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MINNEAPOLIS — The Star Tribune and the Newspaper Guild ended talks this week after they were unable to agree on management's request for concessions, setting the stage for a possible bankruptcy filing by Minnesota's largest newspaper.
"We're in a reactive mode right now because the company has stated that it would consider filing for bankruptcy," Graydon Royce, co-chairman for the Star Tribune's unit of the Guild, said Friday.
The company's next move was unclear Friday. Publisher Chris Harte was traveling and not immediately available for comment.
The Star Tribune was purchased in 2007 by Avista Capital Partners, a private equity firm. Since then the paper has struggled with about $400 million in long-term debt, and this fall it skipped a $9 million quarterly debt payment to senior creditors to save cash as it tried to restructure its debt.
Since 2007, the Star Tribune has made $50 million in cuts through attrition, layoffs, buyouts and other cost-cutting measures.
The paper's situation has grown more dire as the economy has worsened. In December, Harte told employees the "survival of the company" was at stake and asked labor unions to agree to $20 million in cuts by mid-January. Without those cuts, Harte said the newspaper could face bankruptcy.
Royce said the union couldn't agree with the way management wanted the cuts structured, and added that management didn't see the value of some concessions the Guild proposed.
In a memo to Guild members on Thursday, unit leaders said: "After several sessions with management, talks on possibly reaching a settlement to modify the contract have ended without agreement." The memo said management representatives "saw no reason to continue the discussions and we could not disagree with them."
The Star Tribune ranked as the nation's 15th-largest paper last October, with weekday circulation of about 322,000 and Sunday circulation of almost 521,000. The paper has nearly 1,400 employees.
