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Jeff Chiu/AP
The Chronicle City Plant in San Francisco.

Poorly Performing San Franscisco Chronicle May Be Nearing End of Its Run

February 25, 2009 12:01 PM
by Rachel Balik
The San Francisco Chronicle has been suffering losses since 2001; publisher Hearst says major restructuring is needed to save it.

Reductions Necessary to Slow Chronicle's Decline

The San Francisco Chronicle saw more than $50 million dollars in losses last year, and now must face serious cutbacks if it is to stem the tide. Publisher Frank J. Vega acknowledged in a San Francisco Chronicle article that the paper had failed to "live within ... [its] means." The paper's owner, the Hearst Corporation, has announced that it will lay off both union and nonunion staff.

On its Web site, Hearst said it would do everything it could to save the paper, but that if the losses continue, it would have no choice but to seek a buyer or close the paper, which was founded in 1865. But ultimately, the target is "financial health" for the Chronicle. This summer, paper will be printed on new presses, in the hope that improved color reproduction technology will add value to the paper.

Background: Other publications also struggling

Newspapers across the United States are facing flagging sales and advertising due to the prevalence of free online content and a faltering economy. Many publications have suffered so badly that they have been forced to restructure their finances, file for bankruptcy or go up for sale.

Another Hearst-owned, West Coast paper, the Seattle Post-Intelligencer, recently went up for sale. The only other paper in the city, the Seattle Times, may also shut down; if both publications were to close, Seattle would be the only major U.S. city without its own newspaper.

The publisher of the Philadelphia Inquirer and the Philadelphia Daily News has filed for Chapter 11 bankruptcy in the Eastern District of Pennsylvania. Reuters reported that Philadelphia Newspapers LLC, which publishes several other local papers in the Philadelphia area, sought $25 million in February 2009 from bankruptcy courts so that it could pay its staff while it works on restructuring. The company stated that after 11 months of negotiating with its lenders, it racked up an additional $13.4 million dollars in interest fees.

Philadelphia Newspapers LLC made its announcement just one day after the Journal Register Company also filed for bankruptcy, citing $692 million worth of debt, a number that exceeds its assets by about $100 million. The publisher owns 20 daily newspapers that serve the Northeast, including the New Haven (Conn.) Register. According to the Associated Press, the company's Web site states it hopes to emerge from bankruptcy as "more financially viable."

In December, Tribune Co., one of the nation’s largest newspaper publishers (controlling the Los Angeles Times, Chicago Tribune, Baltimore Sun, Orlando Sentinel, Hartford Courant, the Morning Call of Allentown, Pa. and Daily Press of Hampton Roads, Va.) sought bankruptcy protection, due to a $13 billion debt and a loss of advertisers.

Related Topic: Failed magazines

Things are so bad for print media that Adverstising Age has published a Guide to Magazines That Have Ceased Publication. The list includes the publications that closed down in 2008 and some that are scheduled to shut down in early 2009. Most of the magazines were targeted at specific groups, such as teens, Latinos, gamers, children or women.

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