Update, Feb. 23: Last Friday, MediaNews Group’s holding company announced that it is out of Chapter 11 bankruptcy protection.

Here’s a short item on this from E&P.

Meanwhile, life marches on for our newsroom Guild unit, where we’re preparing to enter contract bargaining later this year. Our next general membership meeting will be:

7 p.m. Monday, April 5

at the CWA Hall

1831 Park Blvd., Oakland

Since we’ll begin negotiating for our next contract in late summer-early fall, we need your help and ideas now to shape our next agreement with management. Come by the meeting and let us know what your priorities are in the next contract, and how you think we should go about getting those things. You can also send us an e-mail or share your thoughts with a shop steward.

At our next meeting, we’ll also be assembling the bargaining committee that will be negotiating with management. If you’re interested in helping out that way, please attend next month or send us a note.

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Update, Feb. 2: The MediaNews bankruptcy marches ahead.

So far, proceedings in Delaware bankruptcy court seem to agree with the idea that Chapter 11 proceedings will be limited to MNG’s holding company, Affiliated Media Inc., and will not affect employees or union contracts.

David R. Hock of Cohen, Weiss and Simon represented The Newspaper Guild/ Communications Workers of America locals at the first day hearing on Jan. 26. It appears the pre-packaged bankruptcy will come to a swift conclusion, heading for confirmation without objection on March 4.

The U.S. Trustee is not inclined to convene a creditors’ committee. Local counsel of record will keep us updated on any court filings.

What the bankruptcy documents have shown so far:

• Hearst loses its $300-$400 million investment in MNG, but will get warrants that someday could be converted to stock.
• MediaNews President Jody Lodovic and Chairman and CEO Dean Singleton will continue to control the company post-bankruptcy.
• Under the reorganization plan, Singleton gets $634,000 in annual salary, an annual bonus of up to $500,000, and another $360,000 in salary from the Denver Post Corp. (Read AP’s story here).
• Lodovic gets $1 million in annual salary and an annual bonus of up to $500,000. He already got $500,000 in bonuses for leading the reorganization, and stands to get an extra $250,000 bonus when the bankruptcy is official.

Guild attorneys will continue to monitor the proceedings, including scouring all local agreements and pension plans for any mention of Affiliated Media.

The full text of the bankruptcy disclosure statement can be read here.

Consolidation with the Chronicle?

At this point, a main concern for all of us should be whether this bankruptcy will pave the way for even more consolidation — including a potential merger of the Bay Area News Group with the San Francisco Chronicle.

Singleton has been open about his desire to pursue more aggressive consolidation post-bankruptcy, telling the Washington Post that to imagine where such mergers might occur, “You can look at the map.”

As blogger Alan Mutter notes, “The long-running losses at the Chronicle, plus the MediaNews bankruptcy, may be sufficient to persuade regulators that an antitrust waiver is necessary to sustain journalism in Northern California.”  (Read the rest of his piece here.)
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Update, Jan. 19: Last week, we all received an email from Dean Singleton stating that MediaNews has, in consultation with its lenders, created a “prepackaged” bankruptcy filing for its holding company, Affiliated Media Inc. Filing could come as early as this week.

The official documents and the resulting hearings should provide more details of the arrangement, including the new ownership structure, and what, if any, compensation Hearst will receive for relinquishing its stake in the company. In the meantime, MediaNews has promised that neither workers nor daily operations of our newspapers will be affected by the bankruptcy, and we intend to hold them at their word.

What the Guild is doing on our end:

The Newspaper Guild has represented workers at five newspaper company bankruptcies, and in every case, employees continue to work and get paid, noted Carol Rothman, secretary-treasurer of TNG. “None of the guild properties have been affected any more drastically than anyone who is not in bankruptcy,” said Rothman.

The Guild has hired a law firm that specializes in bankruptcy to monitor workers’ interests as the filing proceeds, and representatives across the country are gathering relevant financial information.

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By now you’ve all seen the news that MediaNews has, in consultation with its lenders, created a “prepackaged”  bankruptcy filing for its holding company, Affiliated Media Inc. That means instead of filing and then dealing with the debt afterward, there is already a plan to address the debts owed to creditors.

The company has said that daily newspaper operations will not be affected, and employees will continue to receive pay and benefits as usual. At this point, we have no reason to disbelieve these statements.

That said, we are taking the situation very seriously, seeking research and resources from the highest level of the Guild – and plan to hold the company to its promises. We have retained legal counsel with expertise in bankruptcy proceedings and will take all necessary steps to ensure our voice is heard and the interests of our members and retirees are protected.

Earlier this week our Newspaper Guild staff began pulling together research and resources on restructuring scenarios. Carol Rothman, the Guild’s secretary-treasurer, has made herself available to run through various scenarios related to the debt restructuring and to answer questions about what might happen next.

“The Guild, with help from CWA, has been proactive in addressing bankruptcies in our industry. Being named to the creditors’ committee in five cases is one example. We must get our members, locals and contracts through to the other end of this process, with some confidence that they can influence the results,” Rothman said.

It’s important to note that, unlike many of the high-profile media company bankruptcies, the company that operates our papers is not planning to file for bankruptcy reorganization.  Rather, the MediaNews holding company — Affiliated Media Inc. – is filing. In general, a holding company controls a company’s stock and oversees top management but does not run day-to-day operations. According to the company’s statements, the debt to be restructured is related largely to past purchases of newspapers, not bills to local vendors at individual properties.

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