OC Register: We're Bankrupt, Underpay Reporters...So Let's Give Execs Bonuses!
BOOM goes the Kushner again!
Next month, execs with Tribune Publishing (owners of the Los Angeles Times), Digital First Media (owners of the Los Angeles Daily News—wait, that still exists?) and a group led by current Orange County Register publisher-CEO Rich Mirman and mega-developer Mike Harrah will gather in bankruptcy court to bid on the Reg as if it were like a limp, gaunt heifer. I haven't had as much time to follow the bankruptcy because, you know, WE JUST GOT SOLD. But yesterday, the legal team for Freedom Communications filed an interesting motion that offers a fascinating perspective on what's going on with OC's paper of record as it prepares itself to get auctioned off.
According to the motion, 32 employees have left the Reg since the paper declared bankruptcy in November, including the vice president of sales ("which has had an impact on both morale and sales," according to the filing) and 10 people from the editorial side, and that "other Employees have indicated that they are actively seeking new employment." But then comes an even more telling passage, which lays forth the Register's dirtiest secret: they pay most of their reporters jack-shit:
The Debtors’ base and benefit packages are below that of their competitors within the industry. Thus, the Debtors' past compensation practices may make them vulnerable to Employees departing at this time. As a result of the Debtors' chapter 11 filings, the upcoming sale of substantially all of their assets, and the uncertainty regarding the size and composition of the Debtors' workforce leading up to and following the sale, attracting qualified new employees at this stage in the Debtors' restructuring would be extremely challenging, if not impossible. Even if the Debtors were successful in finding qualified employees, such qualifications, alone, would not make up for the loss of the institutional knowledge and operational familiarity of the Debtors' Employees.
The solution to such low employee morale? The Reg is asking U.S. Bankruptcy Judge Mark S. Wallace to institute a severance package that constitutes to two weeks worth of pay to any employees laid off before the sale ("While the Debtors do not anticipate terminating significant additional Employees prior to the sale," a footnote states, "the Debtors reserve the rights to do so.") That's nice, but beyond that, the Register's plan to keep its ship afloat is to offer bonus packages to seven executives and seven executives only. They are identified as people expected to go above and beyond "the extensive work that must be done to facilitate the Debtors’ day-to-day operations, maintain the Debtors’ financial position and to maximize the value of the Debtors’ assets while the Debtors navigate the chapter 11 process."
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The motion states that these bonuses only go into effect if Freedom gets $42 million in the auction; if it hits that threshold, the execs will share a $500,000 bonus that can go as high as $1.5 million depending on how much the Reg gets sold for.
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The lucky 7 execs? According to a declaration filed by Mirman, that would be Freedom's Chief Financial Officer, Vice President of Operations, Vice President of Circulation, Vice President of Commentary, Senior Vice President of Content, Senior Vice President of Sales Operations, and Vice President of Sales and Marketing. I'm not sure who's who anymore at the top, but I'm sure my faithful sources will identify them, at which point I'll update.
In the meanwhile: Somewhere, former Register owner Aaron Kushner lies naked in a pile of cash, living it up with Frank McCourt...
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