Hearst, Chron struggle to find steady footing
By: Ken Garcia
Examiner Staff Writer
March 3, 2009
The newspaper industry is in trouble when arguably the best paper in the world has adopted a survival strategy it calls the "last man standing."
That’s what The New York Times hopes to be, which is not necessarily good news for the rest of us. And the signs of trouble are coming so fast, the only thing more dangerous than being a journalist these days is being an investment banker.
On Friday, a very fine newspaper, the Rocky Mountain News in Denver, ceased publishing after 150 years. A death vigil is taking place at the Seattle Post-Intelligencer, which happens to be owned by the same company, Hearst Corp., that announced last week that unless it gets major concessions and sizable cuts in the work force at the San Francisco Chronicle, it will consider selling or shutting down the paper.
Newspapers from Philadelphia to Minneapolis to Los Angeles have filed for bankruptcy, and others are going through major cost-cutting moves, suspending stock dividends and shedding staff, sections and, most importantly, talent. The bedrock upon which the Fourth Estate stands is shaking, and all industry officials can do at present is hope that ground doesn’t liquefy.
The capper may have come last week when it was announced that the American Society of Newspaper Editors decided to cancel its annual meeting because of the worsening industry crisis. The decision was reportedly made so that editors could remain at home to help bail out their sinking ships.
Here at home, I can say that the problems with the Chronicle are hardly new. I was one of 100 or so editorial employees who took a buyout in 2005 — and that was about three buyouts ago.
You could argue that New York-based Hearst is the most inept, unlucky or patient newspaper company in America, and in each case you would be right. It stumbled from the day it finally wrapped its hands around one of the last family-owned papers in the country, vastly overpaying for that right and then immediately falling on its face in court, where it got handed its briefcases in a monopoly lawsuit that led directly to the birth of the new Examiner.
And shortly after paying about $730 million for the ability to run a historic brand in a great market, Hearst received the sunny news that the dot-com boom was officially over. Ad revenues dried up and losses mounted. Hearst said last week that it lost $50 million last year, without noting that by its standards of ownership for the Chronicle, that was actually a good year.
After sinking more than $1 billion into what it thought was going to be its flagship enterprise, Hearst is finally waving the flag, trying to negotiate with its many unions to accept steep cuts or else walk away from the scene entirely.
"The Chronicle is going to be a much smaller organization in the next 60 days or it will be gone," said longtime media executive Alan Mutter, who was once the No. 2 editor at the paper. Mutter predicts that Hearst will try to rid the paper of about half its 1,500 employees in the coming weeks. Union representatives wouldn’t discuss specific numbers, but said those figures are "in the ballpark."
Yet after having the steepest circulation decline of any newspaper in the country during the past few years, the Chronicle has not found any formula for success, only a penchant for moving too slowly, changing direction too often and, perhaps most sadly, becoming less colorful and increasingly irrelevant.
At one point, the paper decided that its main focus would not be on city news. And when subscribers complained, they were told by the Chronicle’s brass that it wasn’t a San Francisco paper, "but a regional newspaper based in San Francisco."
And that, as much as a number of poor business decisions, contributed to its fall. The Chronicle lost its sense of place. Its future now looks bleak, and you may soon have to read all about it here.
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