MediaNews memo to staff

TO: MNG/MNGi Employees
FROM: Dean Singleton and Jody Lodovic
SUBJECT: 2009 is almost gone. Thanks for getting us through it!

First and foremost, let us thank you for your hard work and dedication during this difficult economic period, a time particularly hard for the newspaper industry. You have been asked to do more with less, and we truly appreciate your efforts and sacrifices.

While the past three years have been particularly challenging (especially 2009) for MediaNews Group and the newspaper industry, we are proud of your performance and many accomplishments, and we are confident that our strategies will lead us and the industry into a bright future. Let us highlight just a few of your/our accomplishments during this challenging period:

• Advertising - While advertising revenue has been severely challenged, your performance has been near the top of the industry throughout 2009. For the three-month period ended September, for example, your advertising revenue declined 24% as compared to the industry decline of 28.2%. This performance was consistent with the first two quarters. Furthermore, in markets such as St. Paul, the Bay Area, and Los Angeles, we significantly outperformed other newspapers in the regions.

We have made significant progress in transforming our sales organization and have invested in new tools, such as iShare, training and laptops, to position us to meet the ever changing needs of our advertisers. Your success has been noted and is appreciated.

• Circulation - Your circulation performance is second to none. In the September ABC 6-month report, MediaNews Group had circulation growth even as the industry lost 10.6%. That increase included The Denver Post growth which came after the demise of its primary competitor, The Rocky Mountain News. However, not including Denver, the company's loss was 4.8%, still the best performance in the industry by far. This performance moved the company from number 4 to number 2, as measured by circulation.
  
  
• News - Our circulation performance would be impossible if not for the excellent news products each of your newspapers produce. There is not enough space here to comment on all the awards your newsrooms have won this year. While we, like others, have had no choice but to trim news staffs, we have tried to consolidate infrastructure to preserve reporting staff when possible. And with hard work and creativity, your newsrooms have re-invented themselves and continue to do excellent journalism. We are so proud of our outstanding editors and their dedicated staffs. And speaking of creativity, we are awed by the outstanding work you are doing online. As our traffic continues to soar, our audiences between print and online have never been larger.

• Operations - The year has brought major plant consolidation for many of our newspapers. Added to creative circulation and route consolidation and new ways of doing production, you have achieved efficiencies we never would have dreamed possible while improving the service you provide.

• Denver - We completed a significant restructuring in Denver after the closing of the Rocky Mountain News. While we were sad to see the Rocky go, we are excited about our future in Denver. The performance of the Denver Post during this transition has been nothing short of remarkable as we held most of the Rocky unduplicated circulation and operating performance continues to improve each month.
  
  
• Internet Strategy - A group from your newspapers met offsite last April to chart our digital course for the future. Since that time, several task forces have been working to put more meat on the bones. We are now in position to start implementing the strategies we developed. Step one is to install a new content management system that will serve as the foundation for our strategies. Upon completion, we will begin building new local.com and news.com websites in each of our markets. Our largest markets should be up and running by mid-2010. In addition, we are working to implement strategies to protect and monetize our content. New pay models will begin testing in some markets early next year.

• Mobile - Mobile (and other portable reading devices) represents a significant opportunity for us. Accordingly, we have engaged outside mobile expertise to help us develop our mobile strategies. We have completed phase 1 of the process and hope to have a fully mapped out mobile strategy early in 2010.

MediaNews Group is committed to making the necessary investments to implement its strategies. However, these investments must be made prudently and cautiously given the challenges we face to improve our balance sheet. As always, we must balance the need to move quickly with resources and capital available.

MediaNews, like many other newspaper companies, entered the current downturn with a reasonable level of debt based on historical measures. However, the current newspaper industry environment bears no resemblance to any previous newspaper downturn, and the magnitude of the structural and cyclical decline was simply unimaginable just a few years ago. Consequently, we, along with much of the industry, have more debt than is comfortable.

We have been working closely with our banks to restructure our debt and position MediaNews Group to execute its strategies and lead our newspapers into a positive future. Yes, we believe newspapers have a bright future! We are near agreement on the terms of a restructuring plan which we expect will be completed toward the end of the first quarter of 2010. Upon completion, MediaNews expects to have a manageable level of debt, and we look forward to working with each of you to take your newspapers into a changing but exciting future.

As we near the end of 2009, you may have questions regarding annual reviews, 401(k) contributions, health care benefits, and future furloughs, etc. While it is our hope and desire to reinstate Company-wide salary reviews and 401(k) contributions as soon as possible and avoid future furloughs, it is premature to make those decisions. The Company must see clear evidence of improving economic conditions before such decisions are made. We will keep all options open, including reinstatement on a phased approach. As you can imagine, these are not easy decisions. Our highest priority is positioning MediaNews Group for a bright future and preserving/protecting its most valuable asset ­— its employees. We will let you know as soon as those decisions are made.

Let us say again how much we appreciate your efforts. Your contributions are vital to the future success of MediaNews Group and the newspapers it publishes. We're probably biased, but we believe you all comprise the best newspaper team in the business. We're proud to work with you. Let us wish you and your family happy and healthy holidays and a happy new year!

Memo from Kevin Keane

Colleagues,

I had always held out hope that business would bounce back quickly enough that we would be able to avoid further staff reductions this fiscal year. Unfortunately whatever rebound there is in this economy hasn't reached the advertising market yet. We project revenues will continue their skid well into next year, which means expenses will need to come down accordingly.

Today we're announcing that we will be eliminating 18 full-time positions in the newsroom (managers and rank and file employees) by mid summer. We will notify the union today as well. Employees let go will receive a week's salary for each year worked, with a minimum of two weeks and a maximum of 12. The company will also pay the employer portion of Cobra benefits for health care for three months.

It goes without saying that this deep a cut on top of previous reductions will have a lasting impact on our newspapers and Web sites. Our preference would be to hold staffing at its current level until the revenue bottomed out, but we can't delay if we're to get through this downturn.

Before we finalize these cuts, however, we're asking for volunteers to step forward. These volunteers will receive an additional severance of up to eight weeks salary on top of the severance mentioned above - one week's pay for each year worked, up to eight years. Under the volunteer program, a 12-year employee would receive the maximum 20-week severance.

Management reserves the right to accept or reject a voluntary offer, depending on how vital a position is to the news organization. Every accepted offer brings down the involuntary layoff number by one. If we accept 18 volunteers, we'll eliminate the need for the layoff altogether. Anyone interested in the voluntary program should contact Belinda Byrd in HR by Wednesday, July 8 at 5 p.m.

Any questions, feel free to drop me a line.

Kevin

Memo from LANG

July 1, 2009
Colleagues,

In April we announced that LANG would be suspending the accrual of vacation benefits. This measure was taken in an effort to further reduce our operating expenses. That announcement stated that the vacation accrual suspension would be in effect until July 4, 2009.

While we have made progress, we continue to realize a decline in revenue. Subsequently, it has become necessary for us to extend the suspension of vacation benefits accrual through September 26, 2009 (the first quarter of the 2010 fiscal year), at which time we will re-evaluate our situation. In addition to this extension, we are requiring all employees to do one of the following: take five days of paid vacation by September 26, OR take five days of unpaid furlough by September 26. Below is a breakdown of what this means to most of you:

For those with 40 or more hours in their vacation bank, simply take a week of vacation. Because we are heading into the summer months when most people utilize their vacation time, this option should prove to have little or no impact on the majority of employees.

For those with less than 40 hours in their vacation bank, you can do a combination of both options. An example for a full-time employee who works 40 hours per week; you have 24 hours accrued vacation, you can use your three vacation days PLUS take two unpaid furlough days to equal the total five-day requirement.

For those with little or no vacation hours in their vacation bank, you will need to take unpaid furlough equaling five days. Non-exempt employees have the option of spreading their furlough days over several pay periods or they may take all of the time off within a one-week period. It is up to you, but the time must be taken by September 26.

Exempt employees who do not have the equivalent of five days’ vacation in their vacation bank do not have the option of combining vacation with furlough. If you are exempt, and do not have at least one week of vacation, you must take a week of furlough. Your week of furlough must be taken at one time (all within the same week), and you cannot perform any work during that week. This requirement may not apply to some sales positions, so if you are in advertising sales, please see your manager for guidance.

We regret the need to implement these changes in order to meet our financial challenges. It is our belief that this is the least painful way to work towards regaining our financial footing, while allowing us to mitigate mandated furloughs for most employees or, far worse, reducing staffing levels (layoffs).

If you have questions or need to further discuss how this pertains to you specifically, please see your manager, department head, or human resources department.

Thank you for your understanding. Your hard work and dedication have been instrumental in weathering this economic storm.

Memo from Dean Singleton and Jody Lodovic

May 8, 2009

To: MediaNews Group Employees

From: Dean Singleton

Jody Lodovic

Re: Interactive Strategic Summit

Two weeks ago, 22 executives from across the company, including Publishers, Editors, and Interactive leaders, met to discuss MediaNews Group’s interactive strategy. While our websites attract a significant audience and drive considerable page views, we face three daunting challenges that needed to be addressed. First, we continue to do an injustice to our print subscribers and create perceptions that our content has no value by putting all of our print content online for free. Not only does this erode our print circulation, it devalues the core of our business - the great local journalism we (and only we) produce on a daily basis. Second, our interactive revenue growth has slowed because it has been too closely tied to our print classified business, which has suffered with the advent of Craigslist and other free online classified opportunities. Finally, we are not significantly extending the reach of our audience, as our online products too closely resemble the newspaper, and thus fail to meaningfully reach the next generation of readers.

This interactive summit was meant to address these issues head-on; to build a strategic plan that places a value on our content, protects our core print business, extends the reach of our audience, and creates new revenue opportunities online. We cannot continue to give all of our content away for free; we must consider, create and deploy new products and sites that both decouple our interactive revenue from our classified business and offer a compelling new experience for a younger (non-newspaper buying) demographic. From this conference, we have built consensus on a three pronged approach to enhance our business moving forward:

· We will begin to move away from putting all of our newspaper content online for free. Instead, we will explore a variety of premium offerings that apply real value to our print content. We are not trying to invent new premium products, but instead tell our existing print readers that what they are buying has real value, and to our online audience (who don’t buy the print edition), that if you want access to all online content, you are going to have to register, and/or pay. If a non-subscriber wants the newspaper content in its entirety online, they will be directed to some sort of registration or pay vehicle (and if they are a print subscriber, they will have full access at no charge). To be clear, the brand value proposition to the consumer is that the newspaper is a product, whether in print or online, which must be paid for.

· We will begin differentiating our sites from the newspaper and focus on strategies designed to reach younger audiences and extend our reach. The websites, newspaper.com as we call them now, will become a different product. This new site, which we have been calling news.com, will be a regional news site that is actively managed to present breaking news. It will continue to draw a content from the newspaper (but probably in a more abbreviated form), but will also have user-generated content, community involvement and third party content. News.com will continue to serve our existing audience, which spends a lot of time on our sites, and drive significant traffic. They like and depend on our sites for their national and local news. We must not alienate them as we strive to expand our audience and attract younger people and non newspaper subscribers. Obviously, our sites must draw upon the content of the newspaper, but the presentation of that content will be different. News.com will be an entry page to new content offerings, local retail advertising opportunities and premium offerings.

· We will build a new local utility site (Local.com), which is an ecosystem of local information, resources, user content, shopping guides, and marketplaces. This site will be focused on a younger audience as well as other targeted audiences based on demographics which are attractive to our current and potential advertisers. We have the advantage of being the trusted source of for news and information in our communities and have a large base of traffic to feed into Local.com. Local.com will leverage existing newspaper content and existing traffic, and we will add new content (such as Entertainment/Lifestyle) to target a younger audience. Central to this local site will be an aggregation of city or community sites (in the YourHub model) and marketplaces. Local.com will be the ultimate site for people to find stuff, do stuff, and get stuff done in their local market.

We will initially focus on five or six niche vertical content channels to support targeted advertising opportunities (many of which have reverse publishing opportunities). We will build these out with a common template, for ease of execution and maintenance, and deploy across the company.

New tiered circulation pricing strategies will be considered as part of, and tied to, the above online strategies. Such pricing strategies will be designed to maximize revenue, improve overall profitability, add value to full priced, seven day delivery, subscriptions, and reinforce the value for online content.

In order to execute this vision, we have agreed that these new strategies will be done with a template approach, using a menu of common tools and vendors. We will take advantage of the size of MNG to leverage enterprise solutions and build off a common platform that allows for fast implementation and a companywide rollout.

We will form four taskforces (News, local, premium and technology) to drive these ideas to market. They will focus on content, sales, marketing, research and build a business plan. We will also form a technical taskforce to evaluate the needs of a new content management system.

We will keep you posted periodically as we develop these new products and as this strategy evolves. Our online business is a critical piece of the future growth of this company and is integral to growing and targeting new audiences. Our newspapers continue to attract the largest and most desirable audiences in our local markets, but we feel strongly that developing new and targeted audiences online will position us to deliver the most comprehensive and effective solutions for our advertisers.

Memo from Steve Hunt

Good afternoon,

As you know, the copy desk from the San Bernardino Sun and the Inland Valley Daily Bulletin will be joining our copy desk on Monday, Jan. 26 as we create an Inland Division Universal Desk. This desk will be responsible for copy editing every story and designing and paginating every page in our three newspapers, as well as the Sun and the Bulletin. It is an enormous task, one that requires incredible cooperation and planning. That cooperation will involve every reporter and editor on our city desk, features desk, business desk and sports desk.

One of the challenges in this venture is that three papers now share the same off-the-floor deadlines. The Whittier Daily News, Sun and Bulletin all are due off the floor at 10 p.m. Experience tells us that won't work very well when we join our desks into one. So, we're going to adjust two of those deadlines to give our designers and copy editors enough of a gap to ensure we make deadline for all three papers every night. Beginning Jan. 26, the deadline for the Sun will be 9:30 p.m. and the deadline for Whittier will be 9:45 p.m. The Bulletin deadline will remain 10 p.m. Pasadena's deadline will remain 10:45 p.m., while Tribune's will change to 11:30 p.m.

But those aren't the only changes. Because many of our copy editors and designers will be working 1:30 p.m. to 10 p.m. shifts, we also are going to change the copy deadlines for reporters at all five papers. Beginning Monday, Jan. 19, all inside A section copy for the three SGVN papers will be due at 1:30 p.m. A1 copy for Whittier and Pasadena will be due at 5 p.m., while A1 copy for the Tribune will be due at 5:30 p.m. This will provide us with the necessary copy flow so copy editors and designers can meet their page flow deadlines. For those of you who have never worked on a copy desk, what this does is prevent a logjam of pages on deadline, which would inevitably lead to late press starts and late delivery of papers. Of course, we realize there will be live and late stories from time to time. Special allowances will be made for those, as well as breaking news. But the hope here is to set up a system that provides for greater copy flow earlier in the day to ensure every paper in the Inland Division makes deadline and every reader gets his or her paper on time.

Naturally, those of you making photo assignments will want to try to line those up as early as you can too. We have more leeway on A1 than inside the A section, but it greatly helps designers to have art early in their shifts. Again, exceptions will be made for live events and breaking news.

Also next week, we will have one-hour earlier deadlines on Tuesday because of the inauguration. Circulation plans to print several thousand extra copies to sell on the street and wants to make sure those papers get to delivery people earlier. So on Tuesday night, Whittier's deadline is 9 p.m., Pasadena's is 9:45 p.m. and Tribune's is 10:45 p.m. For that night only, we'll want normal inside A copy by 2 p.m. and everything else by 4 p.m.

Thanks very much for your help. And while I am at it, I will echo Frank's comments about the good work you have all done recently. The Rose, our Jan. 2 parade wrap and the other special sections we've done recently were exceptional. But I am most proud that we had incredibly strong papers throughout that busy period and have kept that going. These are trying times for newspapers and most other businesses. But I am so proud of all of you and the papers we publish every day.

Thanks very much,

Steve

Memo from Jim Janiga

Dear Fellow Employees,

Today our company is announcing the suspension of all annual merit increases to be effective February 1, 2009. We are not certain how long this suspension will last but are hopeful that the coming 2010 Fiscal Year operating budget will allow the suspension to be lifted. The new fiscal year begins July 1, 2009. No guarantees but that is our goal. In the meantime, all merit increases earned and due before February 1, 2009 will be processed.

Under this suspension all increases earned and due on and after February 1, will be suspended for at least five months. For example, and based on that anticipated time period, if you are due a merit increase this coming March 2009, that merit increase will be delayed five months to August 2009. If you just receive a merit increase this past December 2008, your next merit increase would be due May 2010. Your Human Resources representatives can assist with any questions or concerns you may have.

Suspending merit increases will not reduce our current expenses but it does help us contain our expenses for a period of time. So obviously more needs to be considered and implemented, if warranted. To this end we are asking everyone to share with us any suggestions you might have regarding cuts in our operating expenses that are measurable, timely and sensible; cuts that can help us avoid more layoffs and are cuts you may be willing to accept. We need your input.

Unfortunately we cannot promise there will not be layoffs in the future but we should always endeavor to do what we can to prevent as many as possible. Obviously, growing revenue is our best option but until revenue streams stabilize and grow, reducing our expenses will continue to be a painful but necessary focus. Some early suggestions have included mandatory furloughs, cuts in our vacation benefits, pay cuts (temporary and/or permanent), reduced work schedules, allowing volunteer reduction in hours while retaining most full-time benefits, and more.

No one has THE answer and no one should naively speculate what others may not be willing to do to help save a co-worker's job... even where there are no guarantees. We would be foolish not to ask for your support, ideas, focus and commitment.

Everyone needs to be engaged. We need to support each other. We can and will make a difference. Times are tough but we are tougher. Your ideas are important to all of us.

Thank you for your attention and thank you for your continuing input and loyalty.

Sincerely,
Jim Janiga
Senior Vice President - Human Resources

Email from Joshua Stecker

Hi everyone,

Well, the cat's out of the bag.

Yes, the Press-Telegram has quietly ceased publication of San Pedro Magazine, and in turn, I have been laid off.

Getting laid off is never fun or easy, but what's worse than me losing my job is watching the two newspapers that serve San Pedro officially abandoning our area. First it was MORE, now San Pedro Magazine.

Well, I wasn't going to sit idly by and let my hometown lose a magazine that was hugely popular, profitable, well-respected and incredibly fun to produce.

So, in good ole' San Pedro do-it-yourself fashion, I'm launching San Pedro Today, a new independently owned and operated monthly magazine serving my hometown of San Pedro.

Premiering the week of January 5, 2009, San Pedro Today will have the same great 30,000 copy circulation (still the largest circulated publication in San Pedro), free home delivery to homes and condos, the beautiful glossy cover and include all the great columnists and contributors who helped make the former publication the success it was. I’m taking the best parts of what made San Pedro Magazine great and enhancing it with all the features I wanted to do but could never get done working for my former corporation.

Now that I independently own and operate San Pedro Today, I can finally give San Pedro the type of quality publication it has always deserved.

And talk about launching with a BANG! Our first issue will be a special commemorative issue featuring the San Pedro High School Football team celebrating their L.A. City Section (co-) Championship!

This premiere issue will feature a cover and story celebrating the exciting and historic 21-21 tie championship game between San Pedro and Narbonne High School. (I was there, it was an incredible game!) It will also include a multiple-page photo spread chronicling the entire game, including photos of fans in the stands and candid on and off-the-field celebrations.

It will definitely be a highly sought after publication when it hits the streets. I'm excited to launch the new magazine leading with such an awesome hometown event.

In addition to our regular content, we're also accepting "SPHS Football Pride" ads if anyone is interested in adding a personal ad congratulating our SPHS Pirates to our premiere issue. All the information is at www.sanpedrotoday.com.

On a personal note, I want to be very clear that my parting from the Press-Telegram was an amicable one. The situation that unfolded this past week was due to the incredible hardships facing the newspaper industry as a whole. I do not envy those in charge at the Press-Telegram, they have a huge mountain to climb and have to deal with a huge corporation that has completely lost focus of what it means to produce a quality local newspaper for the community. It’s sad, really. Newspapers are dying, but magazines are alive and kicking.

To all our current (and future) advertisers, thanks for shifting your support to San Pedro Today. The transition will be painless. My former advertising representative from San Pedro Magazine, Patricia Roberts, has joined me on San Pedro Today and will be assisting you in the turnover process.

I’m also pleased to announce we’re LOWERING ADVERTISING RATES across the board for the new publication. Since we do not have to go through the corporate bureaucracy to get things done, our working experience should be much more fun and easy. We’re here to help you succeed.

Lastly, those who have worked with me and have known me through the former magazine know how much I love my hometown. I’m a fourth generation San Pedran and proud of it. When I got the news about the abrupt cancellation of San Pedro Magazine, without being able to produce one final issue to let everyone know, well... I wasn't going to let that happen. So, San Pedro Today was born.

I hope you join me on what will be one incredible adventure!

Sincerely,
Joshua

P.S. Make sure when you visit www.sanpedrotoday.com that you subscribe to our email newsletter on the top right-side column. This way you won't miss out on all the new content we'll be producing. :)