ROCKLAND, Maine — A Village Soup official is blaming the bad economy for the company’s recent decision to institute a 10 percent pay cut for all employees.

“It was extremely difficult,” said Ron Belyea, vice president and chief operating officer of Village Net Media. “It was either a 10 percent pay reduction or a 10 percent reduction in work force.”

The decision will affect the company’s 95 employees who work at its Rockland printing plant and four newspapers, including the weeklies Bar Harbor Times, Capital Weekly and Republican Journal, and the tri-weekly Herald Gazette, which covers Knox County.

Belyea said that he hoped the pay reduction would be temporary and that the company won’t have to lay off any of its employees.

In some respects, he said, Village Soup is doing all right.

“Circulation is holding steady,” he said, “and our Main Street merchants are supporting us nicely.”

But the media company’s revenue stream has been reduced lately due to decreased demand for auto, real estate and help wanted advertisements — a problem that is affecting many of the nation’s newspapers.

“I’ve been doing this a long time and I’ve never seen anything like this,” said Belyea, who has worked 25 years in the newspaper industry.

The Village Soup has an innovative business plan with its four newspapers and one consolidated Web site,, including a larger-than-average percentage of advertisement revenue that comes from the Internet. Belyea said his company generates 19 percent of its ad revenue through online sales. In comparison, The New York Times’ online ad revenue accounts for just 6 percent of its total advertisement sales, he said.

“We think our model is still the way to go,” Belyea said.

However, even the company’s forward-looking business model was no match for the tanking national economy, he said.

“I think what’s causing this is fear,” Belyea said of the worsening recession. “It’s just bad news, bad news all the time. I think people are just in the fetal position.”