The Chronicle death watch - Page 2

Hearst's threat to shutter the San Francisco Chronicle sends shockwaves through an industry in crisis

"Our goal is a business model that seeks, by 2011, to get more than 50 percent of our revenue from circulation revenue and digital advertising sales."

And the same day that Chronicle workers learned that their newspaper might be facing the axe, Hearst cut 75 out of 135 newsroom positions at the San Antonio Express-News in Texas.

As San Antonio Express-News editor Robert Rivard told his staff, "Incremental staff and budget cuts, we are sorry to say, have proven inadequate amid changing social and market forces now compounded by this deepening recession."

"It's like death in here today," a source, who asked to remain anonymous, said. "Everyone who was laid off is still here, working 'til March 20."

And like the growing pool of newsroom refugees nationwide, the survivors of this San Antonio massacre have since met to brainstorm about other newsgathering business models.

"We all have kids, so we need salaries and insurance," our source confided, "but we're going to start researching some options, see what's working and not in other places. The time is ripe."


Meanwhile, sources within the Chronicle — who asked to remain anonymous given the ongoing negotiations — claim that there isn't much hope that Hearst will come up with innovative solutions, but that there is a chance the paper could be sold to Dean Singleton, the only other major Bay Area newspaper publisher.

Singleton's MediaNews Group owns the San Jose Mercury News and the Contra Costa Times, and has lost several antitrust cases in recent years. Any deal with the Chronicle would require Department of Justice approval — and would give one owner control of nearly every daily newspaper in the Bay Area.

The media baron refuses to comment on whether he is considering buying the Chronicle.

"We'll just watch it play out," Singleton told Editor and Publisher's senior editor, Joe Strupp, last week. "I am not going to speculate on what could happen."

But, as Strupp noted, "MediaNews remains highly leveraged."

Hearst Corporation currently holds a substantial amount of MediaNews debt, owns 31 percent of MediaNews Group newspapers outside of the San Francisco Bay Area, and recently took control of four Connecticut papers that MediaNews was managing for Hearst.

Former Chronicle city editor Alan Mutter believes Singleton could still be in the running.

Observing on his Reflections of a Newsosaur blog that "To wipe out a $50 million loss, let alone make a profit, the [Chronicle] would have to eliminate 47 percent of its entire staff," Mutter later clarified that he believes it's "extremely unlikely" that the Chronicle will reduce its staff to that extent.

"But, it will try to do some serious cost cutting, and it could be sold, potentially, to MediaNews, because Singleton would not necessarily be expected to put up any money," wrote Mutter, noting that hundreds of people involved in the Chronicle's advertising operations could be eliminated if Singleton took over, since ads for MediaNews' papers are already assembled in India. Another motivation for Hearst to find someone to take over the Chronicle lies in the multimillion dollar printing plant that Hearst just built.

"But no one expects the business to break even now," Mutter said.