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VIDEOHearst Flees San Francisco?
By
Scott Reeves Feb 25, 2009 2:30 pm
Publisher may shut down city's largest paper.
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San Francisco suddenly looks like a good bet.
Hearst Corp. says it must cut costs at the San Francisco Chronicle within weeks or sell the newspaper. If a buyer can’t be found, the 144-year-old paper will be closed.
The threatened closure of Chronicle could be just another round of hard-nosed labor negotiations with the paper’s unions, or it may be that Hearst -- publisher of a range of magazines including Esquire, Cosmopolitan, Marie Claire and Popular Mechanics -- no longer wants to be in the newspaper business.
Hearst bought the San Francisco paper in 2000 for about $660 million and has spent about $1 billion to keep it alive. Hearst says the Chronicle lost about $50 million last year. The paper employs about 1,500.
But the problem is almost certainly deeper than newspaper ennui. The Chronicle has lost about a third of its circulation since 2001. It now sells about 339,500 copies daily in the nine-county San Francisco Bay Area with a population of about 6.8 million.
Classified advertising, once the key to newspaper revenues, has moved online to websites devoted to employment, real estate, apartments, autos, singles, pets -- you name it -- and will never return to newspapers. Then there’s Craigslist.
Display advertising has collapsed as major department stores and local car dealers cut back in the recession. There’s no salvation in bargain retailers, even as consumers look to stretch a buck. Wal-Mart, the world’s largest retailer, relies heavily on direct mail and does little newspaper advertising. This tactic allows Wal-Mart to target its advertising by census tract and zip code. Zoned editions of newspapers can’t match such finesse.
The closure of the Chronicle would be a stunner, because the San Francisco Bay Area is the home to several major universities, Stanford and the University of California at Berkeley, as well as Silicon Valley. If a newspaper can’t make money in a dynamic region like the Bay Area, the basic question is: where can print survive?
The answer for general circulation publications may be nowhere as the Great Newspaper Die-off accelerates in the economic downturn.
Major newspaper companies have filed for Chapter 11 bankruptcy protection since December: the Tribune Co., (publisher of the Chicago Tribune and the Los Angeles Times); parent company of the Philadelphia Inquirer and Philadelphia Daily News; the Minneapolis Star Tribune; and Journal Register Co., publisher of about 20 daily papers in half a dozen states, including the New Haven Register.
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