DAILY News Chairman Mort Zuckerman went inside the beleaguered tabloid’s newsroom yesterday morning for an interview with CNN, during which he insisted that the paper was “here to stay.”
Shortly after he left, Mark Kramer, the CEO of the Daily Snooze, dispatched a memo to all employees to let them know that the paper was halting any corporate contributions to its employees’ 401(k) plans.
Needless to say, insiders are livid.
The company has not had a pension plan since Zuckerman bought the paper from the estate of Robert Maxwell in the early 1990s.
The 401(k) was the company’s only way for the billionaire real-estate magnate to help out his valued, long-term employees in their sunset years.
The paper, which has ducked in and out of profitability in the Zuckerman era, is now said to be bleeding red ink once again, with annual losses estimated to be in the $15 million to $20 million range.
Zuckerman is expected to save just over $1 million a year by scrapping his 401(k) contributions.
In a memo to employees, Kramer said, “Last year was extremely challenging in terms of revenue for all newspapers, and difficult, to say the least, for the national economy in general.
“Unfortunately, this negative trend has continued into 2009. . . We do not know how long the current financial crisis, and the dramatic decline in advertising revenues, will continue. So we must do everything possible to ensure that we match our costs with our revenue.”
The cutoff starts with the pay period beginning Sunday.
Source suit
Source Interlink Cos. is slated to go before Judge Paul Crotty today to argue for a temporary injunction to stop Time Inc., Bauer Publications, Hachette Filipacchi, American Media and three national distributors from hiring rivals to distribute magazines that had been handled by Source.
In a lawsuit filed Monday in federal court in Manhattan, Source claimed that the four publishers, three national distributors and two rival wholesalers were involved in a “collusive anti-competitive scheme” to drive Source out of business.
Source and Anderson News had incurred the wrath of publishers when they tried to tack a 7-cent-per-copy surcharge onto the cost of each magazine that they delivered to a store.
Faced with the publisher rebellion, Anderson on Saturday said it was “ceasing normal business operations.”
Source, meanwhile, continues to fight to stay in business. Billionaire Ron Burkle, through his Yucaipa Cos. is the single largest shareholder in Source, but he does not have control of the board.
A spokeswoman for Time Inc. said of the lawsuit, “It’s completely without merit and we’ll defend ourselves vigorously.”
Last week, as the wholesale battle finally spilled into public view, OK! and Us Weekly were the only two of the seven major celebrity weeklies to make it to the shelves of virtually all the major chains, including Wal-Mart.
However, that didn’t help sales of either magazine.
Us Weekly recorded just a modest uptick, while OK! saw its sales slide continue. One possible reason is that retailers were stuffing magazines other than OK! or Us Weekly into racks that normally held People, In Touch, Life & Style, the Na tional Enquirer and Star.
It appears People was blocked from about 3,000 Wal- Marts, the nation’s largest magazine retailer most weeks.