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Holy smokes.
This just in: the SF Chronicle is (practically) up for sale. Word is that "if they don't sell it, they'll shut it down." No deadline communicated yet.
The following memo was sent to SF Chronicle employees today.
Memo from Frank Vega, Chairman & Publisher
February 24, 2009
Dear Fellow Employees:The rapidly declining economy, coupled with severely declining advertising revenues, is forcing nearly every newspaper company to re-think how it conducts business while continuing to serve its respective communities.
Despite all of our best efforts as an organization, The Chronicle continues to show staggering losses each week. Recent staff and expense reductions have not stemmed these losses, which are only worsening in the present economy. In response to our financial picture and the bleak economic forecast for the foreseeable future, our management team has begun a series of cost-saving initiatives designed to alleviate those losses.
First and foremost of these cost savings will be a significant reduction in force across all areas of our operation affecting both represented and non-represented employees. We will shortly begin discussions with union leadership on proposals. Our current situation dictates that we accomplish these cost savings quickly. Business as usual is no longer an option.
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. We know these are painful times for everyone and we face difficult choices. We share in the sincere hope that we will reach agreement with all parties involved on the concessions needed to continue to operate and provide the Bay Area with a quality newspaper.
I will update you throughout this process. Thank you for your support and good work, particularly in economic times that are difficult for all of us.
Here's one way of looking at this somewhat shocking news: This is Hearst trying to strongarm the union into complying with whatever demands they try to shove down their throats. They are basically saying "concede to layoffs, loss of vacation and severance, or we will shut it down."
The question is, how will the union members respond to these bullying tactics? Will individuals hope that their jobs won't be the ones cut, or will they call Hearst's bluff?
Another way of looking at it: They're broke as all hell, and and they will shut it down. Which seems to be the most likely scenario.
Hearst corporation, if you recall, also put up for sale SF Chron's sister paper Seattle P-I, in January.
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Can you imagine the Examiner being the only paper in SF?
*shudder*
The Examiner isn't much a paper. I'm not sure what it is, but it certainly doesn't seem to be a paper.
[sigh]
When's the last time the Examiner broke a story or had local impact? The BS "joint operating agreement" was part of the decline of this town's journalism. Not sure what a solution would be. It's sad.
When was the last time you read The Ex?
The Ex routinely beats the Chronny on local news.
i'll give 'em 20 bucks for it
That sound you hear is the sound of one shitty daily tabloid clapping.
/sorry Tiff
It means they're closing it. They know there will be no buyers.
Yeah, who would buy it? The name's got some recognition but what else would they really be buying? If someone's got that kind of cash, wouldn't they invest in something that hasn't been taking a beating for 10 years?
The LA times is in the red, but an SF/NorCal section in that rag with an overall shift to making it a more Californian paper might be an idea. What would be totally entertaining to see would be if Murdoch bought the Chron and turned it into a right wing tabloid and went all out against our progressive lameness. I hate News Inc, Murdoch, Fox et al, but his better writers would have an absolute field day with the politics here.
He didn't already? I've never been able to understand how the Chronicle was able to be so conservative in this town.
They are also shutting down the Seattle PI..the thought of the Examiner being the only "paper" in town is frightening. However, these media geniuses keep gutting the only thing they have to offer - their years of expertise and charge MORE for a paper that offers mostly wire service copy and less and less actual news one might need to be informed.
Oh well.
"Business as usual is no longer an option."
Is this in the CEO's Microsoft Word AutoText?
This sounds like a job for... the free market!
...oh.
ill give em a $1000 for Herb Caen's old desk, his Loyal Royal and that bust in the window off 5th St.
I blame Brock
I blame Jameth.
You lost yourself to Jameth :(
I'll just blame myself. At least my opinions are flat out nutty ideas with satire.
An alternative is to forget about dead tree. I don't know the last time I bought the Chronicle on paper, but I read it all the time online. If they lose money printing it, why not go online only?
Exactly. Buy the thing, fire CW Nevius, then go online-only. In that order.
I think more to the point is that they lose money gathering the news, not in its presentation.
Newspapers also lose money because even though their content gathering has become more valuable (sustaining hundreds if not thousands of blogs) people don't need to actually get the content from them (they can go to the blog and never actually chase the link).
SF Chon does little original reporting. And what little they do doesn't cost much. Papers don't lose money gathering the news. Ward even said in a recent article it takes 10 bucks to print and distribute a sunday paper.
While it's easy and commonplace to say, the Chron just isn't losing money because of blogs. Papers are afraid to give up the remaining print ad revenue and go online only, but online revenues aren't sufficient to support the bloated org structure of most newspapers. They can't go backwards and are afraid to move forward.
(updated?)
I was going to point out that nowhere was I claiming blogs to be the source of their problems, just that blogs are very dependent on them.
Management and labor, declining ad revenues and whatever union contracts they have are huge. Add to that whatever subscription fees they pay for wire services....
But newsprint is cheap.
The value of having the reach of physical newspaper (as measured by ad rates) is clearly something pay for. The question is how much?
"Ward even said in a recent article it takes 10 bucks to print and distribute a sunday paper."
We dropped the daily Cron many years ago. Until last year, I was paying $19.95 per 6 months for Fri-Sat-Sun delivery. Last fall, they raised the price substantially to something like $52 per 6 months for Sat-Sun only. The 7-day a week is in the well-over-a-hundred per 6 months or something like that.
As I understand it, they have a two tier delivery system, with the daily delivery system costing a lot more than the weekend one. Maybe they are looking for a excuse to shed their expensive, daily delivery system.
How does democracy work without a press?
hmm, kinda a bit archaic. and i would not call sf chron the press.
The "press" remains, RinconHillSF, the medium of transmission's just changed. As with all other progress, the folks who can't adapt die off.
Sorry if it sounds obvious, but bemoaning the loss of the press because a long-failing newspaper announces their continued failure is like bitching about the lack of wet nurses while standing in the formula aisle.
I would like to recommend this comment.
Well, if the "news" is just crap some PR flack is paid to write up and print, what value is that to folks trying to keep an eye on the folks who've been given the public trust to run municipalities?
OK, something is fishy here.
This is what they announced just a few weeks ago:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/02/03/MNP415LLR3.DTL
" The redesign not only makes The Chronicle brighter and more modern, it also prepares us for the rollout in June of state-of-the-art presses that will dramatically improve the paper's reproduction and color capability.
During the week, a key change readers will notice is that The Chronicle will be printed in four sections - a cost-saving move that will enable us to produce the paper at a single printing facility."
There have GOT to be some union rules that are preventing that from happening in full, which management is now threatening sale or closure to undo. Ya think?
Seriously, that's a nifty theory, aj, but nope -- the pressmen are in a different union, one that, for better or worse, accepted the fact that the new press is a nonunion one. That deal is done.
So they burned a lot of cash on the redesign and new presses only to threaten a sale or shutdown? It still sounds fishy to me.
It's fun to imagine this is all part of some clever plot, I agree, but in real life incompetence is always a better explanation than deep, dark conspiracy.
Every so often you get a clear indication of things falling apart, like by AD 500 you couldn't for the life of you find anyone in Rome with the skills to carve a corinthian capital, you had to go with the doric.
It's a sign of the times. People are reading their news online.
Akit,
Though Brock denies it and you do not care, the source for the majority on-line news is print based journalism qand we have not created a model yet to fund investigative reporting entirely from web based distribution.
Eve,
Edited for Accuracy - "Sorry if it sounds obvious, but bemoaning the loss of the press because a long-failing newspaper announces their continued failure is like bitching about the lack of wet nurses while standing in the melamine-laced chinese formula aisle".
I haven't denied it. What I'm denying is that it costs as much as you'd want me to believe.
Also, the models are out there already.
Brock,
I guess the best model right now is Huffington report, but even their items barely exceed the word limits for text messages.
Bloomberg at $1500 a month doesn't cut it for me.
Hopefully we can transition to a pay system for on-line news, but I am afraid the business model for on-line delivery will only allow a tiny fraction of the reporting budget that built historic newspapers - and, we will not even be able to see the difference.
I'd say that Talking Points Memo is a pretty good model. Don't know how much money they're making, but Josh Marshall has been doing it for several years now. Seems that focusing on one thing (gov't corruption) and doing it really, really well is their formula.
redseca2: Huh??? How did you come to the assumption that I "do not care?"
redseca2, I think I see the problem. As long as you (I say that based on your use of "we") mistakenly view the internet as "melamine-laced chinese formula," you're not going to find that "model...to fund investigative reporting." I'll thank you not to "edit" me "for accuracy" by twisting my words to reflect your fears of obsolescence.
that not 100% true... Like on the Judah Ill still read the Exax/SFW/ Guardian.........I think it will be awhile before print dies. Business like the Chron are just used to big $.
Where is the government bailout? How can the democrats stand by while another American industry goes down the toilet!
Is it because... *Gasp* Industries evolve? New technology replaces the old? Failed companies die and new companies replace them?
If only the Auto industry could die as calmly as the print news industry.
They still do buy ink by the barrel. And they know bailouts are being handed out now, so if you want to cry wolf, now is the time to do so.
Good riddance. Why anyone is dumb enough to pay 25 cents a day to read AP stories is beyond me.
All the news you need will be found online, in this youtube video of a kitten riding a roomba...
What is happening with the SF Chron is right in line with the expereince every other PRINT newspaper is dealing with. Recently as today there was a paper in Philadelphia that plans on closing. Papers as we use them today rely too heavily on an outdated business model and LOOSE money when they distribute print copies. Look at the NY Times. IT has been highly documented that they loose money on all of their print distribution. The key here in my opinion, is to move to a more modern online distribution model, sending copies electronically, and focusing on advertising revenue and maybe a modest subscription. A focus on promoting the paper through social media would also benefit them as well. Even local papers such as the OC register are using sites such as twitter to promote their content and have their news move to a more "real time" reporting basis. I only hope that an insitution such as the SF Chron. can move its business structure forward in a means that aligns itself with the current economic environment.
This is fishy; after all, the memo's coming from Darth Vega, the guy who broke the Guild in Detroit. But I don't think he's kidding at all -- Frank Vega does indeed crush his enemies and lives off the lamentation of the rank and file.
Although I'm sure the Hearsts are very proud of having outlasted the deYoungs in the newspaper wars, it may not have accomplished anything lasting, more's the pity.
I don't know if it would work for a general news site, but at Streetsblog San Francisco we're a nonprofit that gets donations from a couple larger donors and grants from foundations. At this point, we don't advertise, though as we scale up, we may consider that. I don't know how many other people here think a non-profit model is feasible? And how much that can scale up...
Streetsblog is majority funded by one rich dude. (Mark Gorton, founder of LimeWire: http://theopenplanningproject.org/about/founders-message/)
What happens when you disagree with him?
More specifically:
http://theopenplanningproject.org/about/faq/
"The majority of our funding comes through the generous support of our founder, Mark Gorton."
Which is fine and all, but you can't call that sustainable.
But it needs $$$. Twittering your content and having it all online etc might make people happy, but it doesn't pay for a newsroom.
Interesting you bring up the NYT, as they seem to be pursuing a strategy of holding out until people realise that what they produce is worth paying for, be it online or in print, and still being around when the dust settles and people figure out that they still want the content that costs $$$ to produce. Which is the total opposite of the chron which shovels shit into the paper so they have an excuse to print the ads.
Apparently the times was making money when it had its pay way, and the WSJ makes a decent amount for its pay for content site. I personally think the NYT had it backwards. Give away your opinions for free, but make people pay for the news.
There's also been a lot of talk lately about foundations and nonprofit models being tried... im sure we haven't seen the last of the daily dead tree paper.
A link to a post from 2007.
http://www.chrisdaly.org/?p=32
Get your wagers in, folks.
Spot.Us
I should explain a bit now that I have some time ... Spot.Us is a community funded journalism project that may be worth a look. Writers submit stories that they'd like to do a story on, and folks either fund it or opt to let the idea die on the table, so-to-speak. Interesting concept ...
Blogs didn't kill print newspapers, Craigslist did. Classified ads are worth major bucks.
Forget the argument over whether to print a physical paper - it's a distraction. Producing a print publication is costly, to be sure, but if every newspaper in America switched to an online-only model, every newspaper in America would cease to exist. Why? Because print advertising still accounts for a huge percentage of newspapers' revenue. Seems crazy, especially to us here in the Bay Area, but that's the way it is.
Blogs aren't the problem either. Newspapers have no reason to fear blogs. Comparing most blogs to most newspapers is like comparing a bag of Cheetos to a multi-course meal at a four star restaurant - blogs will satisfy you in the short term, hell, they're even enjoyable, but high-quality newspaper reporting is something to savor and something that informs your worldview. When blogs hire teams of trained reporters and editors willing to spend nine or more hours every day covering City Hall/criminal justice/the environment/transportation/etc., then it's time to reconsider.
The problem is how to monetize online content, and the solution hasn't been found. There are some paid models that seem to be working - the Wall Street Journal and Financial Times, to name two - but they're perceived as aberrations, indulgences of corporate expense accounts that haven't proved themselves in the long term.
Some say that papers like the Times should just put up a paid subscription wall, and people will pay, while others say that readers would flee in droves to the inevitable bevy of competitors that continue to offer their information for free. The latter might be true, but in my view, newspapers are just killing themselves slowly by continuing to offer their product for free.
I think the likely outcome is a mix, but almost all newspapers will shrink. Some will shrink to a level where they can sustain themselves with online advertising while still offering their content for free, but they'll be the size of Techdirt, Talking Points Memo, Ars Technica, etc. Some might institute a paid subscription model (or a micropayment, iTunes model) and remain slightly larger. My guess is that eventually the best long-form investigative reporting will be produced by non-profit papers, or those funded by an endowment.
Any way you slice it, I think that at some point people will realize they get what they pay for.
If every newspaper in America ceases to exist, there won't be print advertising.
Is the presumption that those ad dollars, then, simply dry up? Or do they migrate online, to where readers have presumably gone?
Is the presumption that those ad dollars, then, simply dry up?
In the current economy, yes. We're going to see a bunch of papers, magazines, and yes, blogs, close down in the next couple of years.
Not a bad point: If companies aren't advertising in print anymore, where will they advertise?
The apocalyptic scenario of every newspaper in America ceasing to exist is a far-fetched hypothetical, one I hope never comes to be. Nevertheless, I assume that hundreds of millions of print ad dollars have already migrated online. That being said, the online advertising model is hugely different from the print advertising model, and newspapers are not at the top of the online food chain.
Bill and Sue's Bric-a-brac Shop may have placed regular ads in the local paper in the past, but now Bill and Sue realize they can earn more money if they ship their product and sell it online, so they pay Google, Yahoo or an ad network to place their text ads on Web sites or next to search results. In a highly competitive advertising environment, most newspapers can't offer the kind of consumer targeting that Google can, so they simply can't charge advertisers enough money to pay for their own costs (reporters, editors, buildings, technology, etc.)
I can't recall exact numbers right now, but I think that even papers like the NY Times, with tens of millions of unique visitors a month, would need to increase their readership exponentially if they wanted to earn enough online ad revenue to sustain themselves.
Good points yourself. Maybe, then, my question becomes this: would it be possible to charge the advertisers more? If, like you say, web advertising can be shown to be more effective than print advertising at this scale, how come advertising space on the web can't be sold at a premium that sustains the product?
Is it possible the market for advertising space is possibly too large at this point? Would reducing that space (by killing off print divisions) reduce the overall supply and drive up the overall demand?
I don't actually have a good sense of how all this works. How did newspapers survive the advent of radio and television? How long did it take radio and television to suss out operable revenue models?
Google is making money hand over fist on advertising. They don't have any distractions from the core business of "organizing information" and selling ads alongside it. The newspapers (or, to be more clear, news organizations) that survive will be like this.
Really, why do we need a paper in every mid sized metro area? Is San Francisco such a delicate and beautiful snowflake that it can't be served by a regional or national news org?
Check the stats.
http://reportr.net/2008/12/23/internet-tops-print-as-us-source-for-news/
this one is an easy fix. They should do like Randy Shaw and Tenderloin Housing Clinic does with beyondchron.org (the suppose answer to the Chronicle itself)
All the have to do is set up a non profit, open a couple of crack hotels for the homeless, and use that money to run an online newspaper at the taxpayers expense
why bother with advertisements and subscription when you can have the government pay for it?
I know there's probably some butt-hurt between you and a few of the Chron's writers, but it's rather unbecoming to say the least for you as an elected official in this town to anticipate with barely-concealed schaedenfraude the demise of a paper that employs hundreds of San Franciscans.
It's the Classifieds, Stupid.