UPDATE 2-Boston Globe union approves pay cut, concessions

Mon Jul 20, 2009 10:33pm EDT

* Globe approves concessions 366-179

* Concessions include $10 mln in pay cuts, other givebacks (Adds details on Boston Red Sox, Worcester newspaper)

By Robert MacMillan

NEW YORK, July 20 (Reuters) - The Boston Globe's largest union voted by a nearly 2-to-1 margin on Monday to approve pay cuts and other concessions that would save the 137-year-old paper $10 million a year and allow The New York Times Co (NYT.N) to sell it.

The Boston Newspaper Guild voted 366-179 in favor of the cuts. "It has been a long and difficult period for everyone and we hope that we can now work with prospective buyers to help The Boston Globe carry on with its vital mission to promote good journalism and protect free speech," guild President Dan Totten said in a statement on Monday.

The agreement ended more than three months of bad blood between the union and the Globe. The Times Co had threatened to close the daily, one of the largest and most respected in the United States, if it could not get the concessions.

"We deeply appreciate the sacrifices that guild members are making to help sustain The Boston Globe's mission of delivering high-quality journalism to the greater Boston community," Globe spokesman Robert Powers said in an e-mailed statement.

Under the terms of the deal, union members will take a 5.94 percent salary cut and other benefits will be scaled back. They will also be subject to unpaid furloughs and a pension freeze. Some members will lose lifetime job guarantees.

Union members in June rejected a previous agreement, which would have cut pay by more than 8 percent. The Globe responded by threatening to cut pay by about 23 percent before negotiations resumed on the new package.

Although the guild tentatively agreed to support the new package in June, doubts had arisen in recent days that its members would vote for it.

THREE POTENTIAL BUYERS EXPRESS INTEREST

The guild is the last and largest of several unions to agree to the cuts. With its agreement in hand, the Times Co likely will try to find a buyer for the Globe, which it said probably would book an $85 million operating loss this year, absent $20 million in savings that it sought from its unions.

Three potential bidders have expressed interest in the paper, including Stephen Pagliuca, a managing director at private equity firm Bain Capital and co-owner of the Boston Celtics basketball team.

The Times Co paid $1.1 billion in 1993 to buy the Globe. Now, its value, according to analysts, ranges from as high as $250 million to zero.

The Times, which reports its quarterly financial results on Thursday, is dealing like other U.S. newspaper publishers with plunging advertising revenue and falling circulation as more people get their news online.

It must also pay off hundreds of millions in debt during the next few years, forcing the Sulzberger family that controls the paper into selling assets, including its classical music radio station, and borrowing money from Mexican billionaire Carlos Slim to stay afloat.

The Times also wants to find a buyer for its other properties in Massachusetts, including its stake in the holding company that owns the Boston Red Sox baseball team, and its other paper in the state, the Worcester Telegram-Gazette. (Additional reporting by Phil Wahba; Editing by Peter Cooney)

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