Newseum Reduces Staff in Response to Economic Downturn

The private Newseum is reducing its staff of 250 by 10 percent.
The private Newseum is reducing its staff of 250 by 10 percent. (By Bill O'leary -- The Washington Post)
  Enlarge Photo     Buy Photo
By Jacqueline Trescott
Washington Post Staff Writer
Tuesday, November 25, 2008

The economic downturn has prompted the Newseum, the sprawling attraction on Pennsylvania Avenue NW that opened in April, to reduce its staff of 250 employees by 10 percent, the institution has announced.

Museum administrators offered voluntary buyouts and 19 people accepted. In addition, two officers retired -- including Jack Hurley, the senior vice president of broadcasting -- and four vacant positions won't be filled, the Newseum said.

The museum is a private operation financed largely by the Freedom Forum, a foundation with significant stock-market investments. In the recent Wall Street turmoil, the value of the forum's endowment dropped from $600 million to $450 million, Charles L. Overby, the Newseum chief executive officer, said yesterday.

"I have been doing this job for 19 years and watched the economic cycle go up and down more than once -- I don't panic at the first sign of a drop," Overby said. "But as we watched this year, it became apparent we couldn't sit around."

"We don't anticipate any further action" in terms of downsizing, said Susan Bennett, vice president of marketing for the museum and the Freedom Forum.

Overby said that other cost-cutting options were considered, but that reducing the hours of operation was not feasible. "You have so much in the way of fixed costs. It is unclear whether closing one day a week would have an impact," he said. "We are right there on Pennsylvania Avenue and we wouldn't want to close for a day. That was never a serious option."

The Newseum is intertwined with some of the major players in the Wall Street downturn. Goldman Sachs handles the Newseum's endowment, and the broker for its construction bonds was Lehman Brothers.

The speed at which the problems in the financial sector have affected the Newseum is unusual in Washington. The majority of the local museums receive some share of their finances from the federal government. In the case of the Smithsonian, the federal appropriation is 70 percent of its annual budget. National museums such as the National Gallery of Art and the U.S. Holocaust Memorial Museum receive a combination of public and private money, and thus know they can at least afford to keep the lights on and the doors open thanks to the public dollar.

The Newseum, though, developed differently; its financing was planned after the success of a first news museum in Rosslyn. The Newseum's $50 million annual budget is derived from admission fees, private donations and funds from the Freedom Forum. The $20 admission fee for adults prompted a lot of debate in Washington, where most museums are free.

Overby said that revenue is "not the major support" of the museum. Washington area school groups are admitted free because of sponsorship from The Washington Post Co., and the top age limit for the youth admission fee of $13 was raised from 13 to 17. "We don't think we are expensive. The comment cards are good on this point," he said.

The museum has declined to release specific attendance numbers. At the opening, Overby said the goal was to "have more people visit for pay than our best year in Arlington for free." He said the attendance followed the ebb and flow of Washington tourism in general, with fewer visitors in September.

"But we are ahead of the old numbers. The most we ever had in Rosslyn was 480,000, and we will easily top 500,000 this year," Overby said.

The new headquarters, which cost $450 million to build and outfit, is a high-end complex that has apartments, a restaurant developed by chef Wolfgang Puck, and the museum, which is full of interactive exhibits, galleries, theaters and journalism artifacts. Overby said almost all of the 135 apartments are rented. And the restaurant is "going gangbusters." Each day, the museum posts newspaper front pages on its building front for perusal by passersby.

The Newseum is devoted to the media, newsgathering and the teaching of the First Amendment; it includes working studios and rental spaces with a view of the Capitol.

Like nearly every other institution in town, the Newseum is anticipating a boom in customers and dollars from the inauguration of President-elect Barack Obama. Bennett said the museum has 12,000 people booked for tours in the five days preceding the inauguration. Such news organizations as CNN, ABC, Fox and Bloomberg News have reserved Newseum space for broadcasts on Inauguration Day, so the museum will be closed to the public till 3 p.m.; it will reopen for regular visits till 10 p.m.

"People can come in at regular prices, but we are not having a party or ball," Bennett said. "We will have special inaugural exhibits and special backdrops for that day."

© 2008 The Washington Post Company