Tech & Biz

Hearst Threatens to Close or Sell San Francisco Chronicle

by Tina Kells | February 24, 2009 at 04:37 pm

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There have been some shake ups at Hearst this week and it is only just beginning. Just one day after new digital advisor was hired to assist CEO Frank Bennack Jr, the company is threatening to shut down the San Francisco Chronicle if an agreement can't be reached with the paper's unionized workers.

Yesterday, the big news out of Hearst Corporation was one hiring—that of Yahoo’s Neeraj Khemlani as digital advisor to CEO Frank Bennack, Jr. Today’s news from the private publishing company at best means more cuts at the San Francisco Chronicle and, at worst, the paper’s closure.

Heart stated, rather abruptly, that the San Francisco Chronicle was a money pit and that major changes would be needed to keep it in business. Citing a near decade of losses, topped with a $50 million hit in 2008, Hearst says it can no longer afford to keep the print publication running.

In a public statement posted at the Hearst corporate website, the rise of digital media and coinciding collapse of print journalism combined with a dire economy were noted as motivating forces behind the announcement.

“Because of the sea change newspapers everywhere are undergoing and these dire economic times, it is essential that our management and the local union leadership work together to implement the changes necessary to bring the cost of producing the Chronicle into line with available revenue,” said Frank A. Bennack, Jr., vice chairman and chief executive officer, Hearst Corporation, and Steven R. Swartz, president of Hearst Newspapers. They added, “Given the losses the Chronicle continues to sustain, the time to implement these changes cannot be long. These changes are designed to give the Chronicle the best possible chance to survive and continue to serve the people of the Bay Area with distinction, as it has since 1865. Survival is the outcome we all want to achieve. But 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.”

The company is warning that the union will have to accept deep cuts in overhead costs, including substantial job losses, if the San Francisco Chronicle is going to stay in the Hearst family.

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Roy C

at 18:02 on February 24th, 2009

The SF Examiner used to be the Hearst paper, but they sold it to buy the Chronicle which was the morning paper and more successful.

Because of anti-trust, the couldn't own both.

The Chronicle will not survive. It has basically become the mouthpiece of the politically correct of SF.

You have to know that I was there when Jim Jones was there and Moscone and Milk were killed.

Moscone and the Examiner, the then Hearst newspaper, literally kept the lid on all the bad news coming out of Jim Jones' church because he was so in with Moscone.

That propensity for distortion has not been overcome to the best of my knowledge. There are some horrendous crimes there that seem to get buried until the national press gets wind of it.

The Hearsts have some bad karma and I don't just mean "rosebud", the brand on Citizen Kane's sled, the film made based on Hearst, the founder's life.

mtammas

at 20:05 on February 24th, 2009

This is not the only media giant to crumble. However, the Hearst Corp. won't be the only traditional 'news' empire to take advantage of tough economic times to cut jobs, overhead and outlets despite being in major trouble before the fall of 2008. Watch for more of the same in Canada, too.

The despicable part is that many will hide behind the financial upheaval, citing it as the reason for downsizing moves. No truth or balance in the reporting of their own stories.