Magazine article Editor & Publisher

Daily News Arbitrator's Award Set Aside

Magazine article Editor & Publisher

Daily News Arbitrator's Award Set Aside

Article excerpt

Deliverers union plans to appeal federal court decision that would save the paper a cool 52.5 million

Despite a personal 19-million-dollar contribution from co-owner Mortimer Zuckerman last year, the New York Daily News is too cash-poor to pay its delivery drivers wage increases awarded in arbitration, a federal judge said last week.

The revelations came in an opinion unsealed Dec. 2, disclosing the privately owned tabloid's confidential financial information.

The Daily News reported losses and negative cash flow in three of the six years from 1993 to 1998. After the 19-million-dollar contribution from Zuckerman in 1998, the paper still had a negative cash flow of 127,000 dollars that year, according to the opinion by U.S. District Court Judge Thomas P. Griesa.

The Daily News was "extremely gratified" by Griesa's decision, Zuckerman said in a statement. "This decision lets us use our resources in a way that will enable us to continue our commitment to editorial quality, to serve our readers and protect our employees. We now have the opportunity to grow the Daily News as we intended," the statement read.

J. Warren Mangan, a lawyer for the Newspaper and Mail Deliverers Union, said the union plans to appeal the decision.

In tossing out the award, Griesa said the arbitrator "manifestly disregarded" critical financial information suggesting the award would have forced the Daily News, already in dire straits, into bankruptcy and to close its doors.

The arbitrator's March 8 ruling granted a 16.9 percent raise over 18 months to the union's 400 drivers, bringing their base pay to about 912 dollars a week.

The paper's eight other craft unions had agreed to less than 3 percent raises, but would have stood to gain the same raises if the arbitrator's ruling had been upheld. All in all, the paper would have had to fork over 52.5 million dollars through 2005.

The Daily News, which weathered bankruptcy in 1991, has endured financial uncertainty ever since, with unexpected printing-press bills coming on top of capital investments and the launch of an expanded Sunday edition.

After reporting positive cash flow of 33 million dollars in 1993 and 20 million dollars in 1994, the Daily News sustained a whopping 52-million dollar cash-flow loss in 1995. …

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