This week the Lambrakis Press, Greece's largest publisher and owner of two national dailies, laid off more than 40 employees. The number represents about 4-5 percent of the company's payroll.

The layoff was foreshadowed by a leading article in DOL's flagship, To Vima, last Sunday, in which its editor cited the end of the company's creditworthiness and the lack of assistance from the public purse as the main reasons. "The combination of what we call the press crisis with the economic crisis has led to an asphyxiating pressure on media, leading to simply unsustainable [financial] results," wrote Pantelis Kapsis. "And we're talking about a timeframe of months if not weeks. Many newspapers have mortgaged their fixed assets and are paying salaries from loans, even as banks refuse to extend their credit. For how long can things continue this way?"

It would not be surprising if the exercise were repeated to the tune of four percent next month. The company, also known by its acronym, DOL, has been dogged by overstaffing problems for a decade. In 2000 its share price tumbled after the Athens Stock Exchange crashed. The company shed some of its non-core assets but never dismissed workers, and its stock and results never recovered. DOL's decision in 2005 to recover through attrition, a patent failure, was attributable to three factors: family ownership, union pressure and the marriage between the press and political parties.

DOL's key assets, its tabloid daily, Ta Nea, and its flagship, To Vima, were founded in 1922 by Dimitris Lambrakis. The majority owners, the Lambrakis family, have taken a paternal attitude towards workers over the decades, even baptising their children in some cases and giving the company a reputation as a bastion of labour security. DOL traditionally paid better than its competitors, attracted some of the best talent in the market and deposited salaries in advance of work. That sense of prestige and noblesse oblige changed with the death of Christos Lambrakis, Dimitris' son, last December. Christos had no children and the family produced no capable heirs. The company is now 25 percent owned by the Lambrakis Foundation and a large tranche of shares remains in the hands of Lambrakis' two surviving sisters and his mother. But the family has no involvement in major decisions any more. Executive management rests with its CEO, Stavros Psyharis, Lambrakis' protege, who also owns 21 percent of shares.

DOL's unofficial alliance with the once-powerful journalists' union, ESIEA, has also ended. DOL has frequently supplied ESIEA's board members and presidents. In better times this made for consensual decisions and peace between management and labour when annual pay rises were negotiated. War with ESIEA meant a strike and lost daily editions, which no publisher wanted to contemplate. But that has now changed. Unionists' persistent refusal to compromise with employers over measured staff cuts has finally led to an open breach betweent the two. On September 30 ESIEA declared a 48-hour strike at DOL and another major publisher, Pegasus, which produces the national daily To Ethnos. The publishers had the strike annulled by the prosecutor, but open war has been declared. According to one blog, employees at To Vima have already held a meeting resulting in a possible 24 hour strike.

DOL's political clout with governments has given it high prestige and the ability to sell advertising to the state. To Vima was founded as the mouthpiece of the anti-Royalist, Liberal movement of Eleftherios Venizelos. After that faction's demise it adopted the left-of-centre Centre Union of Yiorgos Papandreou, grandfather of today's prime minister. For the past 30 years To Vima has been considered the unofficial mouthpiece of the socialist party, Pasok, which became the Centre Union's new incarnation in 1974.

That traditional marriage holds true for every major political division. The Communist party's official mouthpiece is Rizospastis; conservative New Democracy's unofficial mouthpuieces are Eleftheros Typos and Apoyevmatini, and once included Kathimerini. This tradition may have given DOL hope that once Pasok regained power its coffers would fill through public advertising and loan guarantees. But the ideological marriage between press and parties is deteriorating. What makes the To Vima editorial noteworthy is its political broadside on the socialist government of Yiorgos Papandreou. "The government not only has no policy for the issue, but even ignores its existence," it says.

Papandreou and To Vima have had run-ins before. When Papandreou lost his second general election in September 2007, To Vima backed his rival for the leadership, former culture minister Evangelos Venizelos. Papandreou ultimately prevailed in an election opened to the party base, but it took until the following spring for his relationship with To Vima to thaw. A few days before the October 2009 election, which brought Papandreou to power, he signalled that it would not be business as usual for the press under his premiership. He told reporters at the Thessaloniki International Fair that he knew they were not, presently, free to report the news as they wished, and that he planned to establish a new and healthier relationship between the government and the media that did not create mutual compromises. That new relationship has come inasmuch as the old publishing model of selling advetising to the government and using the income to hold sway over it is now simply unaffordable for the public sector.

The changes at DOL will likely be followed by changes in the other major national dailies. They are even less well protected against the ravages of the marketplace, and DOL has now showed them the way.

Posted by JOHN PSAROPOULOS at Wednesday, October 06, 2010 The New Athenian Blog
[http://www.thenewathenian.com/2010/10/this-week-lambrakis-press-greeces.html]