Hearst Corp. threatens to close Chronicle

Scott Beale/Laughing Squid

The Hearst Corp. announced Tuesday that it would be forced to sell or close the San Francisco Chronicle if it could not make needed “critical” cost-cutting measures, including job cuts, in coming weeks.

The company said the paper lost $50 million in 2008. A memo to employees from the publisher, Frank Vega, said the paper could no longer bear the “staggering losses,” which he said were worsening in the current recession.

“Survival is the outcome we all want to achieve,” said a statement from Hearst quoting two top executives, Frank A. Bennack, Jr., vice chairman and chief executive officer, Hearst Corporation, and Steven R. Swartz, president of Hearst Newspapers. 

“But without the specific changes we are seeking across the entire Chronicle organization, we will have no choice but to quickly seek a buyer for the Chronicle or, should a buyer not be found, to shut the newspaper down,” the statement said.

The Hearst-owned Seattle Post-Intelligencer will be shut down in March unless a buyer is found.

“This is a serious situation,” said Carl Hall, a representative of the Northern California Media Workers Guild. “We’re interested to hear the company’s explanation.” The Guild, along with the Teamsters, represents most of the Chronicle’s employees.

The Guild is meeting Wednesday with Hearst Corp. representatives to begin an impromptu round of negotiations. “We will talk to them in good faith. We are not going to pretend the problem doesn’t exist,” Hall said.

“It’s pretty clear they want to reach an agreement with the union and it is our intent to reach an agreement that everyone can live with,” Hall said. “It’s important for everyone to face up to the reality that the business is in deep trouble.”

Hall said he did not know the magnitude of job cuts, but said he doubted that eliminating even hundreds of jobs would necessarily make a difference, because the company lost $50 million last year.

Chronicle Editor Ward Bushee did not return calls for comment Tuesday night.

The announcement comes amid several other major changes at the144-year-old paper. This month the paper launched an extensive print redesign. And a Canadian company, Transcontinental Inc., is set to take over the Chronicle’s printing at the end of June.

"Is this a move to go just to a web-based newspaper? I wouldn’t be surprised," said Robert Rosenthal Executive director of the nonprofit Center for Investigative reporting in Berkeley and the former managing editor of the San Francisco Chronicle. "I think anything they do now will involve major cuts of journalists and accelerate the downsizing. It will mean less information for the public and it will be a setback in terms of keeping a watch on government, business and all the other things that the press has played a crucial role in covering for over 200 years in this country.”

Related: TPP Blog, "San Francisco Chronicle could close. What will fill the void?

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