Leaders of the largest union at the Portland Press Herald/Maine Sunday Telegram have agreed to contract concessions that could pave the way for the sale of Blethen Maine Newspapers to an investment group led by Bangor native Richard Connor.
The Portland Newspaper Guild announced to members Friday in a hastily called meeting that Connor has secured the financing to make the purchase, and that a package of wage concessions and other changes would be voted on next Friday.
There is some urgency in the union vote, guild leaders said, because a 2 percent wage increase for members is scheduled to take effect June 1. Friday's vote will determine whether that wage increase is suspended and whether to put in place a new contract that will meet the demands of those financing the purchase.
The new contract calls for a 10 percent pay cut, a suspension of retirement and 401(k) contributions by the company and a two-year wage freeze.
In exchange, employees would be part of an employee stock ownership plan, or ESOP, that would give them a 15 percent stake in the new company.
The union's executive board voted unanimously in favor of the tentative agreement with MaineToday Media Inc., a collaboration between Connor and HM Capital, a private equity firm in Dallas.
Connor currently is editor and publisher of the Times Leader newspaper in Wilkes-Barre, Pa.
He has been trying to buy the Blethen Maine properties since last summer. Blethen owns three daily newspapers, the Portland Press Herald/Maine Sunday Telegram, the Kennebec Journal in Augusta and the Morning Sentinel in Waterville. The company's Maine Today division produces several Web sites and print publications, including The Coastal Journal in Bath and The Maine Switch.
The Portland Newspaper Guild, which represents about 300 workers at the Portland Press Herald/Maine Sunday Telegram and roughly 18 at the Morning Sentinel, would be awarded two of the seven to nine seats on the company's board of directors. A third seat would be allocated to a representative from the company's other unions.
The new guild contract, brokered over months of talks between union leadership and members of Connor's group, comes at a time of unprecedented challenges in the newspaper industry.
Daily newspapers have folded, media companies have declared bankruptcy, and others have demanded employee wage cuts and other concessions to survive. Readership has shown declines in many markets, but the most serious problems have been the result of a huge drop in classified advertising and the overall slowdown in the economy, particularly in the real estate and automotive industries, which are vital advertising sectors for newspapers.
Connor, however, said he is confident the newspapers here can prosper. He has invested some of his net worth in the venture.
"There is usually an opportunity for an entrepreneur and an entrepreneurial team such as the one I plan to build here to make a difference in a business when they can make all the decisions on the spot, locally," he said.
"We're not afraid to try new things and try them quickly. That's somewhat different than how the industry works currently."
Regarding the progress of the sale, Connor said: "What's happening every day now is ... we are literally checking off a list of things that have to be done to complete the sale, and a number of things were checked off that list (Friday) that bring us one step closer to completing the acquisition," he said.
Connor said the group is trying to acquire the Blethen Maine properties by next Friday, the day of the guild vote, but the legal paperwork might not be in place until after that.
"We also had very good discussions with the bank (Friday). We have the money raised. Right now, everything has to be put in proper legal form," Connor said.
Among other tasks, the prospective owners have been determining which employees...
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