The Star Beacon; Ashtabula, Ohio

February 22, 2013

News-Herald to be sold, future of employees uncertain

By CARL E. FEATHER - cfeather@starbeacon.com
Star Beacon

April 17 looms as a “final edition” for employees of The Journal Register Co., which owns the News-Herald newspaper in Willoughby.

That’s the day sale of the newspaper is scheduled for closing and when 217 people at the News-Herald and its sister paper in Lorain, the Morning Journal, will lose their jobs.

The Ohio Department of Job and Family Services has posted the impending layoffs on its Worker Adjustment Retraining Notification Act website. Further, employees have received letters from The Journal Register Co. in a Chapter 11 bankruptcy that was filed in September 2012. It was the company’s second bankruptcy filing.

According to the blog of John Paton, chief executive officer of Digital First Media, parent company of The Journal Register Co., the company emerged from its 2009 restructuring with $225 million in “debt and with a legacy cost structure, which includes leases, defined benefit pensions and other liabilities that are now unsustainable and threaten the company’s efforts for a successful digital transformation.”

Paton has championed the concept of newspapers being entirely digital, but the transformation has been expensive. His blog entry from Sept. 5 states that expenses related to digital were up 151 percent from 2009. Print advertising revenues declined 19 percent from 2009 to 2011, and that category of revenue represents more than half of the company’s revenues.

A letter sent to employees from Robert Monteleone, chief human resources officer for the Journal Register, informed the newspapers’ workers that the buyer will decide which of them will be re-hired after the purchase. Workers face weeks of uncertainty in the interim, and they worry that the action would reset their benefits, if any, to the status of a new hire.

The News Herald made a strong push into Ashtabula County in 1999 when it opened a bureau in Ashtabula and staffed it with three reporters. The company pulled its bureau, which was down to one reporter and a clerical person, out of Ashtabula in 2006.

According to the Plain Dealer, 21st CMH Acquisition Co. is an affiliate of Alden Global Capital, a New York hedge fund. 21st CMH Acquisition was the sole bidder for the Journal Register in the bankruptcy action.

The News Herald’s operation is located on Route 20 in Willoughby.