MONTEREY MAY BE AN ATTRACTIVE NUISANCE TO KNIGHT-RIDDER

Swap with Scripps adds to group's reach and its labor woes

Somewhere along the line, you probably had to read Cannery Row, John Steinbeck's lyrical novel of the denizens of the sardine fishing and packing industries of 1930s Monterey, a small town south of San Francisco. The novella always evokes warm memories from readers – it has been called "a poem, a stink, a grating noise, a quality of light, a tone, a habit, a nostalgia, a dream."

Today, Monterey is a tourist center. A world-class aquarium has been built right on the foundations of Steinbeck's canneries; a few miles away are the shopping hamlet of Carmel-by-the-Sea and the world-famous golf resorts of Pebble Beach. Monterey is a mecca for not only lovers of the sea, but also anyone interested in science, sport, art or music.

The beauty of Monterey creates an interesting dichotomy – it is a small town (33,000 population in a county of 372,000) with a cost of living more reminiscent of the big city (median price for a single-family home in 1996 was $305,000).

This dichotomy has never been more apparent than in the newspaper that serves the community – the Monterey County Herald. The audience of the community demands a sophisticated, metro-daily type paper; the advertising base and potential circulation would suggest a more modest effort.

The workers of the Herald are pretty much all lifers – they are either locals who joined the paper early in their careers, or job-hoppers who've decided to stay in the beautiful community; they are strongly union-oriented.

So when E.W. Scripps Co., the most recent owner of the Herald, asked Knight-Ridder Newspapers which Scripps papers Knight-Ridder might want to trade for the Daily Camera in Boulder, Colo., and the answer came back "Monterey and San Luis Obispo," Knight-Ridder may have gotten a bit more than it had bargained for.

Since these were asset-only transfers, Knight-Ridder was under no obligation to keep any of the employees at either property; in San Luis, a nonunion paper, this wasn't an issue. In Monterey, the traders issued a "warn letter" to union-covered employees, stating they had to reapply for their jobs. The Newspaper Guild went ballistic, issuing press releases and staging protest marches. This became something of a public relations nightmare for Knight-Ridder, which is still weathering the problems of the 11-month strike at its Detroit Free Press.

Unfortunately for the Guild, what Knight-Ridder did in Monterey was legal; unfortunately for Knight-Ridder, legal or not, the process didn't look good and probably will only cause problems down the line during negotiations not only in Monterey, but also at the San Jose Mercury News (Monterey and San Jose are in the same Guild local).

Ultimately, fewer than 50 Herald union workers didn't get jobs – about half elected not to apply and about half weren't hired. This meant that Knight-Ridder was obliged to honor its union contracts.

But Knight-Ridder needed relief; seasoned observers believe that had Knight-Ridder not had the Detroit situation hanging over its head, it would have been more aggressive in Monterey, keeping fewer than 50 percent of the workers and thereby dissolving the union contracts and lowering wages across the board. It is difficult – if not impossible – for Monterey to turn a good profit when it pays metropolitan newspaper wages.

Inside, you can read more about the Monterey situation – along with our analysis of the "clustering" concept that brought about the trades – in a piece by Senior Editor Pete Wetmore. Wetmore also addresses a proposed rule change at the Audit Bureau of Circulations, an on-line publishing opportunity that requires no work on the part of the publisher and a look at how the Star Tribune of Minneapolis has integrated new media into its very fabric. Also inside is Chris Feola's debut as one of our alternating New(s) Media columnists.

Much like the "stink" that is Cannery Row, we wonder if Knight-Ridder is going to find publishing the daily in Monterey to be a smelly proposition.

– David M. Cole

Inside ...