942184161...

Are they making enough off Wirecutter to do that? I have no idea how much Wirecutter brought in this year versus previous years.

If you own a paper, and revenue starts dropping 10% YoY for multiple years then you are going to need to put in place changes to the business, finances, corporate structure that most people who owned newspapers do not want to do.

In some cases, this has been forced due to high levels of debt. But even in those cases, some change in operation is usually required because something has changed quite significantly.

So you try to sell your paper? Most corporate buyers don't want to buy a problem. Most PE funds don't want to buy a problem. Bond holders don't want to take control. The most likely buyer is a hedge fund that specialised in purchasing distressed assets. So it is the opposite of what you think: the hedge fund knows exactly what you know, that is why they are buying. The information in the decision to buy for a hedge fund is not the trajectory of the business but the price. You can buy a business in an industry that is failing, and still make money. Ofc, what journalists (outraged by someone coming in and telling them they have to earn their wage) forget is that this isn't easy work. Hedge funds that specialise in distressed assets are buying a problem...that is why someone is selling it to them.

It is is hard to generalise but from what I have seen: newspapers are still generating cash, there is a lot of scope to cut back on staff (to put it bluntly, newspapers were a monopoly business so they ran tons of staff doing things no-one read, they were a sinecure/tenure type job), digital strategy at most papers is very bad because managers worried about hurting offline, fully digital has a totally different staff model (a website is a totally different experience to a paper, all the views are concentrated in that top 10% of stories...no-one is going to hunt through/scroll down for your gardening guy), and there is scope for restructuring with debt holders. The business is declining but nowhere near as fast as other industries affected by online. Declining businesses like that are usually mispriced by the market who give them a control discount (and tbh, everyone just wants growth...look at Dillard's, they bought back effectively all their stock and the share price went up 600% in a month, people want to buy potential profit tomorrow rather than actual profit today), so taking the business private is usually very profitable.

Yes, I see, managing a declining business can be done profitably, and they might have other assets the fund will sell.

I think some newspaper groups in the US had TV stations. I know some newspaper groups that own printing works have tried to sell those too. But, generally, no. The reason to buy newspapers is using the cash flow to turn around the business (again, it is very unlikely that you will survive doing this as a public company, so there is a reason to sell to a privately-run distressed asset specialist).

True, they know how to break it up and sell some assets and shed some obligations, like pensions...

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