The New York Daily News recently eliminated half of its newsroom staff, allegedly saying the move was necessary for “re-focusing much of our talent on breaking news.”
But in all likelihood, those reporters’ jobs were sacrificed to cover the hole created by paying Michael Ferro — the disgraced former chairman of New York Daily News parent company Tronc — a $15 million lump sum payment.
Earlier this year, Ferro was accused of sexual harassment by two female business associates, and resigned prior to the story coming out. The account of events described by Fortune showed how Ferro lured the two women, who both made their accusations on the record, into one-on-one meetings under the pretense of doing business before moving on them inappropriately. Tronc nonetheless retained its consulting contract with Ferro, paying him $5 million/year through 2020. However, according to Deadspin, that $15 million was instead paid out all at once and expensed against the company’s earnings, putting the company into the red and forcing it to cut costs.
Deadspin’s Albert Burneko described the process “class fucking warfare” at the hands of “a small handful of executive- and investor-class vampires.”
“The journalists who lost their livelihoods today in effect had their salaries and benefits re-routed to Michael Ferro’s bank accounts,” Burneko wrote. “Against their wills, they were made to pay him for being a fucking pig.”
Because many of the Daily News staff already focused heavily on covering breaking news, Tronc’s explanation of why it was cutting its newsroom staff in half to “re-focus” on breaking news suddenly falls apart, given the context of the payment to Ferro. Former Daily News employees told New York Magazine that in addition to their assigned beats, they were already responsible for writing several breaking news stories each day.
“The one outlet in this city that has always been going full force on breaking news, more than any other in the city, is the Daily News. Not a single reporter did not have breaking-news duties,” Pulitzer Prize-winning Daily News journalist Sarah Ryley told New York.
If Deadspin is correct in that Ferro’s $15 million was paid out all at once and expensed against Tronc’s earnings, it would also be true that the reporters Tronc laid off this week would still have jobs were it not for the payment to Ferro. Data from Glassdoor shows that the average reporter’s salary at the New York Daily News is roughly $65,000, going as low as $45,000 and as high as $98,000. Even if the 40 journalists laid off at the Daily News each made $98,000, that would only amount to $3.92 million.
The slow death of local reporting and community-based journalism at the expense of millions of dollars paid to executives who make bad decisions will ultimately continue until local papers are freed of their bondage to predatory hedge funds and vulture capitalists. While many solutions have been floated, like persuading local philanthropists in various cities to team up and collectively buy the city’s paper and allow it to operate as it sees fit, it’s clear that unchecked rampant capitalism and local journalism don’t mix.
Nick Jewell is a freelance political writer, and a proud resident of Bed-Stuy, Brooklyn. Email him at email@example.com.