Michigan media outlets facing more layoffs, uncertainty

The economic downturn and declining fortunes of traditional media organizations are continuing to take its toll on Michigan news outlets. Among those facing an uncertain future are papers and television stations owned by the Journal Register Co., Young Broadcasting and Gannett.

Tuesday, a federal bankruptcy court in New York cleared the way for the Pennsylvania-based Journal Register Co., which owns The Oakland Press and The Macomb Daily, among other outlets in Michigan, to move forward with a restructuring plan. The bankrupt company has been looking for buyer for its Michigan newspaper holdings. It announced last week it had sold off its holdings in Lapeer County to JAMS Media LLC.

The Chapter 11 plan ruled on Tuesday, The New Haven Independent reports, includes:

… a plan to pay about $1.3 million to managers in exchange for duties including firing scores of employees, closing newspapers (referred to as “shutdown bonuses”) and remaining with the company.

Connecticut Attorney General Richard Blumenthal who was one of three parties challenging the bankruptcy plan, was not happy with the ruling.

This decision means that bankruptcy is no bar against bloated big-time bonuses. The unfortunate bankruptcy court ruling means that JRC executives will be substantially rewarded more than $1.3 million in blatantly undeserved bonuses for shutting down newspapers and laying off employees. … While most employees lose their jobs for poor performance, JRC executives will be paid extra for failure — causing job losses and shuttering offices.

In his 32-page ruling, Judge Allan L. Gropper wrote:

“In a handwritten letter received by the Court on July 1, 2009, an employee of the Debtors {JRC} questioned the fairness of the Incentive Plan on the ground that many employees have been forced to take substantial pay cuts, and the Incentive Plan fails to reward the efforts of all of the Debtors’ employees. Although the Court understands such concerns and the sacrifices that many employees have made, it has no legal authority to order the Debtors to provide for a different Incentive Plan.”

Meanwhile, employees at Lansing’s WLNS television station are awaiting the outcome of a planned auction of parent company Young Broadcasting’s stations, including WLNS. The bankruptcy auction, which was set for Tuesday, has been postponed until next Tuesday.

According to TVNEWSDAY, three companies have risen to the top of speculation of having serious interest in buying the bankrupt media company’s stations: Local TV LLC, Nexstar Broadcasting Group and Silver Point Capital.

TVNEWSDAY’s article also contains a detailed analysis of the three groups interested in snatching up Young’s assets.

Also in Lansing, employees of the Lansing State Journal are bracing for another round of layoffs by its parent company Gannett, the nation’s largest newspaper chain. Various media sources have said the Gannett layoffs nationwide could be anywhere from 1,000 to 4,500 people.

Gannett, which also owns the Free Press in Detroit, the Times Herald in Port Huron, the Daily Press & Argus in Livingston County and The Enquirer in Battle Creek has been paring down its work force over the last couple of years.

Gannett’s ABC television affiliate in Grand Rapids, WZZM-TV, announced this week that it is entering into a strategic content-sharing partnership with the CBS affiliate in Kalamazoo (WWMT-TV) and NBC affiliate in Grand Rapids (WOOD-TV).