San Francisco Goes First

OK, who had the San Francisco Chronicle in the daily newspaper dead pool?

Probably everybody.

Hearst Co.'s announcement that it is considering closing the Chronicle, barring a sale (less than unlikely) or significant concessions from its unions (less than likely) really is no surprise. The Chronicle famously has been losing at least $1 million a week for years, and Hearst is conceding that the losses have increased recently as the newspaper economy has crashed. The biggest question may be how Hearst has managed to hang on for so long. As former Hearst CEO Victor Ganzi ominously warned more than two years ago: "We either had to fix it, sell it, or shut it down."

That sounds like the three options the company is looking at now. As a result, Hearst has now brought the Chronicle officially to the brink of extinction, which would make San Francisco the first major American city without a major daily newspaper (in respect of the sick, we'll hold off any jokes about San Francisco never really having had a major daily newspaper!). 

There do seem to be a couple of possible outs for Hearst, short of a shutdown, which Ken Doctor recaps in his excellent analysis. Basically, they boil down to a) cutting deals with the unions to reduce costs sufficiently to allow Hearst to successfully transition to its revolutionary and cost-saving print-outsourcing plan, due to kick off this summer; or b) selling the paper to William Dean Singleton's MediaNews Group, which owns most of the rest of the papers in the Bay Area. But the latter plan seems unlikely because MediaNews is cash-strapped and federal antitrust regulators may not look kindly on the deal. Besides, Hearst is essentially MediaNews' banker; it's hard to see the company funding somebody else's attempts to revive the Chronicle.

Maybe Hearst can stanch the bleeding, with help from the unions. Maybe it can find a way to get MediaNews to take the Chronicle off its hands. Maybe there's some rich (if foolish) buyer in the Bay Area who's always thought it would be fun to run a newspaper. Maybe Hearst can pull off some sort of triple backflip and close the Chronicle but revive it as an online-only paper, as it's allegedly considering in Seattle.

But most likely, the Chronicle will be shut down before the year is out, and San Francisco will be missing its major newspaper. It's time for smart people to begin thinking about the phoenix that arises from the Chronicle's ashes, more than likely a smart, online-only, community-oriented, economically operated new kind of journalism product. 

ChiTown Daily News founder Geoff Dougherty thinks it's possible to operate a respectable news site in a major city for $2 million a year. That may be a tad on the low side (especially given the Bay Area's cost of living), but he's not the only one running numbers that look something like that. That's a bargain-basement operation, compared to what the Chronicle costs to put out, but it's an interesting model. It's time for somebody, some city, to find out if that model really works. Let's begin inventing the future of local news, information and advertising. I'll be writing more about my vision for these post-newspaper products over the next few days. But in San Francisco, that future is about to begin.

Comments

[Suzanne Yada]

Hi Mark,
I've been reading your blog in my feed reader for a while and this post hits very close to home. I'm an intern at The Public Press, a nonprofit noncommercial news organization in San Francisco. We're hoping to completely reinvent the daily news model, borrowing from NPR or Consumer Reports models.

Right now we're piecing together a newsroom and already publishing at http://public-press.org. We're about to hit the ground running soon. Though we won't be able to immediately fill the shoes of the Chronicle should it fold, I don't have to tell you twice that the city needs dedicated and quality journalism in whatever form it can take it.

[Paul Grabowicz]

Mark -

Here at the UC Berkeley Graduate School of Journalism we launched a local online community site called Mission Local in the city's Mission District last October.

It's one of a half dozen such sites students will be running year round to teach them about digital media and explore the viability of hyper-local community news sites. More about the project is on our school's home page (journalism.berkeley.edu) in the Highlights section.