Knight discloses at annual state of the company address

A red-faced Tim Knight told Guild members that it was “none of our business” how Wrapports’ investments are faring. Knight refused to disclose how Splash, The Grid and the other $2o million spent recently in investments were doing.

Guild Executive Director Craig Rosenbaum said after Knight’s presentation, “Of course it is our business. When Wrapports investors pour $20 million into Aggrego, Grid, Splash and High School Cube and then it decides to terminate all of our photographers. What Wrapports does has a significant impact on our members.”

Knight’s refusal to disclose the financial health of Sun-Times Media’s parent company’s investments was part of the annual State of the Company address on Tuesday, Aug. 20. Knight, Jim Kirk, Ted Rilea and Paul Pham spoke to Craig Rosenbaum and members of the bargaining committee.
“Once again, I found out that Sun-Times Media is losing money but revenue made by Wrapports is still unclear. It seems management wants to keep it that way. And once again, the company representatives cry broke and want us to be satisfied with little we have,” said Guild President Dave Pollard.
Knight painted a grim picture of the media industry. Revenue, circulation and ad sales are all down, both at Sun-Times Media and nationally. At the conclusion of his address, Knight fielded questions from the Guild. Executive Director Craig Rosenbaum asked the questions on behalf of the bargaining committee.
“Why did you let the photographers go?” Rosenbaum asked.
“Management made the decision that we could find photography through other resources,” Knight answered.

“Who made the decision?” Rosenbaum responded.

“It was management’s decision,” Knight said. He looked over to Kirk. After Kirk nodded, Knight clarified, ”it was Jim’s decision.”

UPDATE: On Aug. 21, Kirk called the Guild to say that Knight “misspoke” in naming Kirk the one responsible for the photographer layoffs.

The bargaining committee asked Knight several questions ranging from whether there are planned layoffs at Pioneer Press and Aggrego staffers will replace them (“All I can tell you at is we’re always looking at everything”); whether the company would consider selling Sun-Times Media to other investors (“If someone came to me, I have a fiduciary obligation” to consider any offers); how long Sun-Times Media will continue (“That’s the question. We’re going to continue”); and whether Knight and/or Kirk will come to the bargaining table (“no”). Knight’s face grew redder with every question the Guild asked, particularly related to Wrapport’s investments.

“We’ve expressed that negotiations have come to a snail’s pace and the company seems satisfied with that. It’s unfortunate because it only hurts the company’s employees who have worked so hard to keep this company alive,” Pollard said after the State of the Company address.

Knight laid out troubling statistics about declining ad revenues and readership. Nationally, ad revenues are down 5 to 10 percent per year. At Sun-Times Media, online and print ad revenue combined was down 10 percent in 2012; down 18 percent in 2011; and was down 12 percent in 2010, Knight said.

Print revenue this year is down 16 percent and online revenue is down 28 percent, Knight said. Last year, digital advertising represented 11 percent of total advertising. It is below 10 percent this year, Pham said.

Both revenue and volume decline with company-wide circulation, Knight said. In 2010, it was down negative 7; in 2011, it was down negative 8; in 2012 it was down negative 7; and across the group this year to date is down negative 4, Knight said.

He spoke about the competitive nature of landing contracts with major advertisers. The desktop Web audience is declining, making it difficult to sell online ads other than a banner and tile slots, he said.

The digital trend in the industry is moving towards getting news through phones.

“The reality is more people are using more digital devices than ever before,” Knight said.

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