Red & Black documents

We know many of you have questions about the board of The Red & Black and how they do business.

Below are the IRS forms from The Red & Black, which may offer some perspective on these issues.

2009

2010

2011

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26 thoughts on “Red & Black documents

  1. Why so coy? Why not comment on the fact that Harry Montevideo is making $173k/yr off the paper and received a 50k raise two years ago? It’s a great find, and it’s hard to imagine the justification.

  2. From someone without a solid background in tax code, this is very much Greek to me. Is there anything that jumps out of these documents as fishy? Was that the intent of the post or was this just for the sake of transparency?

  3. $173K out of $506K total Wages paid to one board member/general director or ~1/3 of the total wages. ~$1,100,000 in advertising revenue out of ~1,600,000 total revenue- or 2/3 of their total intake. The former staff needs to look to creating a true student run competitor- look to kickstarter and other crowd-source funding to help you off your feet. Then approach R&B advertisers to support a true student newspaper instead of an engineered one. With advertiser support behind you, the R&B board will be forced to return things to as they were, or fight a market battle with a paper they admitted themselves wasn’t very profitable.

  4. Hi GoDawgs – a few things jump out. The paper brings in $1.6m/year but spends only $243k in program services (including printing).

    Where’s the rest going? Well, Harry Montevideo, the publisher, is making $173k (not including benefits). Another $333k is paid in unspecified salaries and wages. (Red & Black – did students receive wages for their work on the paper?)

    These seem like pretty weird financials for a nonprofit student-run newspaper, no?

      • The point of these statements, I believe, is not to reveal come conspiracy about practices and wages.

        They show that since the shift in 2011 from a daily to weekly newspaper, and with the expansion of the online product, that the paper was just as financially stable. Therefore, those major changes to the paper were more than just poor ethical decisions, but unnecessary financial ones

        The student staff does gets paid, some on commission and some are salaried, and I very much doubt they are worried about Montevideo’s raise.

    • Somewhere in all of those numbers is a gross receipts figure in excess if $7 million. As someone who does not know much about the tax code, these tax returns look weird to me as well.
      Who is getting all the money or to where is it going?

    • All student workers receive wages. There are also a few full-time employees (editorial adviser, production manager, office manager, ad director) who receive salaries and benefits.

  5. Casey, what do you mean by “fight a market battle with a paper they admitted themselves wasn’t very profitable”? The publisher seems to be doing quite well.

    • The guy on the video says their goal in adding outside marketing services and oversight was because they had ‘never been able to make it profitable’ – Despite taking in $1.6M and spending $1.1M… The internal memo mentions declining reader-base. Seems to me, with $1.1M in ad revenue alone making up 2/3 of their gross intake- the board has a weakness. The students could easily sway those ad dollars to a new student run competitor – providing competition to a board who feels, truthfully or not, that they are overseeing an unprofitable business, that is now hemorrhaging funds due to students starting their own venture and cannibalizing ad revenue. The advertisers fund a student run newspaper- they know this. Trust that they will follow the students in rejecting this, and hit the board where they feel it- the wallet.

      Interesting note- at $1.6M – $16k is 1%. even if they were breaking even revenue to expense- the raise the General Manager received is around 3% of their gross revenue. Without that significant raise you would see a substantial (~10%) growth in net revenue over expenses.

      • Hrrm- from reviewing video comments- the video was not in reference to these recent changes- I stand corrected and retract the video portion of my comments.

  6. The various editors received weekly salaries, the writers received payment on a per-story basis. Photographers were also paid for pictures, as well as any video or multimedia aspects involved. Opinions columns were not paid.

  7. Glad to hear that students were paid for their work! Does anybody care to comment on Montevideo’s role, or is that currently too sensitive a topic?

  8. Harry may be the most overpaid person in the newspaper industry. I remember when I was there how little we got paid and how it was near impossible to get and travel expenses. I remember we once got $40 to go cover a football game at Kentucky. That was for mileage, meals etc.
    After the new memo that was put out last night, Harry, Ed and the whole board should resign, they’re running a great institution into the ground!

  9. Just to be clear, the “pay” students get — at least per article — is barely enough to pay for the drink you need after walking up Baxter Hill in September. When I was there — 2005-2009 — we were paid $12/article before taxes. I can’t speak to the editors’ weekly salaries, but I would bet a pinkie finger that they’re not enough to live on.

    • Yeah, after 10 years (I was there in 1992 – 1996), the writers apparently got a $5 raise per article (we made $7). Editors were salaried, and I recall joking that I actually took a pay cut because I made $30 a week (for everything — editing, writing, and so on) when as a writer, I usually turned out 5 – 6 pieces a week.

      I was perhaps naive but I just assumed no one got rich working there, and $173K in ATHENS GEORGIA is obscene.

      We never complained about the pay because we didn’t really do it for the pay, but at the same time, we didn’t dream that someone was making a fortune off our efforts. If so, the least we would have asked for was minimum wage.

      Frankly, I am not inclined to let this issue drop. The median household income in Athens, Georgia is $28,118. If the top guy is making more than 5 times that, *no one* employed there should be working for less than minimum wage, no matter how they spin it. Certainly bringing in non-student employees should lessen the ability to claim that it’s strictly a learning institution.

  10. I hope redanddead posts more soon. As Casey Stokes pointed out, two thirds of the $1.5m budget of a nonprofit, student-run newspaper went to management and general expenses, of which $173k (more than 10% of revenue, not 1%, Casey!) went to the publisher. In the nonprofit world, it’s not unusual for a CEO to make six figures, but for a small, student-run newspaper? I can’t imagine how the Board justified it.

    In fact, the outstanding question now is the Board’s character. The memo could’ve just been from a cranky, control-freak Board member. But it also could’ve been the Board’s effort at keeping their product non-controversial. That’s typically your goal if you want to maximize ad revenues, not produce fine student journalism and student journalists. Maximizing ad revenues is not a legitimate goal for a 501(c)(3). So it raises the question: Was the Board acting deliberately to protect or even grow the financial base in order to maintain or increase this outsized pay package? If so, who benefited besides Montevideo?

    Keep up the courageous work, redanddead. Given the backstory you revealed with the tax documents, I can’t imagine a resolution to this other than the Board’s resignation. If there is an explanation for these financials, I hope the Board will offer it publicly.

    • I was speaking of the raise in particular- $16k = ~1% of revenue- so the General manager receiving a raise a ~$50k is 3% of total revenues,10% of net revenue. Total salary, as you point out is over 10% of Total Revenue, or ~14% of Total Expense. Definitely not a market wage, nor sound business sense by the board.

  11. I would be interested in seeing revenue numbers after the switch to a weekly plus online format. How has that affected revenue? Given the posted tax documents, I would say the R&B was a very healthy business. Is the Publisher trying to protect his cash cow due to recent changes in revenue stream?

    Also, $173K plus a $16K kicker is a lot of money for a non-profit of this size to be paying to a General Manager, in my opinion. I could be wrong, but would be interested to see a salary comparison of the General Manager with other similar student newspapers.

  12. The paper has maintained their profit margin since the switch.
    Though ad revenue decreased somewhat, so did the cost of operation, leaving the paper in the same stable financial situation.
    Per the video, the financial statements show, generally, that the Red & Black found a viable operating system for a newspaper in an emerging digital market.
    In light of that, as I said above, this makes the actions of certain board members poor in both financial and ethical judgement.

  13. $173,000??? Are you kidding me? I don’t know if my former publisher at a daily newspaper in a capital city made that much.

    I hope you’re pulling IRS filings for other student papers to see if this sort of compensation is in line or out of whack. I’m stunned the figure is so high and I can’t believe that is the norm for student newspapers. Especially in an era when newspapers everywhere have been cutting staff and freezing pay.

    Holy moley. WWFD indeed.

  14. As a recent grad and former employee of the advertising department I am FLABBERGASTED. We were made to feel that the paper was barely getting by and it was our duty to get more business to keep things going (so the journalists upstairs could continue to produce the award winning student run paper we were ALL proud of….writers and account executives). We were paid a very small base stipend plus commission..Management a slightly greater stipend but I still don’t believe in the over a year I put in there that I ever made more than 2/3rds minimum wage for the hours I put in (and I was one of the most successful salespeople). I don’t regret it because that experience has landed me an excellent post graduation job but this information plus the reduced student role in the advertising department (yep there too) would have had me walking out as well

  15. Right after college I became one of the 5 full time salaried employees at the Red & Black, as the receptionist. They graciously paid me $12 an hour and took $275 a month out of my pay for my health insurance. I ended up netting around $8 an hour after taxes. I was aware of what everyone was paid because I had to stuff the paycheck envelopes every two weeks. Harry at this time was making over $100,000 a year while some of the kids in the graphic design department would make $12 every two weeks. One of the saddest things was that they kept the supply closet locked and you had to ask permission to even get a notebook to use or pens! Best of luck to you guys in making some much needed changes to this “non-profit” organization.

  16. Pingback: The Revolution will be tweeted: what I learned about social media and online journalism after @redanddead815 went viral « Digitize me, captain

  17. Pingback: Digitize Me, Captain » The Revolution will be tweeted: what I learned about social media and online journalism after @redanddead815 went viral

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