Daytona Beach, Fla.
Owner: News-Journal Corp.
Date: April 22, 2008
Updated: June 23, 2008
Trying to make the company look more profitable before it is sold, the News-Journal will lay off 99 employees in editorial, advertising, circulation, operations, purchasing, distribution and marketing.
Source: Romenesko; Paper Cuts tip and News-Journal
As you know, the company is being prepared for sale. These preparations are occurring during a major downturn for the US newspaper business, a downturn we are feeling in our market.
As part of the sales process, Cox Enterprises and News-Journal Corporation hired a sales broker and a consultant to help us prepare the company for sale. It is their recommendation that some major changes need to be made now to make the company more attractive to a potential buyer, as well as strengthen the financial condition of the company in this economic downturn.
Today we will announce those changes to you. And starting today and continuing through this week we will make the changes that we announce this morning.
We will make changes in the way The News-Journal is organized to simplify the operation and reduce costs. These changes will also bring our organization structure into alignment with the way most US newspapers are set up.
Here are the major elements of the change:
1. The creation of a production director position, with production department managers reporting to this new position. We have appointed Robert Page to be production director, and Rex Smith will succeed him as packaging and distribution manager.
2. We will move responsibility for the Business Report content to the editorial department, and also move the Business Report content employees from the advertising department to the newsroom.
3. We will eliminate the Community Relations department. Events management will be consolidated in the advertising department. Contributions management will be moved back to the front office, to be handled by Connie Fagan. NIE will continue to report to the marketing and promotion department, and we will convert NIE exclusively to the use of the electronic edition.
4. We will consolidate Marketing Development and Strategic Marketing into a new Marketing and Promotion department, headed by Lori Kopp.
5. To jump-start our on-line sales and to strategically package classified sales with on-line, we will consolidate on-line and classified advertising under current on-line manager Chris Maikisch.
6. We will make Creative Services a part of the Advertising Department.
7. We will outsource several activities that we now perform in-house, reducing headcount and overhead.
8. In conjunction with some publication changes you’ll hear about this morning our bureaus in Flagler County, New Smyrna Beach and DeLand will be closed.
1. We will discontinue publication of the West Volusia Neighbors sections and the New Smyrna Beach Daily Journal.
2. We will incorporate some localized content and zoned advertising into the local sections of the West Volusia, Southeast Volusia and Flagler editions of The News-Journal.
3. Publishing stock market results five days a week has been discontinued, instead we will enhance the capabilities of our website with additional stock market information and services.
To reduce costs we will announce over several days this week a reduction in force.
The total number of employees involved is 99.
The reduction in force will affect the editorial, advertising, circulation, creative services, operations, purchasing, distribution and community relations departments.
These will be involuntary terminations, and are only being done for economic reasons. The people being let go will be notified this week in meetings with their department head and an HR representative. Each person to be let go will be offered a severance package. The package will be:
• One week’s pay per year of service, with a maximum of 26 weeks’ pay, and a minimum of 4 weeks’ pay.
• Continued health insurance coverage under the company plan through the end of this year.
Another change put into effect, at the end of this week all rates of pay will be frozen. There will be no further pay raises given for the next 12 months, unless a new owner chooses to do otherwise.
These changes are unwelcome, but required. Unfortunately, this same scenario is playing out at many newspapers these days. The best thing we can do is stay focused on our jobs, and serving The News-Journal’s readers and advertisers. Despite the unavoidable disruptions and distractions this week, we still have jobs to do, and it is in everybody’s best interest that we do them professionally and well.
Thank you for your cooperation and hard work.
Georgia M. Kaney
By JAY STAPLETON
DAYTONA BEACH — The News-Journal Corp. and Cox Enterprises are trying to end a lengthy court battle with a settlement on how the newspaper company will be sold, according to court papers filed Monday.
A federal judge extended Monday’s deadline for the News-Journal to either pay Cox an installment of $29.2 million or file its intent to dissolve the corporation. The request made by both companies to the court to extend the deadline revealed publicly for the first time an effort to resolve the case amicably between Atlanta-based Cox and the News-Journal Corp.
The local newspaper company employs 794 people and has been owned primarily by the Davidson family for 79 years.
“The parties have agreed to a potential sale of NJC subject to certain terms and conditions,” according to the emergency motion filed Monday. “It is anticipated that it could take several months to determine whether a sale meeting the terms and conditions of the joint sale agreement can be procured.”
U.S. District Judge John Antoon II set a new deadline of Oct. 21, with status reports to be filed on the anticipated sale every 30 days.
Neither company released terms of what they’ve agreed on so far. News-Journal President/CEO and Publisher Georgia M. Kaney declined to discuss the negotiations. The agreement involves how the two entities will work together toward a sale, a Cox executive said.
If the sides agree and News-Journal Corp. is sold, it could end litigation between the parties, according to court documents.
After a meeting with company managers Monday, members of the News-Journal’s board of directors issued a statement saying they and Cox officials were pleased to announce they had agreed to work together to find a new owner.
“The owners hope that their combined effort will smooth the sales process and bring this chapter in the newspaper’s history to a mutually satisfactory close,” according to the statement. “They thank the court as well as the newspaper’s staff, advertisers and, of course, readers for affording them the time and opportunity to make this effort successful.”
Brian Cooper, executive vice president for Cox Newspapers, said working together would hopefully make a sale go more smoothly. By working together, the parties maintain some control. If the company had moved to be dissolved, a sale would have been supervised by the court.
“This gives us some time to work together to do that,” Cooper said. “It allows us to proceed.”
Asked whether he thought Cox would end up owning the newspaper, Cooper replied, “I don’t think that will happen.”
Cox, which owns numerous media holdings including 47.5 percent of the News-Journal, sued the Davidson-family controlled company in 2004. The suit was filed because Cox officials said they had not been informed of a decision to pay $13 million for naming rights of the News-Journal Center on Beach Street.
The News-Journal Corp. opted out of that lawsuit by asking a federal judge to determine the value of Cox’s shares in the company. Antoon in 2006 found the value News-Journal Corp. should pay Cox was $129 million, to be paid with an initial $29 million and five yearly installments of $20 million.
The local newspaper company, which is the eighth-largest employer in Volusia and Flagler counties, lost an appeal of that ruling, leading to the announced decision to sell on April 10.
A court order issued Sept. 27, 2006 — which requires permission from Cox or the court for certain expenditures by the company — remains in effect.