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Spain’s Troubles Catch Up With a Storied Newspaper Spain’s Troubles Catch Up With a Storied Newspaper
(about 4 hours later)
MADRID — El País established itself as the leading newspaper in Spain in the late 1970s, serving as a frontline witness to the formative period when Spain returned to democracy after the death of the dictator Francisco Franco. Now the newspaper is going through turbulent times of its own. MADRID — El País established itself as the leading newspaper in Spain in the late 1970s, serving as a front-line witness to the period in which Spain returned to democracy after the death of the dictator Francisco Franco. Now the newspaper is going through turbulent times of its own.
On Tuesday, the news staff held a two-hour work stoppage, with labor leaders warning of more prolonged strike action, after management announced plans to cut a third of the staff to offset falling revenue. The news staff held a two-hour work stoppage on Tuesday, with labor leaders warning of more prolonged strike action, after management announced plans to cut a third of the staff to offset falling revenue.
“You don’t fire one-third of the staff just like that,” one journalist at the newspaper said on condition of anonymity because of the sensitivity of the situation. “It’s contradictory to the history of the company, which was about looking out for the welfare of the staff.” “You don’t fire one-third of the staff just like that,” said one journalist at the newspaper, who spoke on the condition of anonymity because of the coming layoffs. “It’s contradictory to the history of the company, which was about looking out for the welfare of the staff.”
Until this year, El País had managed to avoid the losses that have hit the newspaper industry worldwide as it struggles with the transition to digital publishing. In the first half of this year, it had a net profit of €1.8 million, or $2.3 million. Until this year, El País had managed to avoid the losses that have hit the global newspaper industry as it struggles with the transition to digital publishing. In the first half of the year, it had a net profit of 1.8 million euros, or $2.3 million.  
But the fact that El País has succumbed reflects the depth of the recession in Spain — on Tuesday, the Bank of Spain said the economy had contracted by 0.4 percent in the third quarter — as well as some factors that are unique to the newspaper. The fact that El País has now succumbed reflects the depth of the recession in Spain — the Bank of Spain said on Tuesday that the economy had contracted by 0.4 percent in the third quarter — as well as some factors that are the newspaper’s alone.
Management has warned that El País was headed for losses by year-end unless it cut costs drastically. In addition to the layoffs, El País will cut the pay of nondeparting staff by 15 percent. Management had warned that El País was headed for losses by the end of the year unless it cut costs drastically. In addition to the layoffs, the newspaper will reduce the pay of the remaining staff by 15 percent.
Since the crisis began, dozens of newspapers have shut down across Spain, and 8,000 journalists have lost their jobs, according to the Federation of Spanish Journalist Associations. One national newspaper, the leftist Público, folded its print edition this year and went online-only. Meanwhile, three leading rightist newspapers — El Mundo, ABC and La Razón — are under pressure to consolidate in order to stem mounting losses. Since the crisis began, dozens of newspapers have shut down across Spain, and 8,000 journalists have lost their jobs, according to the Federation of Spanish Journalist Associations. One national newspaper, the leftist Público, folded its print edition this year and went online-only. Three leading rightist newspapers — El Mundo, ABC and La Razón — are under pressure to consolidate in order to stem mounting losses.
While newspapers nearly everywhere have been cutting back as they struggle with the transition to digital publishing, Spain’s recession has set off a precipitous fall in advertising. Magna Global, a media buying agency, forecast that ad spending would drop 8.4 percent in Spain this year, the fourth decline in five years, which means the Spanish ad market will finish this year 37 percent below the 2007 level. Another agency, ZenithOptimedia, expects the drop in Spain this year to be even steeper, down 12.2 percent, compared with a 0.7 percent decline for Western Europe over all. While newspapers nearly everywhere have been cutting back, the recession in Spain has set off a precipitous fall in advertising. Magna Global, a media buying agency, forecast that ad spending in the country would drop 8.4 percent this year, the fourth decline in five years, which would put the Spanish ad market 37 percent below 2007 levels. Another agency, ZenithOptimedia, said it expected the decline this year to be 12.2 percent, compared with 0.7 percent for Western Europe over all.
It is not just newspapers that are suffering. While commercial television has generally done a bit better, the national public broadcaster, RTVE, is implementing spending cuts of €204 million this year, on a budget of €1.2 billion, and faces further reductions next year. RTVE generates its budget from a mix of government grants and advertising revenue, both of which are under pressure from the economic crisis. It is not just newspapers that are suffering. While commercial television has generally done a bit better, the national public broadcaster, RTVE, is implementing spending cuts of 204 million euros this year, on a budget of 1.2 billion euros, and faces further reductions next year. RTVE generates its budget from government grants and advertising revenue, both of which are under pressure from the economic crisis.
In such a context, questions have been raised over the level of political control over RTVE, which shuffled management on the orders of the government of Prime Minister Mariano Rajoy. Last month, RTVE apologized for playing down news coverage of a giant rally in Barcelona supporting Catalonia’s independence. In this context, questions have been raised about the level of political control over RTVE, which shuffled its management on the orders of the government of Prime Minister Mariano Rajoy. Last month, RTVE apologized for playing down news coverage of a giant rally in Barcelona supporting Catalonia’s independence.
Cynicism about the independence of journalism has driven viewers and readers to alternative news sources on the Web, compounding the effects of the crisis. Cynicism about the independence of journalism has driven viewers and readers to alternative news sources on the Web, compounding the effects of the crisis. “There is a general lack of confidence, not only in politicians, but also in the profession of journalism,” said Carlos Barrera, a journalism professor at the University of Navarra.
“There is a general lack of confidence, not only in politicians, but also in the profession of journalism,” said Carlos Barrera, a journalism professor at the University of Navarra. “The indignados were protesting against institutions like journalism, too,” Mr. Barrera said, referring to the youth-led protests, fueled by social media, that began in May 2011 in Madrid and other cities. “They saw the mainstream media as being tied in with the politicians and the banks.”
“The indignados were protesting against institutions like journalism too,” Mr. Barrera added, referring to the youth-led protests, fueled by social media, that began in May 2011 in Madrid and other cities. “They saw the mainstream media as being tied in with the politicians and the banks.” In the deepening dispute at El País, the staff has called for the resignation of Javier Moreno, the editor, contending that he tried to use strong-arm tactics to prevent journalists from withdrawing their bylines to protest the cuts. In an interview, however, Mr. Moreno insisted that he had only called on staff to respect the terms of editorial statutes agreed to in 1980, which limit the right to remove bylines.
In the deepening dispute at El País, the staff has called for the resignation of Javier Moreno, the managing editor, contending that he tried to use strong-arm tactics to prevent journalists from withdrawing their bylines to protest the cuts and exacerbating tensions in the newsroom. He accused some of his staff of putting the newspaper’s reputation on the line by spreading disparaging comments online about its management. That, he warned, could do far more damage to El País than the planned strike action. “There is a legal right to strike, but it is irresponsible to allow labor issues to then seriously hurt the image of the newspaper,” he said.
In an interview, however, Mr. Moreno insisted that he had only called on staff to respect the terms of editorial statutes agreed to in 1980, which limit the right to remove bylines. Mr. Moreno accused some of his staff of putting the newspaper’s reputation on the line by spreading disparaging comments online about its management. That, he warned, could do far more damage to El País than the planned strike action. The staff cuts at El País come as its parent company, Prisa, continues to struggle under a mountain of debt. Two years ago, Prisa received a 900 million  euro cash infusion from Liberty Acquisition Holdings, an investment company based in New York, which took over majority control from family members of Prisa’s co-founder, Jesús de Polanco.
“There is a legal right to strike, but it is irresponsible to allow labor issues to then seriously hurt the image of the newspaper,” he said. The takeover shifted Prisa from family ownership to control by a group of financiers, hedge funds and investment banks, but Juan Luis Cebrián remained chief executive. Mr. Cebrián had started Prisa with Mr. de Polanco and edited El País for more than a decade. Mr. de Polanco’s death in 2007 left Mr. Cebrián effectively alone at the helm as the world financial crisis unfolded.
The staff cuts at El País come as its parent company, Prisa, continues to struggle under a mountain of debt, two years after a €900 million cash infusion from Liberty Acquisition Holdings, an investment company based in New York, which in return took over majority control of Prisa from family members related to the company’s co-founder, Jesús de Polanco. Prisa accumulated significant debt after expensive and mistimed acquisitions, particularly in the Spanish television market. Since October 2008, Prisa shares have fallen 90 percent, to 32.5 euro cents from more than 3 euros, leaving the company with a market value of 326 million euros. Its debt is 3.5 billion euros.
The takeover by Liberty shifted Prisa from family ownership to control by a group of financiers, hedge funds and investment banks. But the ownership change left Juan Luis Cebrián as chief executive of Prisa. Mr. Cebrián had started the company alongside Mr. de Polanco and then edited El País for more than a decade. Mr. de Polanco’s death in 2007 effectively left Mr. Cebrián alone at the helm just as the world financial crisis unfolded. Mr. Moreno dismissed the suggestion that El País was being made to pay for Prisa’s debt burden and failure to find buyers for some of its other media and publishing assets. Whatever Prisa’s own problems, Mr. Moreno said, “I’m pretty sure nobody would have or should have allowed El País to turn into a subsidized newspaper.”
Prisa accumulated significant debt, following expensive and mistimed acquisitions, particularly in the Spanish television market. Since October 2008, Prisa shares have fallen 90 percent, to 32.5 euro cents from more than €3, leaving the company with a market value of €326 million. Its debt is €3.5 billion. Since the layoff announcement, disgruntled employees have also turned on Mr. Cebrián, whom they accuse of driving El País into the ground. Mr. Cebrián has one of the highest salaries in the media sector, and discontented staff have distributed stickers showing him with the slogan “149 layoffs and €13 million,” which is how much the union claims Mr. Cebrián earned last year.
Mr. Moreno also firmly dismissed the suggestion that El País was being made to pay for Prisa’s own debt burden and failure to find buyers for some of its other media or publishing assets.
Whatever Prisa’s own problems, Mr. Moreno said, “I’m pretty sure nobody would have or should have allowed El País to turn into a subsidized newspaper.”
Since the layoff announcement, disgruntled employees have also turned on Mr. Cebrián, whom they accuse of driving El País into the ground. Mr. Cebrián has one of the highest salaries in the media sector, and discontented staff have distributed stickers showing a smiling Mr. Cebrián with the slogan “149 layoffs and €13 million,” which is how much the union claims Mr. Cebrián earned last year.
“Cebrián has already managed to destroy Prisa and is now doing the same with its main newspaper while getting paid a lot for it,” said Manuel González, president of the El País staff union. “He considers that El País is his creature and he can now do whatever he wants, even eat it alive like in one of the paintings by Goya.”“Cebrián has already managed to destroy Prisa and is now doing the same with its main newspaper while getting paid a lot for it,” said Manuel González, president of the El País staff union. “He considers that El País is his creature and he can now do whatever he wants, even eat it alive like in one of the paintings by Goya.”
Mr. Cebrián did not return a request for comment sent by e-mail last week. Mr. Moreno, however, defended Mr. Cebrián and argued that it was “a wonder” that El País managed to stay profitable until this year, as well as gain market share from rivals. Mr. Cebrián did not return a request for comment sent by e-mail last week. Mr. Moreno, however, defended Mr. Cebrián and argued that it was “a wonder” that El País managed to stay profitable until this year, as well as gain market share from its rivals.
“The problems faced by El País are the same as those for Newsweek, The New York Times, The Guardian or Le Monde,” he said, “to which we need to add of course the difficulties of any company operating now in Spain.” “The problems faced by El País are the same as those for Newsweek, The New York Times, The Guardian or Le Monde,” Mr. Moreno said, “to which we need to add, of course, the difficulties of any company operating now in Spain.”
Mr. Moreno acknowledged that economic constraints had recently forced the newspaper to accept some paid travel and other invitations, but not to the extent of compromising the newspaper’s reporting standards. Still, he said, the planned job cuts were essential to ensure that El País remained financially viable. Mr. Moreno acknowledged that economic constraints had recently forced the newspaper to accept some paid travel and other invitations, but not to the extent, he said, of compromising its reporting standards. He said the planned job cuts were essential to ensure that El País remained financially viable.
“The independence of this newspaper is based on its financial solidity, and so if the paper is allowed to enter into losses, that independence is under threat,” he said.“The independence of this newspaper is based on its financial solidity, and so if the paper is allowed to enter into losses, that independence is under threat,” he said.
Eric Pfanner reported from Paris.

Raphael Minder reported from Madrid and Eric Pfanner from Paris.