The management of The Washington Star has emerged from a bruising battle with its employes' unions possessing broader powers and latitude to revamp the newspaper, reduce its financial losses and seek new readers and advertisers, according to newspaper analysts and officials familiar with the labor negotiations.
"We'll turn a profit within the next five years," Star Publisher George W. Hoyt said yesterday. Star officials have previously disclosed that the newspaper lost $7.2 million in the first 11 months of 1978 and is expected to incur a $16 million deficit this year, despite the newly approved labor contracts with its 11 employe unions.
Not all newspaper analysts share Hoyt's optimism. But many news media analysts and union officials say they regard the new contracts as a considerable gain for The Star's management and a blow to the unions.
"You've got to count it as a victory for them [The Star's management]," said John Morton, a newspaper analyst for the stock brokerage firm of John Muir & Co. "It will probably cut their losses over time. I don't think it's going to make them profitable by any stretch of the imagination." The key question, Morton added, is whether The Star will stem its circulation and advertising decline and begin to show signs of a turnabout.
Some news media analysts and union officials say The Star appears likely to step up its current drive for suburban readers and advertisers through increased daily coverage of community news in its locally "zoned" editions. The Star now publishes five "zoned" editions in Northern Irginia, suburban Maryland and the District of Columbia.
Hoyt confirmed that The Star plans further efforts to build up its five community editions and said that the new labor agreements will help, in part, to clear the way. "Some of the flexibilities that we received [in the new union contracts] are going to let us do a better job of zoning," he said.
Hoyt and union leaders cited a provision of a new Teamsters contract that allows The Star more latitude to change its newspaper delivery routes to mesh with the "zoned" editions.
Hoyt came to The Star after running a suburban Chicago newspaper chain for Time Inc., the publishing company that bought The Star last year. Yesterday hoyt noted that the Chicago venture, Pioneer Press Inc., persuaded him that a "Tremendous void" exists in the way most metro-politan daily newspapers cover suburban communities where many readers live and shop. Newspaper analysts note that high-income suburban markets are often attractive to advertisers.
Union leaders who have taken part in the recent round of Star negotiations also say The Star is seriously considering the option of publishing a morning edition on weekdays, as it already does on weekends. Such a move, they say, could take the form of getting The Star's first "capital" edition on the streets at an earlier hour than now, shifting to a 24-hour-a-day schedule of morning and evening papers, or possibly competing directly against The Washington Post by publishing only morning editions.
Some newspaper analysts say they regard the option of morning Star publication as a long-term prospect that may pose severe risks of steep initial financial losses and eventual failure.
Hoyt confirmed yesterday that a morning Star was "an option" within the next five years, but he added, "No decision has been made." Provisions permitting publication and delivery of morning Star editions have been included in key union contracts.
While The Star's management has portrayed the new labor agreements as promising bright prospect for the newspaper, union leaders say openly that they got clobbered during the recent round of negotiations. "Every union gave up areas that they would not give up under normal circumstances," said Ronald L. Warren, business representative for Teamsters employes at The Star. "You think you did a good job (as a union negotiator) by not losing everything."
Warren noted, as did other union officials, that the unions bowed to many of management's demands only because of The Star's threat of a New Year's Day shutdown. "It was the only game in town where if you lose you win," Warren said.
Time Inc. had threatened to close the newspaper permanently unless all 11 unions representing about 1,270 full-time Star employes had accepted stringently modified new contracts by Sunday. The deadline was extended slightly after the printers' union -- the last to approve a contract -- obtained a federal court injunction temporarily barring That Star from shutting down.
While union leaders have conceded they took a beating in the negotiations, The Star's management has publicly acknowledged that the newspaper faces tough problems. At one point near the end of the negotiations, The Star warned it was preparing to file for bankruptcy.
Time Inc. President James R. Shepley said in a speech to union leaders last month that The Washington Post -- which he termed The Star's "formidable competitor" -- now has "80 percent of the newspaper ad revenue of this market." He said The Star has received an "intolerable" volume of complaints from subscribers who say their daily papers have not been delivered. He described part of The Star's electronic printing system as a "chewing gum and baling wire operation that won't go on much longer."
Time Inc. has pledged, however, to invest $60 million in The Star during the next five years, and Hoyt has pointed to two major gains for the newspaper as a result of the new labor agreements -- some assurance that The Star will have five years of labor stability and new "management flexibility" to make changes in operations without union restrictions.
From the viewpoint of the major unions at The Star, the losses have been clear. The printers' local, Columbia Typographical Union No. 101, conceded that 80 of its 175 to 185 members at The Star would have to quit their jobs by June -- a demand from which The Star's management never budged. The pressmens's union, Newspaper and Graphic Communications Union Local 6, agreed to reductions in "manning" -- the number of employes assigned to run a press.
The washington-Baltimore Newspaper Guild, which represents about 475 news, advertising, clerical and other white-collar workers, accepted relatively small guaranteed pay raises for about 225 top-salaried employes, a partial freeze of basic wage schedules, a no-strike clause, a provision permitting more use of soutside freelance writers and other encroachments by management on what the union considered its territory.
Teamsters Local 639, which represents more than 400 circulation route managers, newspaper delivery truck drivers and other blue-collar workers, conceded to management the right to make unrestricted changes in circulation routes and to hire nonunion employes.
Mailers Local 25, which represents about 70 workers who sort and bundle newspapers for delivery, agreed to a compromise on a controversial proposal allowing The Star to subcontract with private firms for work similar to that currently performed by union members.
For the printers' and pressmen's unions -- the last two to reach settlements with The Star -- the negotiations touched on deeply emotional issurd. Pressmen's union leaders say the new contract will reduce work for part-time Star pressmen, many of whom lost jobs after a bitter 1975 strike that led to the union's ouster from The Washington Post.
Printers' union officials charged that The Star was seeking to abrogate key provisions of a 1974 apreement that guaranteed lifetime jobs for Star printers.
Some union negotiators note, however, that the unions' losses in the negotiations were partly offset by what they view as acceptable pay increases for some Star workers and the promise by Time Inc. that The Star will have at least a reasonable chance for survival.
The unions' concessions were the outcome of an extraordinary down-to-the-wire bargaining showdown that some officials feared, at times, was heading for an impasse that would mean The Star's demise. "I was scared to death at one point they'd blow it," one key negotiator remarked yesterday, echoing worries that had been expessed by others on both sides throughout the talks.
Management made clear that it had one underlying strategy -- to turn on the pressure and keep tightening it. First came The Star's request to the unions that they agree to renegotiate their existing contracts; then the threat of a New Year's Day shutdown, and, finally, the preparation to declare bankruptcy and the cancellation of Monday's editions of The Star.
Hoyt said yesterday that management had decided to set Sunday's bargaining deadline in order to avoid a similar round of negotiations late this year, when 10 of the 11 unions' contracts had been dur to expire. If The Star waited until then, Hoyt noted, the newspaper might have faced the threat of a shutdown as a result of a union strike.
Hoyt and Shepley have both said that The Star could not recover from a prolonged shutdown, and Hoyt argued yesterday that The Star could not ask Time Inc., a publicly held corporation, to invest more money in the newspaper without stronger asurance it would survive.
The unions followed widely varying bargaining tactics. The two largest Star employe unions, The Newspaper Guild and the Teamsters, pressed for rapid settlements in hopes of gaining concessions from The Star's negotiators.
The printers' and pressmen's unions -- two with the most to lose in the bargaining -- went to the mat. The difference in negotiating strategies, in part, reflected divergent views among union leaders about whether Time Inc.'s threat to close The Star was a bluff.
Newspaper Guild leaders said they could not afford to view the shutdown threat as a bluff. "Even if my inner bones say this is a bluff, I would sure hate to call that bluff," one guild negotiator remarked a month ago. The printers' union took the opposite stand, asserting that the Star was bluffing. "We have not and do not believe that you intend to close the Star," union president William J. Boarman said in a Dec. 22 letter.
On Sunday, the pressmen's union, in fact, voted down a "final" management offer and prepared for the newspaper to fold. "We just assumed he [hoyt] didn't want to publish -- that he wanted to close it down and blame it on the unions," said pressmen's union negotiator Raphael F. Collins. This time, management made a key concession and the union ratified a contract.
Printer's Union representatives said they decided the company wasn't bluffing when it announced it was preparing to file for bankruptcy on Sunday. The printer's became the last union to reach a settlement with the company.