Reader sues newspaper over layoffs

July 10, 2008

Here’s a hot one we found on the Romenesko journalism business blog: A reader is suing The News & Observer, McClatchy’s paper in Raleigh, North Carolina, for cutting staff and the size of the paper.

Keith Hempstead, a Durham lawyer, filed the suit last month in Wake Superior Court. He says he renewed his subscription in May just before the paper announced on June 16 the layoffs of 70 staff members and cuts in news pages. The paper, he says, is now not worth what he signed up for and therefore the cuts breached the paper’s contract with him.

Hempstead — a former reporter at the Fayetteville Observer — told Friedman that he likes the paper, but hates all the staff cuts that he says hurts their quality and is antithetical to the way the newspaper business ought to be run. He is seeking unspecified damages and attorneys’ fees, but added that he’s in it for the love, not the money.

N&O Executive Editor John Drescher has quite the witty riposte:

“We’ve had some really good papers recently, and they’re worth more than the 36 cents a day that Mr. Hempstead is paying us,” Drescher said.”In fact, he owes me money,” Drescher continued. “So when he gets a lawyer, he can work with my lawyer and figure out how much he’s going to pay me for the excellent coverage he’s been getting recently.”

It may be nothing more than a way to raise awareness, but if Hempstead wins, he may end up killing the paper.

McClatchy is cutting about 10 percent of its 14,000-strong staff in a bid to trim costs as advertising revenue, the lifeblood of its business, declines. Still, the stock market is killing the company and other newspapers. How badly? Today, the stock is down 5 percent. At $5.05, it’s at half the price it was three months ago, and has lost 81 percent of its value in the past year. You could argue that they need every penny they have at this point.

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