JRCO cut 50% of papers, 15% of jobs
Details of the unsuccessful effort to avoid default on the company’s debt are contained in the documents supporting the bankruptcy petition filed Friday in Manhattan. The petition seeks to reorganize JRCO as a privately held firm owned by the lenders holding the company’s $646.3 million in debt.
The extent of the cutting at the company in the last year is revealed by comparing its 2007 annual report with the affidavit filed in support of the bankruptcy petition by James Hall, the company’s chief executive. The comparison reveals:
:: The company has shrunk to 159 non-daily newspapers today from 321 titles at the end of 2007, representing a 50.5% reduction.
:: The number of full-time equivalent employees dropped to 3,465 today from 4,100 at the end of 2007, reflecting a 15.5% decline.
:: The number of daily newspapers fell to 20 from 22 as the result of the sale last year of the properties in New Britain and Bristol, CT.
Some of the headcount reduction would have been associated with the sale of the Connecticut properties, but Hall’s affidavit states that the company sought economies throughout its operations in the last year by eliminating “duplicative efforts in outside sales, inside sales, production, operations, editorial and circulation.”
Even prior to the declines in circulation and advertising that have caused many publishers to streamline their operations, Journal Register was known as being perhaps the most tight-fisted operator in the newspaper industry.
The company’s lean – and some say mean – operating philosophy was enforced by Robert Jelenic, its founder and long-time chief executive officer. Stricken with cancer, Jelenic resigned in November, 2007, and died 13 months later.
When he departed the company, Jelenic was awarded more than $6.3 million in salary, severance and other compensation. Evidently some of the pay was deferred, as his estate is listed in the bankruptcy documents as being owed up to $749,311.