Hearst Plans To Slash, Sell or Shut Paper in Bay Area (Wall Street Journal, 25 Feb 2009)Signaling the newspaper industry's deterioration from malaise to crisis, Hearst Corp. said it may close the San Francisco Chronicle unless it can quickly slash costs at the money-losing daily.Hearst said it will seek "critical cost-saving measures," including a steep reduction in the Chronicle's work force, which numbers about 1,500. If it can't reach its cost-saving target "within weeks," Hearst said it will seek a new owner for the Chronicle. And -- at a time when few investors are willing to shell out money for large newspapers -- the company said it will close the paper if it can't find a buyer.
The possible closure of the Chronicle, the 12th-largest U.S. paper and Northern California's largest daily, illustrates the accelerating decline across the newspaper industry.
Advertising revenue is dropping faster than publishers can slash staff, stock dividends and other costs. Department stores, auto dealers and other local businesses have further curtailed ad spending after the holidays, pushing already struggling papers closer to the edge. Two publishers filed for bankruptcy protection last weekend, and few metropolitan dailies are on a healthy footing.
Observers have been waiting to see which major U.S. city will be the first to go without a major daily newspaper, and San Francisco is a front-runner for the role. Unlike many big newspaper chains, Hearst has a healthy balance sheet, but the privately owned company says the Chronicle has posted significant losses since 2001, including a loss of more than $50 million last year.
Of course, the San Francisco Bay area is also one of the most wired places on the planet...