Journalists at two dozen local newspapers across the U.S. walked off the job Monday to demand an end to painful cost-cutting measures and a change of leadership at Gannett, the country's biggest newspaper chain.
The strike involves hundreds of journalists at newspapers in eight states, including the Arizona Republic, the Austin American-Statesman, the Bergen Record, the Rochester Democrat & Chronicle, and the Palm Beach Post, according to the NewsGuild, which represents workers at more than 50 Gannett newsrooms. Gannett has said there would be no disruption to its news coverage during the strike, which will last for two days at two of the newspapers and one day for the rest.
The walkouts coincided with Gannett’s annual shareholder meeting, during which the company’s board was duly elected despite the NewsGuild-CWA union urging shareholders to withhold their votes from CEO and board chairman Mike Reed as an expression of no confidence in his leadership. Reed has overseen the company since its 2019 merger with GateHouse Media, a tumultuous period that has included layoffs and the shuttering of newsrooms. Gannett shares have dropped more than 60% since the deal closed.
Susan DeCarava, president of the The NewsGuild of New York, called the shareholder meeting “a slap in the face to the hundreds of Gannett journalists who are on strike today.”
“Gannett CEO Mike Reed didn’t have a word to say to the scores of journalists whose livelihoods he’s destroyed, nor to the communities who have lost their primary news source thanks to his mismanagement,” DeCarava said in a statement.
In legal filing, the NewsGuild said Gannett's leadership has gutted newsrooms and cut back on coverage to service a massive debt load. Cost-cutting has also included forced furloughs and suspension of 401-K contributions.
“We want people in our local community to know what this company is doing to local news, and we want Gannett shareholders to know what Gannett is doing to local news,” said Chris Damien, a criminal justice reporter and unit guild chair the Desert Sun, which covers Palm Springs and the surrounding Coachella Valley in Southern California.
Gannett Chief Communications Officer Lark-Marie Anton said the company disagreed with union's recommendation to vote against Reed.
“During a very challenging time for our industry and economy, Gannett strives to provide competitive wages, benefits, and meaningful opportunities for all our valued employees,” Anton said in a statement.
The Gannett strike coincided with an open-ended strike being staged by 250 unionized U.S. employees at Insider Inc., a global company that publishes Business Insider. Members of the Insider Union, which formed in April 2021 and is represented by The NewsGuild of New York, called the strike after failing to reach a first contract agreement with the company.
Some of Gannett's striking newsrooms are negotiating contracts and accuse the company of dragging its feet, but Anton said the company continues to negotiate fairly.
Among the contract demands are a base annual salary of $60,000. The median pay for Gannett employee in 2022 was $51,035, according to the company’s proxy filing. Reed’s total annual compensation was valued at nearly $3.4 million, down from $7.7 million in 2021.
At the shareholder meeting, NewsGuild-CWA President Jon Schleuss said the union proposed lowering Gannett's median CEO-to-employee ratio from 66:1 to 20:1. But Schleuss said the meeting last just eight minutes and Reed didn't address any questions. In a series of tweets, Schleuss called the meeting a "complete joke.”
Gannett, which owns USA Today and more than 200 other daily U.S. newspapers with print editions, announced last August that it would lay off newsroom staff to lower costs as it struggles with declining revenue amid a downturn in ad sales and customer subscriptions.
The newspaper industry has struggled for years with such challenges, as advertising shifts from print to digital, and readers abandon local newspapers for online sources of information and entertainment. Major newspapers such as The New York Times, The Wall Street Journal and The Washington Post have gained substantial digital audiences for coverage of broad topics, but regional and local papers have struggled to replicate that success in narrower markets.
In its first quarter earnings report this year, Gannett said its digital subscriptions had grown 15% year-over-year, and revenue from digital circulation grew 20%. The company reported a $10.3 million profit versus a $3 million loss in the same period last year, although revenue fell by 10.6%. The company also reported repaying $37 million in debt.
According to the NewsGuild, Gannett's workforce has shrunk 47% in the last three years due to layoffs and attrition. At some newspapers, the union said the headcount has fallen by as much as 90%.
The Arizona Republic, for example, has gone from 140 newsroom employees in 2018 to 89 this year, the NewsGuild said. The Austin American-Statesman's newsroom shrunk during that period from 110 employees in 2018 to 41 this year.
Some newspapers have forsaken coverage of local sports or business, the union said. Reporters have had to take on several unrelated beats. Some publications have dropped local news coverage altogether to focus on regional news.
Rick Edmonds, a media business analyst for the Poynter Institute, said that while the union isn't powerful enough to prevent layoffs, the strike shows it has gained momentum.
Schleuss said 18 Gannett newsrooms have unionized in the last five years. Two more newsrooms voted to unionize Monday: the Athens Banner-Herald and the Savannah Morning News, both in Georgia.
Ukrainian President Volodymyr Zelenskyy has signed an application for Ukraine's membership in the European Union, pleading with the bloc to accept this request. It comes as Russian forces push further into Ukraine, forcing at least half a million refugees to flee. Benjamin Schmitt, Postdoctoral Research Fellow at Harvard University and Senior Fellow at the Center for European Policy Analysis, breaks down the latest in Ukraine.
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Wall Street took another sharp swing Wednesday, this time back to rally mode, as stocks and Treasury yields rose even as U.S. crude oil prices climbed to the highest level in more than a decade.
The S&P 500 rose 1.9%, recouping its losses from earlier in the week, after Federal Reserve Chair Jerome Powell said he supports a more modest rise in interest rates this month than some investors had feared. He also said he still expects inflation, which is at its highest level in 40 years, to moderate through the year.
“Although we’ve had some Fed governors lately saying ‘Oh my God, this is such a huge crisis,’ the conventional wisdom is slow and steady wins the race right now,” said J.J. Kinahan, chief strategist with TD Ameritrade.
The comments helped drive the market higher, adding to modest gains from earlier in the morning. Other areas of the market also gained ground a day after worries about Russia’s invasion of Ukraine sent the S&P 500 tumbling 1.5% and prices soaring for all kinds of commodities.
Treasury yields jumped to recover some of their steep losses from the past week. Gold receded, and a measure of nervousness among stock investors on Wall Street eased after swinging sharply in recent days.
“We’ve seen wild swings, but not major changes in the indexes,” said Jeff Kleintop, chief global investment strategist at Charles Schwab. “Geopolitical conflicts can be very unsettling, but you don’t tend to get bear markets from these, just periods of volatility.”
Markets have been spinning wildly as investors try, sometimes blindly, to gauge how high Russia's attack on Ukraine will push prices for oil, wheat and other commodities where the region is a major producer. On top of that are worries about what upcoming hikes in interest rates by the Federal Reserve and other central banks around the world will do to the economy and inflation.
Powell said in testimony to Congress that the Fed is set to raise its key interest rate for the first time since 2018. But he also said the attack on Ukraine may have muddied conditions, with its impact on the U.S. economy “highly uncertain,” adding that “we're never on autopilot.”
The Fed is balancing a tightrope where it needs to raise interest rates enough to rein in the highest inflation in generations but not so much that it pushes the economy into a recession. All the while, higher interest rates tend to put downward pressure on stocks and most other investments.
The yield on the 10-year Treasury leaped to 1.89% from 1.72% late Tuesday, while the two-year Treasury surged to 1.53% from 1.31%. Yields, though, remain well below where they were before Russia’s invasion. The 10-year yield was above 2% last month, before it plunged as investors plowed into investments seen as safer amid worries about war.
The price of U.S. oil jumped another 7% to $110.60 per barrel, the highest level in just over a decade. Brent crude, the international standard, climbed 7.6% to $112.93 per barrel.
Leaders of OPEC and other major oil-producing countries decided Wednesday to stick with their plan to gradually increase oil production. The OPEC+ coalition of oil producers, made up of OPEC members led by Saudi Arabia and non-cartel members led by Russia, chose to increase oil production by 400,000 barrels per day in April.
The move follows a perhaps less impactful decision by the United States and other major governments in the International Energy Agency to release 60 million barrels from strategic reserves to boost supplies.
“Markets dismissed the notion that 60 million barrels of strategic reserves released will be consequential to the risks of Russian supply jeopardized,” Tan Boon Heng of Mizuho Bank said in a report. “Russia pumps more than that in just six days.”
In the stock market, all the uncertainty about oil prices and inflation has led to big swings not only by the day but also by the hour. The S&P 500 swung between gains of 0.4% and 2.2% Wednesday. It closed 80.28 points higher to 4,386.54.
The Dow Jones Industrial Average rose 596.40 points, or 1.8%, to 33,891.35, while the Nasdaq composite gained 219.56 points, or 1.6%, to 13,752.02.
More than 90% of stocks in the S&P 500 rose, with technology, financial and health care companies accounting for a big share of the rally. Bank stocks led the gainers, climbing 2.6%, as higher longer-term interest rates can mean bigger profits for them making loans. Energy stocks also helped lift the index as they rode higher energy prices.
Ross Stores climbed 6.1% after the retail chain reported stronger profit for its last quarter than analysts expected.
Ford jumped 8.4% after it said it was accelerating its transformation into an electric-vehicle company and split its EV and internal combustion operations into two individual businesses.
Stock markets around the world were mixed. France’s CAC 40 rose 1.6%, Germany’s DAX returned 0.7% and Japan’s Nikkei 225 fell 1.7%.
Russia’s central bank said stock trading on the Moscow exchange would remain closed Wednesday for a third day, though trading of currencies and precious metals would resume for the first time this week.
Late Tuesday, President Joe Biden announced he was joining U.S. allies in closing the country’s air space to Russian aircraft, the latest in a set of sanctions and other measures meant to isolate Russia.
But Biden also said in his annual State of the Union speech that he would try to cushion Americans against the impact of higher oil prices. “I will use every tool at our disposal to protect American businesses and consumers,” Biden said.
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