Proving that they know how to spin a story, the Miami Herald‘s management team put out a relatively rosy statement Tuesday explaining that reporters at the 117-year old newspaper will, for the foreseeable future, be required to work from home. But one unionized reporter took issue with the official statement and criticized the Herald’s decision to close its offices and move to a virtual newsroom.
The office closure will last at least through the end of 2020, because, after the coronavirus pandemic, the Herald’s management team has found that the reporting staff can work effectively outside the newsroom.
“The coronavirus pandemic has accelerated our organization’s ability to work remotely. Since mid-March, most of us have been working from home,” said Herald President and executive editor Aminda Marqués González. “From pandemic to protests, we haven’t skipped a beat thanks to technology, communication tools that connect us instantaneously and the hard work of our dedicated staff.”
Marqués González acknowledged “financial headwinds” as one of the reasons behind the decision, but repeated the claim that the main reason for the decision to close the newsroom is because the COVID-19 outbreak will likely change the way the newsroom will function in the future.
“We know that the office space of today is not what the office space will be for tomorrow as it relates to social distancing and keeping our employees safe. For that reason, Miami Herald and el Nuevo Herald employees will continue to work remotely through the end of the year,” González added.
But as with most things coming out of the Miami Herald, there’s a lot more to the story they aren’t telling you.
Unionized reporter Mary Ellen Klas, the Herald‘s Tallahassee Bureau Chief, isn’t toeing the company line. She shared additional details on her Facebook page that undercut the explanation provided by Marqués González. Klas claimed that reporters at the paper only learned the news Tuesday morning that the offices would be closed effectively in August, and that the Herald’s parent company, McClatchy, “has filed paperwork in bankruptcy court” to reject the lease for seven of the 30 newspapers it owns, including the Herald.
Klas didn’t stop there. She criticized the decision to close the newsroom, a move that would save the company tens of thousands of dollars in rent, claiming it “makes no sense.”
Klas’s comments underscored the bitter differences between the union and the newspaper’s management team, which is now anticipating a potential takeover bid of the Herald’s parent company McClatchy by New Jersey based hedge fund Chatham Asset Management. Chatham has a history of buying distressed media companies and changing their corporate culture to adapt them to the new media landscape. With that in mind, it couldn’t be more obvious why Marqués González closed the newsroom: it was a huge waste of money.
Traditional reporters, and the papers at which they work, long ago grew accustomed to wielding significant power and influence over their communities. But they have not adjusted well to the internet age, where niche digital outlets like The Capitolist can compete head-to-head with the Herald for readers, at a fraction of the Herald’s operating budget. This trend, combined with a major shift in advertising dollars from newspapers to social media and search companies, has undercut the business model of local newspapers like the Herald. This, in turn, drastically reduces their influence and power.
If Chatham Asset Management succeeds in taking over the Miami Herald, the hedge fund’s management team will look for ways to reduce costs far beyond the modest measures taken by Marqués González. That’s because the Herald and its parent company, McClatchy, are consistently losing money now that their business model is no longer viable.
The first rule of any business is that it needs to be profitable. Many reporters – especially unionized liberal reporters – fail to acknowledge that cash flow is the life blood of any business. For whatever reason, many reporters think this rule shouldn’t apply to newspapers and journalism – that people should fund their special brand of journalism because it’s “so important.”
Klas herself seems to think wealthy South Floridians should pool their money together so that she can continue to draw a salary for her reporting and the Herald can continue business as usual. She took a direct shot at Chatham on Facebook:
“A hedge fund with a history of gutting local newspapers, Chatham Asset Management, will bid on becoming the new owner of McClatchy in a bankruptcy auction,” Klas wrote. “Journalists of the Miami Herald and el Nuevo Herald are not ready to accept that fate and are in search of a coalition of local owners who can offer a competing bid to preserve our paper.”
But Klas and her union comrades aren’t likely to find a suitor anytime soon. That’s because McClatchy would have to agree to sell off the Miami Herald to a local buyer – something that isn’t likely in the midst of a bankruptcy proceeding with millions of dollars in pension liabilities in dispute. In effect, Klas and her comrades are asking Miami’s wealthiest residents to enter into a bargain where they’ll pay the pensions of long-retired Miami Herald staffers, as well as the current salaries of the existing staff, in exchange for news stories that cost far more to produce than what the competition is paying.
When Chatham Asset Management is already offering the Herald a financial lifeline, Miami’s top-tier investor class is undoubtedly wondering why they should buy the cow when they can get the milk for free.