Hearst Corp, one of the largest US publishers, is seeking a buyer for its Seattle Post-Intelligencer newspaper within 60 days after losing $14 million last year amid dwindling circulation and advertising revenue, according to news reports.
The privately held magazine and newspaper publishing company will seek a buyer for the 145-year-old daily newspaper, as well as its interest in a joint operating agreement that publishes the Post-Intelligencer and its competitor, the Seattle Times, Hearst said in a statement on Friday. If it fails, it will pursue other options, including publishing the newspaper only on the Internet, or shutting it. Continuing to print the newspaper was not an option, Hearst said.
The Post-Intelligencer, which was founded in 1863, has had operating losses since 2000. The loss will probably widen this year from $14 million in 2008 which has owned the publication since 1921.
The Seattle Post-Intelligencer’s average paid weekday circulation was 117,572 as of September 30, according to the Audit Bureau of Circulations. The cross-town rival Seattle Times had a weekday circulation of 198,741.
Hearst hired Bronxville, New York-based investment bank Broadwater & Associates LLC to help with the sale, Managing Director Robert Broadwater said in a telephone interview to Bloomberg News. He declined to specify how much Hearst was seeking for the Post- Intelligencer.
The Post-Intelligencer is under a joint operating agreement with the Seattle Times in which the latter arranges advertising, printing and distribution for both newspapers. Under terms of the agreement, the Times gets 60 per cent of the combined revenue of the newspapers after excluding operating costs.
In a separate memo to employees, Hearst Corp Chief Executive Frank Bennack, Jr said, "Nothing we are doing here today is meant in any way to suggest that we don't believe in the future of print publishing in our other newspaper markets." Hearst does not intend to buy the Times, he added.
The New York Times had some briefs about developments in the newsroom: [Link]
Steven R. Swartz, president of the company’s Hearst Newspapers division, flew from the corporate headquarters in New York City to deliver the word at a 10-minute newsroom meeting convened shortly after noon in Seattle, standing alongside Lincoln Millstein, Hearst’s senior vice president for digital media; Roger Oglesby, the Post-Intelligencer publisher; and David McCumber, the managing editor. After the meeting, the company issued a press release confirming the news.
Mr. Swartz, who took over the newspaper chain last month, said The Post-Intelligencer, owned by Hearst since 1921, had lost money every year since 2000, including a $14 million loss in 2008, and that the picture would only worsen in 2009.
He explicitly ruled out a Hearst purchase of the rival Seattle Times, which had long been rumored to be the company’s plan.
“People are crushed,” said Lewis Kamb, 38, a reporter at The Post-Intelligencer. “My wife and I both work for the P-I, and we’ve got a 5-month-old baby boy. We probably have to put our house on themarket, and there’s no one buying homes right now.”
Several employees who attended the meeting said that Hearst executives refused to answer questions about potential severance payments. The Newspaper Guild’s contract with the paper, which provided for severance, expired in 2008 and has not been replaced.
The employees said they and their colleagues were stunned by the announcement, and that many of them left the meeting in tears. Some were insulted at first hearing the news in a report by local television station on Thursday night; as one reporter said, “they let us get scooped on our own news.”
The Post-Intelligencer too reported in the developments: [Link]
P-I employees were silent as they listened to the announcement, which lasted about 10 minutes. Some of them shed tears. Others held up cell phones or voice recorders in press-conference fashion.
Editorial Cartoonist David Horsey was nearly speechless.
"This is awful, awful, awful," he said afterward. "I was just standing there looking around at all these people I love to work with. I don't want this to happen to me or them."
He said that he's been watching the news about the newspaper troubles nationwide, but that doesn't make it any easier to understand the business reasons behind the decision.
"You realize you're part of a huge implosion of the newspaper industry," he said.
P-I online reporter and blogger Monica Guzman cried at her desk with her head in her hands. She had just sent a Twitter post to the Web, saying, "Please, let us be O.K."
"It doesn't feel real," she said. "You hear about the problems in the industry all over the country and you start to think, 'Well, nothing that bad has happened to us yet, so maybe it won't.' You know it's naïve. You know it's stupid. And then it happens."
She said the need for journalists hasn't gone away.
"I just hope that someone will always do it with the dedication and the passion that I've seen in this newsroom," she said. "It's hard to look around at so much talent, potential, and know it could all end."
