San Francisco Chronicle In Danger Of Closing

SAN FRANCISCO — The San Francisco Chronicle joined the lengthening list of imperiled newspapers as its owner set out to purge the payroll and slash other expenses in a last-ditch effort to reverse years of heavy losses.

If it can't reduce expenses dramatically within the next few weeks, the Hearst Corp. said Tuesday it will close or sell the Chronicle, northern California's largest newspaper with a paid weekday circulation of 339,430.

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.

Several other newspapers around the country are facing a fate similar to the San Francisco Chronicle's.

Just last month, Hearst laid out plans to close the Seattle Post-Intelligencer if a buyer isn't found before April. A similar fate awaits The E.W. Scripps Co.'s Rocky Mountain News in Denver and Gannett Co.'s Tucson Citizen in Arizona unless buyers are found for those papers.

But there would still be at least one large daily newspaper left in those other big cities where publishers are mulling a shutdown.

The only other daily newspaper in San Francisco _ a city with a population of about 800,000 _ is the Examiner, which is given away for free. Hearst owned the San Francisco Examiner, but sold it for just $100 and even provided the new owners with a $67 million subsidy as a condition for completing the Chronicle acquisition. The Examiner changed hands in 2004, and is now owned by the Anschutz Co.

Comments

[Phil Jackson]

I've been delivering the Chronicle since 1983, in the past year my route has gone from approximately 250 Daily-Sunday customers to less than 100 as of this morning. I am always finished with my route by 6:00 AM. One reason some customers get their paper late is because there are carriers that deliver multiple routes and can't finish by the delivery deadline. The deadline for delivery of the Chronicle on Mondays through Saturdays is 6:30am. On Sundays, the delivery deadline is 8:00am.

[knerd]

How are bloggers going to blog if all their printed news sources dry up? Investigative reporting and factual objectivity will disappear along with the newsprint that delivers them. And one by one, the Internet news sources will fall away--leaving perhaps only a few.

It's something to think about, anyway...

[whatthel]

Newspapers have gone the way of the telegraph. Who wants to read yesterday's news today.

[PlayTOE]

The San Francisco Chronicle has a paid weekday circulation of 339,430.

That seems big enough to keep a little paper afloat. What went wrong?
The San Francisco Chronicle was hard hit by a high-tech bust that caused its advertising revenue to shrivel.
It is conspicuous that this is a liberal paper ... and we see it in trouble in times when liberal views are on the rise. The same situation shows in other newspapers.
Something is strange about this.

Did all the Conservative business just pull their adverts out of Liberal newspapers?

[jalowe1957]

Somewhere down the line, newspapers have lost all its influence and all its relevancy.

Denver and Seattle are now learning the hard way. Could San Francisco and Los Angeles be next?

[petew1]

I think this is sad news.

http://wordsofwitte.com/2009/02/27/

[research]

Paper is an obsolete way of transmitting information.

[nah415]

I live in the Bay Area and used to read the Chronicle regularly. However I began to have difficulty with delivery of the paper about 10 years ago. I get up at 5am but the paper wouldn't be delivered until after 9am. All of my calls to the paper and to the distributer were met with such a bad attitude and disregard for me as a subscriber that I discontinued my subscription. I then attempted to buy the paper from the corner box but the papers there wouldn't be delivered until 9am either. Eventually I just gave up and started to read the NY Times instead. Not surprisingly, I found I didn't miss the Chronicle.

The SF Chronicle has not been a very good paper for many years but their business sense is abysmal. The Sunday paper is nothing but advertisements and trivial stories about fluff and such. They recently spent who knows how much changing the LOOK of the paper and the result is a complete failure. The problem is not how the paper looks -- the problem is the paper has not kept up with the changing times.

I'll be sorry to see the Chronicle go but the gap it leaves will likely be filled by a media source that is more appropriate for the changing times.

[Geranium]

Another rag bites the dust.

[KataVideo]

339k daily subscribers? in a market as large as the bay area? good riddance. fish are insulted to be wrapped by it.

[nah415]

The so-called "service" given to subscribers is so abysmal, I"m surprised they still have this many households willing to put up with it. They are inconsistent with the delivery times. If you get up early to work, you're out of luck. Your paper will arrive so late you can't it until the evening. And their attitude about this problem does nothing to entice or keep subscribers.

[goodog]

"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."

Tense?

[AnotherunhappyDemocrat]

As bad as the Chronicle is - and I've had my considerable issues with it over the years - the idea of Northern California's largest newspaper folding is not good news. We may not be thrilled with our conservative, corporate media and the idiotic chattering classes that they fund, but I hope that we can all see some value in keeping a professional media viable in this country. Because if the Chronicle, the Seattle P-I (not a great newspaper either, but one whose demise I don't welcome) and the LAT fold, then what is next for us? Blogs like this one are quite good; however we don't come to HuffPo for "news". We come here for analysis (and to argue), I hope. Will we reach a point (soon), in which HuffPo and the other big blogs begin to hire reporters? Would that be a positive development?

Again, as annoyed as I get with our media, I am not yet willing to toast its demise.

[Alonso]

This is not a news paper. It is an editorial end to end. No wonder people get bored.

If you have good content you will see profit. Why you think wall street journal is doing fine.

Content and journalism.

Other wise it is NOT worth saving

[WiltonDiary]

Wall Steet Journal is not doing fine! If it weren't for RM and his latest cash infusion the WSJ would be DEAD!

[Malarkey]

mcthg is correct - all papers are not worth saving. I live in S.F. and the Chronicle is mostly embarrassingly bad and somewhat conservative. Not the paper it used to be when I read it in the 1970s. I do look at their website, sfgate.com, occasionally. But for real analysis and reporting, I stick to beyondchron.org and the Bay Guardian newspaper.

[BluebirdofUnhappiness]

What will all the news aggregators like this do when the actual news writers go broke and close down?