Submitted by Steve Hanson on Thu, 02/19/2009 – 2:00pm

With the economy continuing to worsen and conditions eroding in the daily newspaper industry, the Milwaukee Journal Sentinelis freezing employee wages and may institute a one-week unpaid employee furlough.

Journal Sentinel employees received a memo this week from president and publisher Betsy Brenner outlining the actions the daily newspaper’s management will take “to properly structure our business and weather this economic downturn.”

Brenner told employees the company hopes to keep further staff reductions to a minimum, but those decisions will depend on the impact of cost-savings efforts and the newspaper’s revenue performance for the balance of 2009. The newspaper cut about 10 percent of its staff in summer 2008 and 5 percent in fall 2007.

The wage freeze was implemented for the remainder of 2009 for all non-union employees. The company has begun meetings with its seven employee unions to discuss the wage freeze and other steps to reduce costs, Brenner said in the memo.

Greg Pearson, president of newsroom employees’ union Milwaukee Newspaper Guild Local 51, said Wednesday that the guild hopes to avert further layoffs and is open to discussing the issues Brenner has raised.

“To the company’s credit, they’re making efforts to avoid that step (layoffs),” Pearson said.

The guild’s contract expired at the end of 2008, and unionized newsroom employees have received no pay increase so far this year, Pearson said.

Brenner referenced a letter to employees last week from Journal Communications Inc. chairman and CEO Steve Smith about steps the parent company is taking to reduce costs across all the company’s businesses. In addition to the Milwaukee Journal Sentinel, Journal Communications operates radio and television stations, publishes shopper publications and runs a printing business.

Smith told stock analysts Feb. 12 that the company cut its full-time work force by more than 12 percent during 2008. The company’s management also decided to suspend its matching contribution to the Journal 401(k) plan effective immediately, he said.

Journal Communications’ radio station group cut its work force 11.7 percent in 2008 and the television station group reduced employment 12.1 percent, president Doug Kiel told stock analysts.

The company’s fourth-quarter broadcast revenue was down 6.4 percent and publishing, which includes the Journal Sentinel, was down 10.4 percent.

“At our newspaper business we … have talked about the erosion of large portions of our print revenue,” Brenner said in her memo. “We’ve seen that deterioration accelerate in the first weeks of 2009.”

The Journal Sentinel “continues to publish a great newspaper” and grow its Web sites, but “our efforts may well fall short of hitting our revenue targets,” Brenner said.

Journal Communications (NYSE: JRN) owns the Journal Sentinel; 12 television stations including WTMJ-TV (Channel 4) in Milwaukee, and 35 radio stations, including WTMJ-AM (620) and WLWK-FM (94.5) in Milwaukee.

Bill Graffin

MMSD Public Information Manager

(414) 225-2077