Timeline of events
March 17, 2008: The Seattle Times Co., parent company of the Portland Press Herald/Maine Sunday Telegram, announces that it intends to sell its Maine media properties, the Blethen Maine Newspapers. Those properties include the Press Herald, the Kennebec Journal in Augusta, the Morning Sentinel in Waterville, MaineToday.com, The Coastal Journal in Bath and several nondaily print publications.
June 17, 2008: Blethen Maine Newspapers files suit in federal court against the Portland Newspaper Guild, which represents about 350 Press Herald employees, including advertising representatives, reporters and photographers. The dispute revolves around whether a new owner of the newspaper company would have to honor the existing union contract. The company argues that it would not, while the guild contends that it would. Uncertainty over the contract clause has delayed talks with prospective buyers, the company said.
June 26, 2008: The Press Herald announces 36 job cuts, and the closure of all four of its news bureaus, in response to a continuing decline in advertising revenues. Twenty-five employees accepted voluntary severance packages, six employees were laid off and another five jobs vacated by prior resignations were left vacant. The bureaus in Washington, D.C., Augusta, Biddeford and Bath were closed.
July 8, 2008: The Portland Newspaper Guild files motions to dismiss the lawsuit filed by Blethen Maine Newspapers in federal court. The guild contends the issue should be decided by the National Labor Relations Board instead of a federal judge.
July 18, 2008: The Portland Press Herald announces that it will layoff more employees on Aug. 18, because of worsening economic conditions. The company needs to make up for a projected shortfall of $1.2 million in the second half of 2008, or risk defaulting on bank loans. Publisher Charles Cochrane anticipates a net loss for the newspaper in 2008.
July 29, 2008: Blethen Maine Newspapers files motions in the federal lawsuit, asking the judge to rule in favor of the company. Lawyers for the company accuse Guild leadership of intentionally stalling the legal proceedings. In an affidavit filed with the company's motion for judgment, Publisher Charles Cochrane says Blethen Maine Newspapers is at risk of being dismantled altogether if a sale of the company does not happen soon.
July 30: Frank Blethen, chairman of Blethen Maine Newspapers, announces the company has signed a letter of intent with a group called Maine Media Investments. The agreement provides a limited, exclusive time period to negotiate terms of a sale. The group consists of William S. Cohen, a former U.S. senator and secretary of defense; businessman Robert Baldacci, brother of Maine Gov. John Baldacci; developer Michael Liberty; and Richard L. Connor, a Bangor native with 40 years of experience owning and operating newspapers.
Aug. 1, 2008: The Portland Newspaper Guild, through a voluntary program in which employees offered to take unpaid vacation time to help offset the need for layoffs, reaches its goal of saving six of the 20 jobs slated for elimination on Aug. 18. Publisher Charles Cochrane sends out a company-wide memorandum, indicating that because of the guild effort and a decision by management, there will be very few layoffs this month.
The publisher of the Portland Press Herald on Tuesday criticized as inaccurate media reports suggesting that Maine's largest newspaper company is about to go out of business.
In an interview and in a statement e-mailed to employees, Charles C. Cochrane, president of Blethen Maine Newspapers Inc., which publishes the Portland Press Herald/Maine Sunday Telegram and two newspapers in central Maine, said the federal court statements on which the reports were based were taken out of context.
"Blethen Maine Newspapers is not likely to be closed down soon, and that has not been asserted in the court filing," Cochrane wrote in his statement to employees.
Cochrane said he issued his statement after receiving calls from advertisers and subscribers questioning the company's future following the published and broadcast reports Monday.
Those reports were based on a court affidavit in which Cochrane describes the company's future as dire and says it could be "dismantled" and employees put out of work if Blethen Maine is not sold.
The affidavit was filed as part of an ongoing legal dispute between Blethen and its largest labor union, the Portland Newspaper Guild, which represents about 350 employees at the Press Herald and the Morning Sentinel in Waterville.
Blethen also owns the Kennebec Journal in Augusta.
The legal dispute centers on whether a new owner of the Blethen properties would have to honor the union's labor contract.
The company is currently negotiating a sale of its three newspapers with Maine Media Investments, a group that consists of William S. Cohen, a former U.S. senator and secretary of defense; businessman Robert Baldacci, brother of Maine Gov. John Baldacci; developer Michael Liberty; and Richard L. Connor, a Bangor native who is a Pennsylvania newspaper publisher.
The company argues that a new owner has no legal obligation to accept the union contract, while the union says it does. The company says the dispute has delayed a potential sale, and has asked a judge either to decide the issue or force the union to participate in immediate arbitration.
The guild contends that the issue should be heard by the National Labor Relations Board.
In his e-mail to employees, Cochrane wrote: "My declaration does say, 'without a sale, it is even possible that (the company) would be dismantled altogether, which would put all of (Blethen's) employees -- including the union's members -- out of work.' That statement is true, but it does not say that this outcome is either imminent or likely."
In an interview, Cochrane added, "I'm trying to make people understand that (the reports) mischaracterize what my declaration said. It's just really unfortunate."
Cochrane's statements in the court filing were first reported in a story published in the Press Herald on Friday. On Monday, a Portland television station, WGME-TV, and Crosscut, a Seattle Web site, cited the court documents and reported that the newspaper might be shut down.
The story was in turn picked up by The Associated Press and widely distributed.
The president of the guild, Tom Bell, echoed Cochrane's criticism of the reports.
"We're frustrated with these thinly reported stories and we have no evidence that there is a risk of the paper shutting down," said Bell, who works as a Press Herald reporter. "The information is based on a sentence. It's very hypothetical."
Robb Atkinson, the news director at WGME-TV, defended his station's coverage of the story and said it was accurate.
"It wasn't taken out of context," Atkinson said. "It is interesting to note that instead of asking for a retraction on our part, you are doing a story about the accuracy of the report. Further, the Press Herald should know better than to shoot the messenger. All News 13 did was reprint what was in a court document."
Representatives of Maine Media Investments plan to visit the company's properties today and meet with employees for the first time. In an interview, Connor said Maine Media is wholly focused on the negotiations.
"My focus right now is to attempt to complete the sale of Blethen Maine Newspapers to Maine Media Investments," Connor said. "If I don't get that done, we don't have anything to talk about."
Another member of the group, Baldacci, appeared on a local talk radio show Tuesday morning to talk about the potential sale.
Baldacci told WGAN hosts Ken Altshuler and Mike Violette that there are still "huge challenges" ahead.
"Our objective is to sit down and lay out with the unions the business plan that we think will need to be implemented," he told them. "It may involve some cutbacks. It may involve some rule changes. In exchange, we'll be entering into a partnership with them."
Baldacci also said in the radio interview that the investment group has a 60- to 90-day window for exclusive negotiations with Blethen.
The timeline is important because, according to Cochrane, Blethen's parent company, The Seattle Times Co., is on the verge of defaulting on bank loans, with quarterly reviews of their financial situation.
Since March, the Press Herald has had two rounds of layoffs, with another round scheduled to take effect Aug. 18 in an effort to cut costs.
Connor, who put together the investment group after the company announced it was for sale in March, said the group does not have a specific business plan, but has sketched out basic responsibilities.
"They are entrusting me with the news operation," Connor said. "I told them, if you want to be part of my group, then you need to understand something: I'm the newspaper guy. I'm not going to work for anybody.
"If you believe me and my thesis that we can make these (newspapers) a viable and long-term business, great. If you are looking for someone to work for you, then you are looking at the wrong guy."
Baldacci, who described Connor as "editor and publisher," said he deferred to Connor on any details about the news operation.
"It's a work in progress," Baldacci said in an interview with the Press Herald later Tuesday. "Rich has developed a very successful business model with his papers in Pennsylvania. A lot of (the Portland news operation) would dovetail off of what he's done there."
Connor said the group would stick to the basics of increasing revenue and reducing expenses. They have not released any financial information.
"I have been able to convince (Baldacci) and Bill Cohen and Mike Liberty that my 40 years of experience in this business is proof that I can -- with the right team of people -- put out high-quality newspapers that make money. It's that simple," he said.
Connor said he wanted to tap into the potential of both print and the Internet to grow the newspaper's audience. He said he plans a hands-on approach if successful in buying the company.
"We are not buying these (newspapers) to sell them," Connor said. "I intend a long-term, direct involvement with the paper."
Connor said he hasn't decided whether he would leave Pennsylvania and move to Maine if the deal goes through. He got a month-to-month lease on a one-bedroom condominium in Portland when he started putting this deal together in the spring, he said.
His wife and one of his daughters live in Pennsylvania.
Cochrane said the newspaper owners and people in the community have expressed support for the proposed deal.
"The current owners are very pleased that this buyer has come forward and they think they would do a great job," Cochrane said. "On the other hand, obviously the Seattle Times Co. does have serious financial challenges, and it's important that the owners get a competitive market price. If we can come together here, both of those things could be accomplished."
Cochrane and Bell both said Tuesday that they are "cautiously optimistic" about the possible sale. The investment group is expected to hold side talks with the union regarding the collective bargaining agreement.
Bell said the guild is working out an employee stock ownership plan with the investment group.
Staff Writer Noel K. Gallagher can be contacted at 282-8226 or at:
ngallagher@pressherald.com
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