Wednesday, February 25, 2009

Hearst Threat to Close Chronicle Underscores ‘Terrible’ Climate

Hearst Co.’s plan to close or sell its San Francisco Chronicle newspaper unless it can cut more jobs signals that the industry’s advertising sales may be headed to new lows.

The publisher, already trying to sell its Seattle Post- Intelligencer, yesterday said it would seek voluntary buyouts for a “significant” number of its 1,500 employees after it lost $50 million last year. The announcement follows two newspaper owners filing for bankruptcy protection since Feb. 21.

Publishers including New York Times Co. and Gannett Co. are cutting costs and seeking to sell assets after forecasting further declines in print advertising sales. Philadelphia Newspapers LLC, publisher of the Inquirer, and Journal Register Co. filed for bankruptcy protection to reorganize their debt.

“Metro newspapers are facing a terrible environment in long-run terms,” said Paul Steiger, a former Wall Street Journal managing editor and director of the nonprofit news Web site ProPublica. “You’ve got to hope for economic recovery, but you’ve got to hope for a better business model, too.”

San Francisco may be the first large U.S. city to lose its main daily newspaper if Hearst isn’t successful within a few weeks to get the buyouts it is seeking.

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