by Max Brantley
Employees at the Democrat-Gazette, which has just been through a round of layoffs, reductions in hours and other cost-cutting moves, got a memo from the publisher about the outlook this year. Cloudy, but not as bad as many others in the business.
UPDATE: A TV watcher/media critic e-mails a comment relevant to the topic:
Max, you need to do an item on the craven hypocrites at KATV.
After refusing to even answer the phones about ANYTHING since their own employee holocaust, those hypocritical f***s ran a major segment Tuesday on Walter's layoffs. I don't give the D*G credit for much of anything, but they DID cover their own layoffs.
What he said.
TO: All Newspaper Employees
FROM: Walter E. Hussman Jr.
SUBJECT: 401(k)/Profit Sharing Plan
Because of the economic downturn, many companies have elected not to contribute to the 401(k) plans for 2008 and 2009.
As you know, our company is having to take unprecedented actions to reduce our costs due to rapidly deteriorating advertising revenues for us and all other newspapers and media.
In trying to determine what to do about our 401(k) plan, we have taken multiple factors into account. Although our companies were severely impacted towards the end of the year, we did better in the earlier part of 2008, and for the overall year, our newspapers still operated with a profit. While many companies have heavy debt loads, our company does not. While some companies are strapped for cash, we are in better financial shape than many of our peers.
We are also mindful of our philosophy to put readers first, advertisers second, employees third, creditors fourth, and shareholders fifth. While our shareholders will receive their regular dividends of 10% of net income, we believe at this time our employees should receive more. We have therefore made the decision to allocate 15% of our newspaper profits for 2008 to our 401(k) and profit sharing plan.
This means we will be able to fully fund the 401(k) match for 2008. In addition, we will still have more to contribute to the profit sharing plan for 2008, although this will be down from previous years.
As we enter 2009, the year is starting much worse than 2008, and we do not know how long or how severe the recession will be or how negative the impact will be on us.
In order to be conservative and prudent, and to minimize other cost reductions, we intend at this point not to fund the 401(k) plan for 2009. Employees should not count on the company funding this, as we may not be able to make the match. However, if we have as profitable a year in 2009 as we had in 2008, we reserve the option to change our mind and decide after 2009 to fund it.
These are difficult times, but we remain committed to publishing quality newspapers that can survive and be sustainable for the long term. We appreciate everyone's sacrifice and help in achieving these goals.