By Dan Shaw, Evansville Courier & Press
The employees of the Evansville Courier Co., are taking pay cuts to help the newspaper company weather the current recession.
On March 9, the pay of salaried employees will drop by 5 percent. That of most hourly employees will fall by 3 percent.
Starting in April, the Evansville Courier Co., will no longer match employee contributions to a 401(k) retirement program. The company said it hopes to reinstate the match as soon as the economy improves.
Finally, the Evansville Courier Co., said it would freeze its pension plan. Employees who are close to retiring will be able to obtain a transition benefit, which the company planned to explain in greater detail at a later date.
Jack Pate, the publisher of Evansville Courier & Press, said the decisions were largely a result of the rising cost of newsprint paper and a decline in revenues from advertising.
"Our problem is not the eyeballs we reach," Pate said. "We have a lot of demand for our product, both in print and online."
Along with the Courier & Press, the Courier Company runs The Gleaner, The Union County Advocate, Audubon Printing and other businesses. All of them are owned by the E.W. Scripps Co., which was making similar cuts at its other properties.
Printing and distributing a newspaper requires the work of many people and thus is an expensive enterprise, Pate said. He noted that a first-class stamp now costs 42 cents, an amount that will rise to 44 cents come May 11.
"And we charge less than 50 cents for home-delivery of our product," Pate said. "It's very expensive to have something like that delivered to the door."
The announcement Wednesday concerned the company's latest attempts to lower its costs. In November, the Evansville Courier Co., said it would lay off 32 employees. Those reductions came not long after the company had moved the printing of The Gleaner to Evansville and cut positions in Henderson, Ky. as a result. The two rounds of layoffs reduced the Evansville Courier Company's workforce by about 70, leaving about 335 full-time employees.
In January, Scripps executives and senior managers all took pay cuts, lowering their salaries by between 5 percent and 15 percent.
Pate said most newspapers companies have taken similar steps in recent times. Gannett Co., the largest U.S. publisher of newspapers, has ordered employees to take a week off work without pay during the first quarter of the year. McClatchy Co., another large newspaper chain, said it will reduce its budget by between $100 million and $110 million this year, after reporting an operating loss of $20.4 million in the fourth quarter of 2008.
E.W. Scripps announced its latest measures a day before it is scheduled to announce its fourth-quarter earnings. For the third quarter of 2008, the company reported a loss of $16.8 million, or 31 cents a basic share. That was down from the profit of $88.4 million, or $1.63 a basic share, the company had seen in the same period a year ago.
E.W. Scripps' newspaper division reported a profit of $14 million for the third quarter of 2008. That was down from the profit of $32.7 seen in the same period of 2007.