Archive for the ‘The News & Observer’ Category

N&O copy desk saluted

Wednesday, June 8th, 2011

Andy Bechtel, a copy editor who teaches at the School of Journalism and Mass Communication at UNC-Chapel Hill and writes The Editor’s Desk blog, offers a tribute to N&O copy editors and designers, whose jobs were eliminated in favor a production center in Charlotte this week (see the post below).

“I am sad for my former colleagues, and I worry about the quality of the newspaper that I still read every day,” he writes. “I am also angry that hard-working journalists must bear the brunt of McClatchy’s debt and business decisions.”

Among the many Facebook comments he posts, surely from a reporter: “Who’ll save my ass now?”

McClatchy consolidating Carolinas copy desk

Tuesday, June 7th, 2011

Update: Not 24 hours after telling his copy editors and designers their jobs were being eliminated, N&O Senior VP/Executive Editor John Drescher set the weekly staff meeting for hours before designers and copy editors come in for the day. Looks like they’re not his problem any more.

——– Original Message ——–
Subject: Weekly meeting today…
Date: Tue, 7 Jun 2011 09:33:38 -0400
From: John Drescher <>

at 2 pm in the McDaniels conference room.

And, from The N&O’s Afternoon Update today, why copy editors are important:

Thousands of marijuana plants discovered in Chatham
Authorities discovered 1,784 marijuana plants growing in southern Chatham County on June 1, the sheriff’s office said.
Updated Jun. 7, 2011 8:21 AM | Full Story

(Emphasis ours.)


Managers at the The News & Observer in Raleigh told about 25 copy editors and page designers on Monday that their jobs were being transferred to a new production hub at the Charlotte Observer. The move is to start over the summer and be fully in effect by mid-September.

The Charlotte production center will produce The N&O and its 10 community papers, including The Chapel Hill News, The Cary News and The Herald in Smithfield. The Charlotte copy desk already prepares The Herald of nearby Rock Hill, S.C.

Look for McClatchy’s South Carolina papers, including The State in Columbia and the Sun News in Myrtle Beach, to eventually be added to the Charlotte production hub, though their managers are waging the same futile fight against it that The N&O’s management lost.

N&O employees will be able to move to positions in Charlotte and get a $5,000 relocation stipend plus one week’s pay per year worked with The N&O, up to 13 weeks.

Some Raleigh copy desk managers will lose their supervisory duties and take pay cuts as Charlotte takes over, and others at the top of their pay ranges may see their pay cut or frozen, a company memo says. Pay cuts are not to exceed 10 percent and would come at the end of the year.

Those who don’t want to move will get the standard severance package of two week’s pay per year worked up to 26 weeks and COBRA insurance assistance. All Charlotte copy desk employees are being offered buyouts with the same deal.

Many of the copy editors and designers now in Raleigh are veteran workers (because most of the young workers have been laid off already) with ties to the community and are not expected to move. This will allow McClatchy to hire new and younger designers and copy editors for less money or make do with fewer.

The move is another attempt to bail water instead of repairing the ship. McClatchy is incrementally merging the Charlotte and Raleigh papers, having already merged the Sports and Features  departments and the Capital bureau in Raleigh, but hasn’t shown what it will take to make the big, final, inevitable move.

Most positions are being physically moved toward Charlotte instead of to the state capital because the Charlotte office building inherited when McClatchy bought the paper from Knight Ridder is vastly superior to the dingy offices of The N&O in Raleigh. And because Charlotte managers continuously prevail in negotiations with N&O brass.

CBS vs. newspapers = WRAL vs. The N&O

Thursday, March 10th, 2011

A story about CBS’s plan to go after local newspapers and “make [the] company’s single-market websites into the new local newspapers” points at Raleigh and how WRAL’s site tops The News & Observer’s.

“[T]he dynamic in the broader Raleigh, N.C., market is remarkable,” MediaPost’s TV Watch blog said today. “Capitol Broadcasting Co.’s site for CBS affiliate WRAL-TV has greater Web traffic than the local News & Observer, which emphasized the Web at a considerable level before many other papers.”

CBS CEO Leslie Moonves told investors on Monday, “We think we can replace the Yellow Pages, replace the newspaper. … [W]hen you get up in the morning, you should be able to turn on that local CBS website and get everything you would need — everything that would be provided by your newspaper.”

Newspapers got a head start on the Web because it’s easy to post text and photos. But video, which CBS outlets have plenty of, is the key going forward, the blog says. People are “less willing to read lengthy articles. They’re hungry for info chunks. …

On Thursday, was streaming a murder trial live [the trial of Brad Cooper of Cary for killing his wife]. And a site visitor’s attention was immediately drawn to the one-click opportunity to get inside the courtroom. On the News & Observer site, there was a story about the case that took some scrolling to find. Pretty telling?”

News & Observer to drop 20 positions

Wednesday, January 19th, 2011

The News & Observer is cutting 20 positions, explaining that “the slowly recovering economy continues to hurt ad sales.”

Most N&O staff members will also be required to take five days of unpaid time off by April 18.

The losses at the Raleigh McClatchy paper are to be “across its operations,” and will include about five in the newsroom. A copy desk supervisor in Sports has announced he’ll leave, and movie/pop culture critic Craig D. Lindsey has been let go. An assigning editor is leaving (it’s not been announced publicly, yet) and the positions of a rank-and-file copy editor in the Raleigh office – the Charlotte and Raleigh copy desks are one – and a reporter will be eliminated. If volunteers don’t step forward, seniority will dictate who goes.

How long, we have to wonder, does The N&O’s advertising department fail to meet revenue goals before the paper’s publisher quits blaming the economy and realizes it’s the people running the show – management – who aren’t getting the job done.

Publisher Orage Quarles III could talk to anyone who no longer works for his advertising department, no longer fears reprisal, and they could tell him how  productivity is stifled and morale is quashed by a management style that relies on threats, insults and verbal abuse.

News & Observer records solid first quarter

Tuesday, April 6th, 2010

Employees at The News & Observer in Raleigh fearing a new round of cuts with the end of the year’s first quarter were able to exhale Monday. A memo  to employees from Publisher Orage Quarles III says the newspaper exceeded “budgeted goals in all categories” during the first three months of 2010.

The note gives few details, but credits “better than expected advertising revenue performance and a continued focus on expenses.” The Advertising Department’s “third annual online sales blitz” racked up “more than $1 million in annualized sales,” Quarles adds.

“There are still question marks about the economy and its effect on our ad revenues, but we are seeing signs that the worst may be behind us.  We certainly hope so,” the memo says.

N&O eliminates 21 positions, SacBee axes 25

Monday, January 11th, 2010

The News & Observer announced the elimination of 21 positions this morning, including 10 from the newsroom. The Sacramento Bee, another McClatchy newspaper, announced the elimination of 25 positions.

The reductions represent “the latest cuts as the media company rides out a sharp decline in revenue,”  The N&O’s report says.

In a memo to the newsroom, Managing Editor John Drescher said five newsroom employees in single-incumbent jobs — meaning they are the only ones who do their jobs — were told today their last day at the newspaper will be January 29. In addition, five employees from  photo, design, copy editing and news research must come forward to have their positions eliminated or staff members will be let go according to seniority.

“We continue to operate in a time of great challenge at The News & Observer, at The McClatchy Company and within the newspaper industry,” N&O Publisher Orage Quarles III said in his announcement to staff. “While we have already implemented a number of cost-control and reorganization measures, revenues continue to show losses, and we must reduce our expenses until we are again showing growth.”

In December, McClatchy CEO Gary Pruitt said all of the company’s daily papers were making a profit. Pruitt also said at the time that more cost reduction, in the high-20 percent range, would be necessary in 2010.

In addition to the ongoing decline of the newspaper industry, McClatchy has been burdened by about $2 billion in debt acquired mostly in its  2006 acquisition of Knight Ridder. The company has wiped out some $1.4 billion of the debt over the last four years, according to a previous Editor & Publisher report.

The N&O has 524 full-time positions today, down from 704 a year ago, according to the newspaper’s report about today’s layoffs. The newspaper last year also cut wages, suspended contributions to retirement plans and required unpaid furloughs for its staff.

Last year, The N&O had layoffs or buyouts in April and August, after a previous round in October 2008 and various other jobs eliminated earlier.

Quarles told his reporter today that it’s too soon to say whether there could be more cuts this year, a decision that will hinge mostly on how much ad sales rebound.

“I know that these announcements are distracting and disruptive, and I apologize for that,” Quarles’ e-mail said. “We can only ask, with utmost respect and gratitude for all that you do, that everyone stays focused and continues to work hard to help our company continue to make its way through these difficult times.”

“This is another sad day,” Drescher said.

McClatchy restructured a portion of its debt in December and has seen its stock price double since.  It rose 25 cents Monday, topping $5 to settle at $5.14 a share at closing.

“When it announces its latest earnings next week, McClatchy is expected to report that fourth-quarter revenue fell by a percentage in the low-to-mid-20s, compared with a 28 percent drop in the third quarter,” The N&O today.

Today’s top news: $5 off at CVS

Wednesday, December 23rd, 2009

In what is surely a first, The News & Observer has run a front-page gatefold, an extension of a full-page advertisement on the back of a section that wraps around part of the front, this one obscuring 1A news and headlines.


Community newspaper publisher in bankruptcy

Tuesday, December 22nd, 2009

Heartland Publications LLC, publisher of 50 community newspapers, has filed for bankruptcy with the expectation that it will complete  financial recapitalization by early spring, RTT News reports.

Among its 20 newspapers in North Carolina, the Connecticut-based company publishes the Apex Herald, Fuquay-Varina Independent, Holly Springs Sun,  Garner News and Cleveland Post in the Triangle.

The News & Observer established two newspapers in 2009 that compete with Heartland:  the Southwest Wake News, covering Apex, Fuquay-Varina and Holly Springs, and the Garner-Clayton Record. They are among  nine free community newspapers published in the Triangle by the McClatchy Newspapers company.

Heartland, whose newspapers are all “paid publications,” according to its Web site,  has “reportedly … failed to make payment on its $161 million of first- and second-lien secured loans between December 2008 and February 2009,” RTT News says.

Heartland said “its publications will continue to operate without interruption, and all advertising and circulation agreements will continue as earlier. ‘Our readers, advertisers, and other business associates will see no change in our day-to-day operations,'” said Michael Bush, president and chief executive officer. The company says it has sufficient funds and positive cash flow to pay its ongoing expenses for the foreseeable future.

Note: The Associated Press report about Heartland posted by Editor & Publisher says the company “publishes 23 paid-circulation daily newspapers, along with several weekly and free publications.”

The AP also says, “the company’s top lender, GE Capital, has agreed to reduce what it is owed to $70 million from roughly $111 million. In exchange, the financial-services arm of the industrial conglomerate General Electric Co. would get a 90 percent stake in the company.”

N&O employee sales contest nets 245+ orders

Friday, December 4th, 2009

The News & Observer’s move to draft all of its employees to sell subscriptions has resulted in more than 245 paid orders sold by 65 employees, VP for Circulation Jim Puryear told The N&O’s staff in an e-mail Friday.

The paper is paying  “commissions totaling a whopping $10,000” in  December 11 paychecks. And because the contest exceeded its goal of 200 paid orders, gift cards worth a total  of $550 went to  four salesmen.

One of the “salesmen” taking home a gift card was reporter Matt Ehlers, who ran a classified ad in The N&O and on Craigslist in his effort to sell subscriptions.

The contest’s top seller — not Ehlers — sold 66 subscriptions.

The contest began October 1 and ran through November 23, with subscriptions sold at a discount. Employees earned a 50 percent commission on each sale.

McClatchy: All’s well with pension

Wednesday, December 2nd, 2009

Update: The Sacramento Bee, McClatchy’s flagship newspaper, says the firm expects its pension plan to lose $32 million in a fraud scheme and the losses “will not jeopardize the overall health of our pension plan.”


The McClatchy Company is responding to blog posts at McClatchy Watch and picked up buy us about a $78 million loss in its pension fund because of investments with a company being investigated for fraud.

“While the stories are certainly alarming, it is important to understand that the potential loss associated with this fund in no way jeopardizes the health of the pension plan,” New & Observer Publisher Orage Quarles III said in an e-mail to his staff Wednesday. “The pension plan is more than able to withstand the losses associated with the Westridge investment.”

Quarles concludes by promising, “I will continue to keep you apprised of the situation as new developments arise. Again, I would like to reiterate that your pension plan is safe and there is no cause for alarm. Please let me know if you have any questions.”

He directed staff members to the McClatchy intranet site, which carries the following:

McClatchy Pension Plan Investment with Westridge

Dec. 1, 2009 – Various websites are reporting information about a McClatchy Company Retirement Plan investment that suffered losses as a result of a Wall Street scandal involving Westridge Capital Management. These posts suggest that the loss has somehow imperiled our pension plan. While it is true that our pension plan does have an investment in Westridge (an investment inherited as a result of the Knight Ridder acquisition in 2006), the amount is relatively small given the nearly $1 billion in assets held by our pension plan. In addition, we do expect to make a partial recovery of these funds through a legal process that is well under way. Any losses our pension plan may ultimately suffer as a result of this situation will not jeopardize the overall health of our pension plan, which is broadly diversified and generating healthy returns. Moreover, the anticipated loss and our expected recovery were previously and appropriately accounted for and publicly disclosed earlier this year.

Here are the facts related to The McClatchy Company Retirement Plan and its investment with Westridge:

>> As mentioned above, The McClatchy Company Retirement Plan inherited the investment in the Westridge fund, which was an S&P 500 enhanced index fund, with McClatchy’s 2006 acquisition of Knight Ridder and the Knight Ridder Pension Plan.

>> On Dec. 19, 2008 –- prior to any knowledge of potential problems or allegations of fraud –- McClatchy management decided to leave the fund and requested a full redemption of our pension plan’s investment. The redemption required a six-month notice period and, as a result, was not executed before discovery of the alleged fraud and the seizure of the Westridge fund by the Securities and Exchange Commission (SEC) and its ultimate turnover to a court-appointed receiver.

>> As of Jan. 31, 2009, The McClatchy Company Retirement Plan had $64.4 million invested with Westridge.

>> In February 2009, the FBI arrested two New York men, Paul Greenwood and Stephen Walsh, who were principals of the Westridge fund. The two have been charged with running a fraudulent trading and investment scheme through companies they controlled, including Westridge Capital Management. The two are accused of misappropriating hundreds of millions of dollars of investor funds to finance their lavish lifestyles.

>> Based on published reports, many other firms and institutions also had investments with Westridge, including Wells Fargo & Co., the Sacramento County Employees’ Retirement System, Carnegie Mellon University and the Iowa Public Employees’ Retirement System.

>> McClatchy publicly and appropriately disclosed and reported the misappropriation soon after we were informed of the issue in our 2008 Form 10-K, which was filed with the SEC in February 2009. At that time, based on the knowledge we had, we estimated our recovery of these investment funds to be only $15 million.

>> In the pension plan’s Form 5500 filed in October 2009 with the U.S. Department of Labor, we took the most conservative approach in reporting the total loss from this investment of about $77.8 million, which reflects the combination of market-related losses from the beginning of 2008 and fraud and dishonesty. However, based on our most recent communications with the court-appointed receiver about our potential recovery, as well the value of the investment on Jan. 31, 2009, McClatchy expects that loss to be closer to $32 million.

>> McClatchy’s pension plan investments earned healthy returns of 22.05 percent for the first nine months of 2009. Total assets in the retirement plan as of Sept. 30, 2009, were $970.5 million.

>> McClatchy is actively pursuing our pension plan’s claim through the legal process and court proceedings, and we now expect to recover a substantial portion of the plan’s investment. However, because this issue is still being litigated in both criminal and civil proceedings, the actual recovery remains uncertain and we are unable to comment further at this time.