Chronicle Could End Up in Bargain Basement

Hearst "lucky" if they can even sell the building

The San Francisco Chronicle is for sale, and if the paper can't find a buyer, Hearst Corporation is threatening to shut it down.

Ironically enough, the news was first broken by blog SFist, which obtained a memo sent to employees of the company by publisher Frank Vega.

"Despite all of our best efforts as an organization, The Chronicle continues to show staggering losses each week...If we are unable to accomplish these reductions in the immediate future, Hearst Corporation, which owns The Chronicle, has informed us that it will offer the newspaper for sale or close it altogether."

The newspaper has been losing money for years -- rumored to be as much as $1 million a week.

The announcement puts pressure on the unions to agree to more layoffs and wage and benefit concessions, though it may be too late for that.

If the doors to the company's offices at Fifth and Mission are finally closed, it would leave San Francisco with no daily paper. The San Francisco Examiner, which Hearst sold for a song in 2004 after purchasing the Chronicle in 1999, is a free tabloid that only publishes six days a week.

Any deal for the Chronicle could be just as bad. "Hearst would be lucky to get the value of the physical assets if they found a buyer," media analyst John Morton told the San Jose Mercury News.

Changes to top management such as the hiring of Vega as publisher and the replacement of longtime executive editor Phil Bronstein, as well as multiple format changes and buyouts of reporters and staff, have done little to turn that revenue frown upside down, apparently.

Hearst also publishes the Seattle Post Intelligencer, which has been up for sale since January and may stop publishing as early as April -- though the employee union is considering making an offer, and there is some hope that it may continue online but not in print.

While online news and free classified services like Craigslist have often been blamed for declining circulation and revenue, respectively, the economic downturn means the paper will probably lose more advertising revenue as local businesses cut back on expenses -- for instance, local movie theaters may stop running paid listings, which could cost the paper another $400,000 a year.

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