CEO faces backlash after closing unionized news sites

Billionaire Joe Ricketts shuttered local coverage hubs in apparent retaliation for a successful unionization effort. Former employees and customers have flocked to social media to speak out.

When you’re closing a business, every word gets amplified and scrutinized.

That’s the lesson Joe Ricketts, the billionaire founder of TD Ameritrade and owner of the Chicago Cubs, is learning after closing the local news web sites and Gothamist. The unexpected closings have put 115 writers and editors out of work.

Fortune wrote:

The move comes one week after editors and reporters at the site’s New York newsroom successfully joined a union, but the closing also affects the company’s entire network of sites in places like Chicago, Los Angeles, San Francisco, and Washington, D.C., according to the New York Times. It put 115 journalists out of work in total.

Journalists at the websites were publishing work and tweeting stories on Thursday afternoon. Then a post was published on the sites around 5 p.m. from Ricketts announcing his decision to close them down.

Ricketts claimed closing the sites was a business decision in his letter posted to the websites:

Letter from Joe Ricketts:

I started DNAinfo in 2009 at a time when few people were investing in media companies. But I believed an opportunity existed to build a successful company that would report unbiased neighborhood news and information. These were stories that weren’t getting told, and because I believe people care deeply about the things that happen where they live and work, I thought we could build a large and loyal audience that advertisers would want to reach.

[…]at the end of the day, a business, and businesses need to be economically successful if they are to endure. And while we made important progress toward building DNAinfo into a successful business, in the end, that progress hasn’t been sufficient to support the tremendous effort and expense needed to produce the type of journalism on which the company was founded.

However, observers were quick to point out his antipathy to unions, enunciated in his blog:

I believe unions promote a corrosive us-against-them dynamic that destroys the esprit de corps businesses need to succeed. And that corrosive dynamic makes no sense in my mind where an entrepreneur is staking his capital on a business that is providing jobs and promoting innovation.

It is my observation that unions exert efforts that tend to destroy the Free Enterprise system.

Now, his former employees are saying the closings were political; Twitter agrees.

Some were upset that an important part of the media landscape was being destroyed.

One facet getting lots of coverage was how employees were blindsided by the closings. In interviews, staffers reported learning in an email that they had lost their jobs:

Others bemoaned that any one wealthy person can erase information from the internet.

Beyond that is the impact on suddenly unemployed journalists.

NPR reported:

The fact that all pages in the Gothamist and DNAinfo empires began redirecting to Ricketts’ note spurred concerns among the sites’ reporters that they wouldn’t be able to access their work, complicating their now-requisite job searches. Reporters submit examples of their published work when applying for jobs.

Some people on social media saw the sudden redirect and inability to access the site’s archives as retaliation against the sites’ employees for voting to unionize. Instructions on workarounds to access the outlets’ archives began to proliferate.

An official at DNAinfo told the Times that the sites would be archived online. As of Friday afternoon, the sites’ archives were accessible.

The union that represents some of the now jobless staff, Writers Guild of America East, took this stand:

New York Mayor Bill de Blasio had choice words for the billionaire investor.

The New York Daily News reported:

“Joe Ricketts is a coward. He wouldn’t last a minute under the intrepid scrutiny of the reporters he employed. What a loss for our city,” the mayor, who has come under fire for his own lack of transparency, tweeted Friday, a day after the announcement was made and the sites were shut down.

Multiple parody and replica websites have arisen quickly since the news sites were closed.

Mashable wrote:

A new site went up after the Gothamist/DNAinfo announcement:

The parody site looks like the now-defunct Gothamist, SFist, LAist, and other local news sites, but features Ricketts. A short intro article says this is “the only site where you can get up-to-date news and information about Joe Ricketts, the owner of some news sites that you can’t access anymore!”

Here are four lessons for corporate communicators handling the closing of an organization:

1. Alert employees with compassion. Whether they talked about the email of doom that prompted visceral response in the newsroom, or they described trying to access their articles and discovering the website had stopped working, employees had a gut-wrenching story to tell. To sidestep a lingering press story, notify employees properly that the business will be closing.

2. Make archives available. The writers needed access to their work to find new jobs. By opaquely deleting the archives from the web—and exacerbating former employees’ professional plight—the company behind the sites fueled yet another narrative for adverse coverage from sympathetic journalists. If it had provided employee access up front, the story would have had less power.

3. Blogs matter. One prominent element in the coverage was Ricketts’ blog disdaining unions. Ricketts might not care what the nation thinks, but the example offers a cautionary tale: If a blog is part of your media strategy, expect that journalists will find it and use it as it suits them; words written in anger could haunt the writer later.

4. No comment can be the best comment. By refusing to comment further, Ricketts starved the story about Gothamist until the news cycle decided to move on. In today’s fast-paced media environment, a good strategy can be to just wait out bad news. Perhaps Ricketts was following the adage: “If you don’t have something nice to say, don’t say anything at all.”

What do you think of Rickett’s media strategy, PR Daily readers? How would you have mitigated the backlash?

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