Hearst Puts Seattle Newspaper Up For Sale

Seattle Post-Intelligencer Will Shut Down Or Go On-Line Only If It Can't Find A Buyer

(CBS/AP)  Hearst Corp. put Seattle's oldest newspaper, the Seattle Post-Intelligencer, up for sale on Friday and said that if it can't find a buyer in the next 60 days the paper would likely close or continue to exist only online.

If it does become an Internet-only operation, the P-I, as the paper is known locally, would have a "greatly reduced staff," Hearst said in a statement. Hearst is a major media company that also owns TV stations, other newspapers and magazines including Cosmopolitan.

"In no case will Hearst continue to publish the P-I in printed form" once the 60 days are up, Hearst said. Steve Swartz, the head of Hearst's newspaper division, broke the news to employees in a meeting Friday.

Seattle is one of two major cities on the verge of losing its second daily newspaper as the industry tries to pull out of a tailspin brought on by falling circulation and advertising revenue. Denver's Rocky Mountain News recently put itself up for sale in the face of steep losses and could close if a buyer isn't found soon.

Hearst said it is not considering buying The Seattle Times, the city's other daily paper, which has handled non-news functions for the P-I since 1983 under a federally approved joint operating agreement. Hearst has owned the P-I since 1921, and the paper has had operating losses since 2000, including $14 million last year.

The mood in the P-I newsroom was grim.

"People are kind of depressed. There's some crying," said Candace Heckman, P-I breaking news editor who has worked at the paper since 2000.

Heckman told The Associated Press that Swartz was peppered with many questions by staffers but declined to say more.

"Our journalists continue to do a spectacular job of serving the people of Seattle, which has been our great privilege for the past 88 years," Swartz said in the written statement. "But our losses have reached an unacceptable level, so with great regret we are seeking a new owner for the P-I."

Chris Grygiel, an assistant city editor, said that while the newspaper's Web site is strong, the print edition has always been the flagship, and it's not clear how an Internet-only operation might work.

"Right now people are just trying to digest what happened," Grygiel told the AP. "No one knows what to make of it."

The news was first reported by Seattle's KING-TV on Thursday night, taking even top editors at the P-I by surprise. Rumors of the P-I's imminent demise have surfaced repeatedly over the years, but the paper's footing seemed a little more solid after Hearst defeated an effort by The Times to dissolve the joint operating agreement two years ago.

Joint operating agreements allow newspapers like The Times and P-I to share business and production operations, which cuts their costs, while keeping their newsrooms separate and independent. They're exemptions to federal antitrust law allowed by the Newspaper Preservation Act of 1970, designed to prop up failing papers. Of more than two dozen JOAs created since the law was passed, fewer than 10 remain.

Many industry analysts expected the P-I, backed by Hearst's deep pockets, to outlast The Times, which is controlled by the Blethen family. The Times, like newspapers around the country, has had severe financial troubles of its own and has cut 500 positions in the past year.

Also Friday, the Star Tribune of Minneapolis ended talks with a union representing employees after being unable to agree on a request for concessions, setting the stage for a possible bankruptcy filing by Minnesota's largest newspaper. Canada's Globe and Mail also said Friday it would cut 80 jobs, or 10 percent of its work force.

"We report on this stuff all the time, and everybody here knows this is a business and sometimes business decisions hurt," said David McCumber, the P-I's managing editor. "But even seeing colleagues and friends go through this at other papers doesn't prepare you for when it happens to a paper and to colleagues you love and admire and strive with every day."

In 1999, Seattle's joint operating agreement was modified to allow The Times to switch from afternoon to morning publication, directly competing with the P-I. Hearst began paying The Times $1 million a year for the right of first refusal should The Times be put up for sale.

The Times gave notice in 2003 that it was seeking to end the JOA, saying the agreement was no longer financially viable. Hearst sued to block The Times from doing so, and the matter was settled in April 2007, with Hearst paying The Times $25 million not to end the agreement before 2016.

As part of that settlement, The Times paid $49 million to settle Hearst's legal claims and to erase a provision of the JOA that called for Hearst to collect 32 percent of The Times' profits through 2083 should the P-I go out of business and leave The Times with a monopoly.

Times Publisher and CEO Frank Blethen said in a statement that the JOA structure is inefficient and had been a big part of the deep losses both papers have experienced.

"If the P-I does close and the JOA ends, it will enhance the chances that The Seattle Times can survive the recession," Blethen said.

Seattle Mayor Greg Nickels said he hoped a buyer can be found for the P-I. "And if that proves impossible, I look forward to seeing an electronic version of the state's oldest newspaper. Whatever the outcome, this is a big change for Seattle," he said.

The newspaper's signature 30-foot-diameter globe, spinning "It's in the P-I" in neon lights, is a popular Seattle landmark.

The P-I was founded as the Seattle Gazette in 1863 and has a weekday circulation of 117,000, according to the Audit Bureau of Circulations. The Times' circulation is about 199,000.

Seperately Friday, Boeing Co.. said it will cut 4,500 jobs -- about 3 percent of its workforce. Boeing is a major employer in the Seattle area, where much of the company's aircraft production takes place.

[runningralph]

More newspapers will shut down or go on-line. Newspapers will go the way of horse and buggy harness manufacturers. Younger people will have no use for newspapers.

[barbaram99]

We have a free press as Ben Franklin started and worked in the press as it in 7000s in this nation. I read the news on computer as no black print on my paws plus I can''t read the newspaper as it is tiny print. I hope the paper stays. I ''member the patty and sla as it was in the news in 74. I am 8 monthes younger than her. I am 54 as well.

[klewt]

You people are such idiots! You obviously have no understanding of the crucial role our free press, and in particular, the daily newspapers, have played in preserving a system of government that allows you to spout your ignorant opinions. Go ahead and cheer while you can.

[edamos54]

and take the Boston Globe and L.A. Times with them.

Maybe that rag they call the New York Times can buy it and both go down together.

[wardww-2009]

It is hard to have pity for any newspaper that closes. They have had years to adapt to the new wired world but have failed to do so.

[ms1-1-1]

Patricia Campbell Hearst (born February 20, 1954), now known as Patricia Hearst Shaw married the very police officer who was involved in the case cozy I''d say.

[ms1-1-1]

dakotaclark

..."control the news" that has been going on since Vietnam, lets talk, how many REAL United States of American citizens knew that the so called VIETNAMESE living in San Jose California were given 2% home loans, and 2% busniess loans while the REAL United States of Americans were paying 8% if not higher home loans, business loans et al., this "control the news" is NOT a new concept what so ever, to boot their are only a handful of news companies per se, i.e., CBS,ABCNBC,CNN,FOX et al, some REPUBLICAN controlled and slanted some DEMOCRAT controlled and slanted thats the bottom line...

[ms1-1-1]

- They should have sold it along time ago...

Patricia Campbell Hearst (born February 20, 1954), now known as Patricia Hearst Shaw, born in San Francisco, California. The middle of five daughters, she grew up in an "affluent and sheltered ... is an American newspaper heiress, socialite, and occasional actress. ...

heiress to the Hearst fortune. In 1974, she was kidnapped by a radical terrorist group called the Symbionese Liberation Army. ... Patricia Hearst staged her kidnapping it was a joke and oh it get stranger yet her so called quote end quote "husband" SHAW marries her because he got a sizeable pay check to do so... then she claims oh she was brainwashed such that she could get a full presidential pardon which under Carter she did... such a joke...

[ourtomorrows]

Awesome! Maybe we will have one less tree wasting, landfill filling pile of ***. Papers are the most inefficient information transferal method. What and disgrace that we still use them.

Posted by powmadeak47 at 10:55 PM

With all due respect, this is perhaps the dumbest comment I have come across as of late, and given this site, that is saying something.

[powmadeak47]

Awesome! Maybe we will have one less tree wasting, landfill filling pile of ***. Papers are the most inefficient information transferal method. What and disgrace that we still use them.

[debinok1]

This is not a good sign. To many news sources are caving, this is going to seriously limit the acurate, unbiased news available to the people. This is not a sign of good things to come.

[dakotaclark]

Hmmm...

What is the asking price? Will there be a discount for cash?

Before many people clap their hands in glee at the demise of the Seattle P-I, they need to consider the alternative of %u201Ccontrolled news.%u201D The worst kind of news is controlled news, whether it is world, national, state, local, opinion or not.

If the Seattle Times ends up being the only daily newspaper in Seattle, and they begin to %u201Ccontrol the news%u201D more than in the past, they too will fail %u2013 maybe sooner than one might expect. Give it 15 months at best.

It is possible that Seattle could become a no news city.

Surely, there must be some Microsoft billionaires and millionaires, who could use some legitimate tax deductions, eh?

[questionnews]

CNN had an analysis of why so many papers are either bankrupt, seriously in the red or being sold at yard sale prices.
Expansion of the internet news outlets. A view that the production of newspaper is not green. And that the news stories were bias toward political parties. I bet if newspapers were to go back to reporting the news instead of telling you how should react by slanting the stories, papers would make a come back, but in reality the way the operate now, they''re doomed.

[barbaram99]

Thank ye ..Maybe a buyer will come along . I don''t read Seattle papers as they are hard to read as the print is too small.