Owner: Sample News Group
Date: Feb. 29, 2008
One reporter, a computer tech, a customer service representative, a receptionist and several advertising workers were laid off.
Source: Sun Journal
By Steve Mistler, The Forecaster
Friday, March 7, 2008
BRUNSWICK — The commissioner of the state Department of Economic and Community Development on Tuesday said he will examine the circumstances surrounding the layoff of 10 employees after the recent sale of the daily Times Record newspaper.
Meanwhile, officials at the Finance Authority of Maine defended the organization’s decision to grant the newspaper’s new owners access to a $7 million tax-free bond to help complete the sale.
FAME’s decision to allow Sample News Group, the Times Record’s new owner, to access the tax-free bond market came under scrutiny because the company was supposed to demonstrate a public benefit. While maintaining employment levels was not a condition of FAME’s approval, Sample News Group had to demonstrate a public benefit through economic development, job creation or providing a public service.
During a FAME public hearing in January, James Saffian, a bond attorney representing Sample News Group, said the bond was necessary to ensure that the sale went through and to “maintain current head count and payroll.”
According to FAME Deputy Counsel Chris Roney, who said he hadn’t heard about the layoffs until reading a story in last week’s edition of The Forecaster, the authority doesn’t assume risk in issuing the bonds. It issues between $30 million to $40 million to mid-size manufacturing companies every year.
Nevertheless, some observers are questioning the decision to grant Sample access to the tax-free bond market if the company’s intent was to eliminate jobs. Whether FAME has any recourse at this point is unknown.
“I want to know the public benefit of laying people off,” Rep. Stan Gerzofsky, D-Brunswick, said. “The ($7 million) may not be taxpayer money, but it’s taxpayers who are guaranteeing the bond.”
DECD Commissioner John Richardson, who also sits on the FAME board, expressed similar concerns. He said he voted in favor of Sample’s bond application for a variety of reasons, but mainly because he believed the newspaper would not only continue operating, but that it would also maintain employment.
“(FAME) staff indicated to me that they were left with the impression that this kind of economic incentive program would be helpful to keeping all jobs,” Richardson said. “It’s a little disheartening to see the loss of certain jobs.”
Richardson, a former legislator and speaker of the House from Brunswick, added “should (the bond attorney) or we have done a better job drilling down on that question? Maybe. I think many people took that to mean that the jobs currently at the paper are safe.”
Richardson said he wasn’t sure there wouldn’t have been more layoffs if the FAME bond wasn’t approved. That sentiment was echoed by Roney.
“Obviously, we’re distressed anytime a Maine citizen loses their employment,” Roney said. “But we also like to focus on the fact that there are still 90 to 100 people who retained their jobs. Nobody knows what would’ve happened if the (bond) hadn’t occurred. … It’s entirely speculative.”
Roney wouldn’t say if the layoffs were a surprise, adding that they were “unfortunate, but not contrary to our findings.”
He maintained that Sample satisfied the public benefit requirement. In other instances, however, applicants are sometimes required to add employment.
In 2002, FAME issued a $750,000 revenue bond to the publishers of the Sun Journal in Lewiston for construction of a distribution facility. In that instance, adding jobs was a condition of approval.
The Sun Journal and The Forecaster are both owned by Sun Media Group.
Roney said each application is different.
“Every application presents a new set of facts,” Roney said. “In some cases, the requirement may not be adding jobs, but a large environmental benefit. Each application and approval is very fact-dependent.”
It’s unclear how much Sample was forced to reveal during its application. The Times Record has made no mention of the layoffs in its reporting on the sale.
Sample News Group owns the daily Journal Tribune in Biddeford, several weekly publications in southern Maine and other newspapers in Pennsylvania and New Jersey. The Pennsylvania-based organization has several partners, including Chris Miles, who is now publisher and president of the Times Record, and George R. “Scoop” Sample III. Sample purchased the Journal Tribune in 1997. In 2002, Dennis Flaherty abruptly resigned after 22 years as publisher of the Journal Tribune. Several senior members of the Journal Tribune staff eventually resigned or were fired, too.
Sample and Miles were also involved in the Latrobe Printing & Publishing Co. purchase of The Daily News in McKeesport, Pa., in November 2004. A Dec. 1, 2004, story published in the Pittsburgh Post-Gazette said nine Daily News employees were laid off within one month of that acquisition.
Miles, who was the publisher of The Daily News at the time of the layoffs, did not return telephone calls this week or last week seeking comment about the Brunswick layoffs. Richardson said he planned to contact Miles.
“I haven’t had a chance to speak with the company, but I want to and I intend to,” he said. “Obviously, as a resident here, as DECD commissioner and as a member of the FAME board, I want to understand why this decision happened to be made.”
“Would it have been worse if we didn’t offer this tax-incentive program?” he asked. “I believe the answer is yes, but I want to talk to the owners of the paper so they can understand how the community feels about tax benefits and their responsibilities to be good corporate citizens.”
Last week’s layoffs included one reporter and several other employees.
The Times Record had been owned by Douglas Niven, whose family ran the newspaper for more than a century. After last week’s layoffs, the newspaper employs 115 people.