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Hearst Threatens to End San Francisco Paper

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Photo: Glenn Batuyong

Hearst Corporation said Tuesday that it would close or sell The San Francisco Chronicle unless it could wring concessions from its unions, raising the prospect of San Francisco becoming the largest city in the country to lose its dominant newspaper.

Hearst said The Chronicle, which has daily circulation of 339,000, lost more than $50 million in 2008 and will lose more this year. It has had significant losses every year since 2001.

“Without the specific changes we are seeking across the entire Chronicle organization, we will have no choice but to quickly seek a buyer for The Chronicle or, should a buyer not be found, to shut the newspaper down,” said a statement by Frank A. Bennack Jr., Hearst’s vice chairman and chief executive, and Steven R. Swartz, president of its newspaper division. The company did not specify those changes, other than “a significant reduction in the number of its unionized and nonunion employees.”

The California Media Guild, which represents many Chronicle employees, had no immediate response to the ultimatum, which union officials said surprised them.

A Hearst executive called the statement “a warning” to the unions, and said that the company did not want to close the paper. He was granted anonymity because he was not authorized to speak for the company.

Hearst owned The San Francisco Examiner for more than a century, but the rival Chronicle became the city’s dominant paper. In 2000, Hearst bought The Chronicle for $660 million, and sold The Examiner. But it kept many Examiner workers, significantly increasing the size and cost of The Chronicle’s staff.

Since 2006, newspaper advertising revenue has plunged nationwide, and more so in California. The Chronicle has made deep cuts, signed a contract to outsource printing and explored selling its building. The Examiner, which has a much smaller staff, is now a free paper.