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Originally published Thursday, January 17, 2013 at 8:45 AM

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Union agrees to bargain to help save Philly papers

The union representing journalists at Philadelphia's two major newspapers said Thursday that it will bargain a new contract to help prevent the troubled company from being liquidated.

Associated Press

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PHILADELPHIA —

The union representing journalists at Philadelphia's two major newspapers said Thursday that it will bargain a new contract to help prevent the troubled company from being liquidated.

Local Newspaper Guild leaders made the announcement after meeting with executives of Interstate General Media LLC, the group that owns The Philadelphia Inquirer, Daily News and the website Philly.com.

Interstate had threatened last week to liquidate or sell its assets unless it got new labor agreements with all 11 unions by Friday, according to the Guild.

Ten unions have been working without contracts since October; the current Guild contract expires next October. On Thursday, the Guild agreed to negotiate a new deal while keeping current provisions in force.

"We were convinced that they were seriously considering selling off parts of the company," said Guild acting president Howard Gensler, a Daily News gossip columnist. "Our sense was that if we agreed to come to the table, they would not pursue liquidation at this time."

The company declined to comment.

For years now, the newspaper industry has been savaged by rising costs and declining advertising revenue as readers increasingly consume news for free online.

The Philadelphia newspapers have recently endured especially tumultuous times, with five owners since 2006.

Interstate General Media, made up several powerful local business leaders, bought the cash-strapped newspapers and website in April for about $55 million. The purchase included a printing plant in suburban Philadelphia.

The new owners pledged patience and an extra $10 million for newsroom operations even as they conceded the company hadn't made money for years. They said overall revenue had dropped from about $500 million six years ago to half that, while costs had not declined nearly that much.

Shortly after taking over, the company asked Guild members for $8 million in wage and benefit concessions, but the union refused to reopen its contract. The Guild represents about 500 newsroom, advertising and circulation employees.

Union executive director Bill Ross said the company will lessen the $8 million demand when new bargaining begins Friday, though he did not offer a new figure.

If a new agreement cannot be reached or ratified, the existing contract stays in effect until its expiration nine months from now.

Teamsters Local 628 President John Laigaie said Thursday that his unit, which represents about 340 delivery drivers, security officers and building service workers, has reached a tentative agreement with Interstate that includes givebacks. Members plan to vote next week.

"The concessions we've made are really a reflection of what the business is right now," Laigaie said. "They've shown (us) the numbers, and they're not good."

The Guild and Teamsters are the papers' two largest unions. The status of negotiations with the other nine units was not immediately clear Thursday.

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