www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/02/24/BUannounce.DTL
Comments Georgia (default) Verdana Times New Roman Arial Font | Size: (02-24) 14:30 PST NEW YORK -- The Hearst Corp. today announced an effort to reverse the deepening operating losses of its San Francisco Chronicle by seeking near-term cost savings that would include "significant" cuts to both union and non-union staff.
The Chronicle lost more than $50 million in 2008 and is on a pace to lose more than that this year, Hearst said. Frank J Vega, chairman and publisher of the Chronicle, said, "It's just a fact of life that we need to live within our means as a newspaper - and we have not for years." If the reductions can be accomplished, Vega said, "We are optimistic that we can emerge from this tough cycle with a healthy and vibrant Chronicle." The company did not specify the size of the staff reductions or the nature of the other cost-savings measures it has in mind. The company said it will immediately seek discussions with the Northern California Media Workers Guild, Local 39521, and the International Brotherhood of Teamsters, Local 853, which represent the majority of workers at the Chronicle. com sector as well as the loss of classified advertising to Craigslist and other online sites. The problems have been exacerbated by the current recession. In the news release, the privately-held, New York-based company said that the Chronicle has had "major losses" since 2001. "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 this economic downturn and continue to serve the people of the Bay Area with distinction, as it has since 1865," Bennack and Swartz said in their statement. "Survival is the outcome we all want to achieve," they added. "But without specific changes we are seeking across the entire Chronicle organization, we will have no choice but to quickly seek a buyer for the Chronicle, and, should a buyer not be found, to shut down the newspaper." The Hearst statement further said that cost reductions are part of a broader effort to restore the Chronicle to financial health. At the beginning of the year, the Chronicle raised its prices for home delivery and single-copy purchases. Hearst owns 15 other newspapers including the Houston Chronicle, San Antonio News-Express and the Albany Times-Union in New York. Vega said readers and advertisers will see no difference in the Chronicle during the discussions with the unions. "Even with the reduction in workforce, our goal will be to retain our essential and well-read content," Vega said. "We will continue to produce the very best newspaper for our readers and preserve one of San Francisco's oldest and most important institutions." The Chronicle, the Bay Area's largest and oldest newspaper, is read by more than 16 million people weekly. It also operates SFGate, among the nation's 10 largest news Web sites. SFGate depends on the Chronicle's print news staff for much its content. The San Francisco Bay Area is home to 21 daily newspapers covering an 11-county area. The Chronicle's news staff of about 275, even after a series of reductions in recent years, is the largest of any newspaper in the Bay Area. "While the reductions are an unfortunate sign of the times, the news staff has always been resilient in San Francisco,'' said Ward Bushee, editor and executive vice president. "We remain fully dedicated toward serving our readers with an outstanding newspaper. The area's other leading newspapers - the Bay Area Media News Group that includes the San Jose Mercury News, Contra Costa Times and Oakland Tribune - also have seen revenues decline sharply and cut staff. These problems are a reflection of those faced by newspapers across America as they experience fundamental changes in their business model brought on by rapid growth in readership on free internet sites, a decline in paid circulation, the erosion of advertising and rising costs. Advertising traditionally has offset the cost of producing and delivering a newspaper, which allowed publishers to charge readers substantially less than the actual cost of doing business. The loss of advertising has undermined that pricing model. At the beginning of the year, in an effort to evolve its business model and offset its substantial losses, the Chronicle raised its subscription and newsstand prices, taking a cue from European papers that charge far more than their American counterparts. "We know that people in this community care deeply about the Chronicle," Vega said. "In today's world, the Chronicle is still very inexpensive. This is a critical time and we deeply hope our readers will stick with us." The challenge the Chronicle faces, Vega said, is to bring its revenues from advertising and circulation into balance with its expenses so that the newspaper can at least break even financially. "We are asking our unions to work with us as partners in making these difficult cost-cutting decisions and reduction in force to ensure the newspaper survives," Vega said.
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Hearst Newspapers Be the first to share your thoughts on this story. Hearst seeks changes at Chronicle Articles The Hearst Corp. today announced an effort to reverse the deepening operating losses of its San Francisco Chronicle by seeking near-term cost savings that would include "significant" cuts to both union and non-union...
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