San Francisco may become the largest US city to lose its main daily newspaper after Hearst Corp threatened to sell or close the San Francisco Chronicle unless it can push through more job cuts, Bllomberg News has reported.
The publisher, already trying to sell the Seattle Post- Intelligencer, said Tuesday that it would seek voluntary buyouts for a “significant” number of its 1,500 employees after the San Francisco Chronicle lost $50 million last year. The announcement follows two newspaper owners filing for bankruptcy protection since February 21.
“The Chronicle plays an important role in our civic life and we don’t want to see this treasured institution close its doors,” San Francisco Mayor Gavin Newsom said Tuesday in a statement. The California city is the nation’s 14th largest, with an estimated 744,000 residents, according to the US Census Bureau. The paper has a paid weekday circulation of 339,430.
The Associated Press (AP) had some backgrounder: [Link]
Hearst didn't specify a savings target or a deadline for wringing out the expenses. A Hearst spokesman didn't immediately respond to messages Tuesday. But management made it clear that the cost-cutting will require a significant number of layoffs.
"Our current situation dictates that we accomplish these cost savings quickly," Chronicle Publisher Frank Vega wrote in a memo to the staff. "Business as usual is no longer an option."
The Chronicle has given Hearst financial headaches since the New York-based company bought the newspaper in a complex deal valued at $660 million. The late 2000 acquisition proved to be ill-timed. Shortly after Hearst took control, the San Francisco Chronicle was hard hit by a high-tech bust that caused its advertising revenue to shrivel.
The newspaper's losses have been piling up ever since, despite previous job cuts and other austerity measures that were designed to stanch the bleeding. Now the 14-month-old recession, coupled with more advertising options on the Internet, has apparently pushed the 144-year-old newspaper to the breaking point.
Having lost more than $50 million last year, the Chronicle is off to an even worse start this year, said Hearst, as advertisers clamp down on their marketing budgets and increasingly divert more money to the Internet.
Given the challenges facing the Chronicle, Tuesday's grim warning hardly came as a surprise, said Kevin Fagan, who has been a reporter at the newspaper for 16 years.
"The mood here is more upbeat than you would expect," Fagan said. "There has been a lot of gallows humor but reporters are still doing what they do — write stories." He said the newsroom of about 275 employees is still clinging to hope that the paper will survive because there still appear to be ways to lower the sprawling operation's overhead.
Reuters had more: [Link]
The paper employs 275 news staff and is the 12th-largest in the United States, according to the U.S. Audit Bureau of Circulations, with average weekday circulation of 339,430. It is the 19th-largest paper by Sunday circulation.
Circulation fell 7 percent as of the six months ended September 30, 2008, compared with the same period a year earlier.
The Pulitzer Prize-winning Chronicle was founded in 1865, about a decade and a half after gold was found in California.
With the help of the local literary crowd, including Mark Twain and Bret Harte, the paper captured the largest circulation west of the Mississippi.
It covered the biggest events in the city's history, from the earthquake and fire of 1906 to the assassination of its mayor, George Moscone, and the state's first openly gay elected official, Harvey Milk, in 1978.
The paper has reflected many changes in U.S. culture first seen in its own often cutting-edge city, including the shift from beatnik -- a word it may have coined -- to hippie in the 1950s and '60s and the shock waves from the AIDS pandemic in the city's sizeable gay population.
