Appeal-Democrat employees face pay cut

Workers at the Appeal-Democrat will get a 5 percent cut in pay effective July 13 as part of an across-the-board reduction being implemented by its parent company, Irvine-based Freedom Communications Inc.

The company, like media firms across the country, has struggled financially due to the weak economy, declining advertising and circulation and new competition from the Internet. At the same time Freedom is laboring under $700 million in debt, which it took on in 2004 to pay members of the family-owned company who wanted to cash in their shares.

Over the last couple of years, Freedom has implemented a range of cuts including voluntary severance, layoffs and ending the company's matching contribution to the 401-K plan. During the second quarter, all employees had to take a five-day unpaid furlough.

Burl Osborne, Freedom's incoming interim chief executive, said the executive team considered and rejected other actions, including additional furloughs in the last two quarters of the year and further layoffs.

"There is no best way," he said. "This, I believe, is the least worst way. No one is enjoying this."

Freedom Communications owns 33 daily newspapers across the country, more than 70 weekly newspapers, magazines and other specialty publications and seven broadcast stations.