October 8, 2008 / 3:24 AM / 10 years ago

UPDATE 1-New Jersey's Star-Ledger will not be sold-memo

(Adds comment from publisher memo, background, byline)

By Robert MacMillan

NEW YORK, Oct 7 (Reuters) - The Star-Ledger of Newark, New Jersey, the 15th largest U.S. newspaper by circulation, will not be sold after one of its unions agreed to concessions that the paper said will allow it to stay in business.

The Star-Ledger, one of the two largest daily newspapers serving the densely populated regions of northern New Jersey outside New York City, had faced being sold or being shut down as soon as next year.

“I am pleased and relieved that the drivers union voted today 161 to 6 to approve the tentative agreement that has been reached between The Star-Ledger and union officials,” Publisher George Arwady wrote in a memo to employees that was provided to Reuters by two sources.

Gaining the support of the union is the third goal that the paper needed to reach to avoid a sale or being shut down by parent company Advance Publications, an arm of the privately held magazine and newspaper publishing empire Conde Nast.

Advance also owns other large U.S. daily papers such as The Oregonian in Portland, Oregon, and the Times-Picayune in New Orleans, Louisiana.

The Star-Ledger had already secured the support of a mailer’s union and had received more than 200 applications for buyouts from its non-union personnel. It was unclear what concessions the paper was asking for, and officials did not return telephone calls seeking comment.

The paper does not disclose its finances, but The Wall Street Journal reported on its Website on Tuesday that it could lose $40 million this year. Arwady was not immediately available to comment on that figure.

The agreement with the drivers union means that the paper likely will go forward with the buyouts. The paper’s officials did not respond to requests for comment on the total size of the paper’s staff, but the buyout is likely to significantly reduce the size of the paper’s editorial operations, according to sources inside the paper.

The Star-Ledger is the latest case of U.S. newspapers undertaking severe reductions in staff so they can continue bringing in enough cash to fund operations despite drastic declines in advertising revenue.

This year alone, major U.S. newspaper publishers from The Washington Post WPO.N and The New York Times Co (NYT.N) to Tribune Co have bought out or laid of staffers.

The Journal reported on yet another round of cuts coming to the Los Angeles Times, which is owned by Tribune Co. Several of the papers’ employees confirmed this. One high-ranking editor, Leo Wolinsky, who had served twice as managing editor of the paper, was among the casualties, he said.

McClatchy Co (MNI.N), which publishes The Miami Herald and Sacramento Bee, said it would cut 20 percent of its workforce. USA Today Publisher Gannett Co Inc (GCI.N) earlier this summer said it would eliminate 1,000 jobs.

Newspapers are trying to save costs as ad revenue leaks away to the Internet and fewer people buy their papers. The Star-Ledger’s average weekday paid circulation has fallen 7.4 percent to 345,130 as of March 2008, while Sunday circulation has fallen 12.3 percent to 500,382, according to figures provided by the U.S. Audit Bureau of Circulations. (Editing by Lincoln Feast)

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