Although details have yet to emerge, early morning bargaining sessions with the 600-member Newspaper Guild at the Boston Globe appear to have resulted in a deal involving big pay cuts, layoffs, and weaker job guarantees to cut at least $20 million from its costs. But if my calculations are correct, that means the Globe will lose $65 million this year instead of $85 million. That does not seem like a good result -- just less bad than before. Then again, things are not good at the other end of the media spectrum as Clear Channel Communications, home of Rush Limbaugh, is inches from bankruptcy.

The New York Times (NYT) is losing money and demanded that its money-losing Globe cut $20 million by May 2. That deadline came and went but by May 3, two of its seven unions had agreed to $7.5 million in cost cuts. The Newspaper Guild claims it had proposed a plan that would have cut over $10 million that day but Globe management rejected it -- probably because it preserved lifetime job guarantees for newsroom staff with over 17 years tenure. So they went back to the bargaining table and reportedly reached an agreement that looks like it will keep the Globe open.

Meanwhile, the home of the $400 million Rush Limbaugh is in serious financial trouble. Clear Channel's revenue dropped 23 percent in the first quarter and cash flow collapsed by 47 percent. Clear Channel cut 590 people last Wednesday on top of the 1,850 it cut earlier in the year. And with $22 billion in debt and a need to pay $1.3 billion in interest expense, its $1.4 billion in cash may be just enough to let it survive for the year -- unless revenues plunge even more. It may escape the fate of conservative Tribune Company which Sam Zell threw into bankruptcy after paying $8.2 billion and assuming $5 billion more of its existing debt

My point is that this media depression is an equal opportunity destroyer of old business strategies. And unless The Globe makes a radical adjustment to the new business realities, it may not last the year without additional cuts. As I posted, that radical adjustment would require a big drop in the number of people who get the dead-tree version of The Globe through an enormous price increase for those who still demand it. My proposal would also end the free Internet version of The Globe.

Is there a role for newspapers in our future? Probably not in their current form. But America needs well-funded and staffed investigative reporting and although the White House has signaled that there won't be any bailout money for newspapers, I believe the industry may need a bit of tough love -- along the lines of what the auto industry is now getting -- coupled with some cash. Meanwhile, Senator John Kerry will host a hearing this afternoon on these issues.

To survive, The Globe will need to do more than cut another $20 million. And for Clear Channel to survive, Rush Limbaugh may need to cut a bit of fat out of his $400 million pay packet as well.

Update. Details of the Newspaper Guild's contract are emerging -- the proposal is to take a an 8.3 percent wage cut, an additional five day furlough without pay, and an end to lifetime job guarantees for 190 Guild members.

Peter Cohan is president of Peter S. Cohan & Associates. He also and is the author of You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.


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