Hearst threatens to sell or close S.F. Chronicle

Posted by Caroline Huber on February 25, 2009 at 9:47 AM

The Hearst Corporation threatened Tuesday to sell or close the San Francisco Chronicle unless it could make cost reductions, including job cuts of union and nonunion employees. Hearst is demanding concessions from its unions, and an anonymous Hearst executive called the statement a "warning" to the unions, asserting that the company does not wish to close the paper.

A statement by Frank A. Bennack Jr., Hearst's vice chairman and chief executive, and Steven R. Swartz, president of its newspaper division said, "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."

According to the New York Times, the California Media Guild, a union representing many Chronicle Employees, has not responded to this surprising ultimatum from the Chronicle.

The Chronicle, which has daily circulation of 339,000, lost more than $50 million last year and expects to lose even more this year. Other Hearst papers are facing similar problems, and Hearst announced in January that the Seattle Post-Intelligencer would close if a buyer could not be found, though its future remains undecided.

The Chronicle news staff currently consists of about 275 people, and it is the largest newspaper in the San Francisco Bay Area. Many local papers have been forced to make cut backs due to the current financial climate. If it closes, San Francisco will become the largest city in the country to lose its dominant newspaper. Will more follow?

Source: The New York Times, The Wall Street Journal