On the same day President Obama said “the day of reckoning has arrived,” Hearst Corp. publicly threatened to shut down the Chronicle unless it could cut $1 million in costs per week, and cut those costs fast. How fast? Union leaders are to meet with management this morning. Reaction in the past few hours has come from every corner. Here are some links:
- • Reuters: “More than 100 employees gathered in a conference room to hear the news from editor Ward Bushee and publisher Frank Vega after receiving a message about a mandatory staff meeting. ‘Some people were crying at the meeting,’ said Rachel Gordon, 47, a transportation reporter at the paper. ‘But people are trying to get the newspaper out for tomorrow.’ ‘We knew it was going to be ominous when we got that message,’ Gordon added. ‘[Publisher Frank Vega] said Hearst really wants to make this work, that shutting us down is a last resort.”
* KGO ABC7: “It has endured earthquakes, fires, and other calamities as San Francisco’s newspaper. It has always survived. Nevertheless, the Chronicle is also a business, like any other business it must live within in its means, but it has not,” said Ward Bushee, the executive vice president and editor of the San Francisco Chronicle.
• The Merc reached union leaders: “When you’re talking $50 million to $60 million in losses a year, I’m not sure how you replace that by cutbacks,” said Rome Aloise, principal officer of Teamsters Local 853, which represents about 400 production workers and drivers. “It’s really the revenue side that is the problem. How do you fix that by cutting wages?”
“We’ll listen to what ideas they have to achieve the savings they need,” said Doug Cuthbertson, executive officer of the California Media Workers local of the Communications Workers of America, which represents the company’s white-collar employees. Cuthbertson said meetings with management were scheduled for this morning.
Media observers speculated Tuesday that the ultimate outcome might be a distress sale to Denver-based MediaNews, owner of the Mercury News and all the other major daily newspapers in the Bay Area. MediaNews chief executive and vice chairman Dean Singleton declined to comment.
• Recovering Journalist: “…Hearst has now brought the Chronicle officially to the brink of extinction, which would make San Francisco the first major American city without a major daily newspaper (in respect of the sick, we’ll hold off any jokes about San Francisco never really having had a major daily newspaper!).”
• NYT: “A Hearst executive called the statement “a warning” to the unions, and said that the company did not want to close the paper. He was granted anonymity because he was not authorized to speak for the company.”
• Bloomberg: “This has to happen quickly,” Mark Adkins, the Chronicle’s president, told newsroom staff yesterday. “We are talking about days and weeks.” The newspaper’s editor, Ward Bushee, said he wasn’t aware of any potential buyers for the paper.
• Examiner’s Paul Springer: “It’s not fraud, but it’s relevant for more reason than one. … The Hearst Corporation has announced that it will probably have to shutter the hoary San Francisco Chronicle. Though its demise will be mourned by many with fond recollections of columnists like Stanton Delaplane and Charles McCabe, the Chron has done little to distinguish itself in terms of writing talent in recent years.”
• Contra Costa Times: “Right off the bat, the Chronicle was hugely overstaffed,” said John Morton, a media analyst. “It was a gesture on Hearst’s part to their loyal staffs. If Hearst had been more coldhearted when they took over, that would have been less of a problem. But they wound up with an overstaffed company.”
• AP: 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.
After losing more than $50 million last year, Hearst said the Chronicle is off to an even worse start this year 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 appears to be ways to lower the sprawling operation’s overhead.
• Bambi Francisco: While Hearst may shut down the paper edition, it doesn’t say anything about shutting down sfgate.com. Phew! Good thing. Where would I get my local movie information from if it didn’t exist?
• Houston Press, an alt-weekly: Good Lord, The Chronicle’s Owner Is On A Paper-Killing Rampage
• ValleyWag: The absence of a strong newspaper, a contender with the New York Times, Washington Post, or even Los Angeles Times, has long frustrated the intelligentsia of the Bay Area. Instead, we have a sorry ink-on-dead-trees product that even some employees call the San Francisco Comical.
• Martin Langeveld of the Nieman Journalism Lab: MediaNews and Hearst should join forces to produce a great Sunday paper as well as highly profitable Friday and Saturday editions.
• Alan Mutter, a former Chron editor turned venture capitalist: To wipe out a $50 million loss, let alone make a profit, the paper would have to eliminate 47% of its entire staff, assuming an average annual cost of $80,000 per employee for salary, benefits and taxes. … Unlike many of the other papers that have been on the block for months with no takers, the Chronicle has a potential buyer in MediaNews Group … [Clint Reilly sued to stop the two companies
from joining forces before] … Asked today if he would oppose teaming the Chronicle with MediaNews, Reilly said he would have to think about it.