How the troubles at the San Francisco Chronicle echo in Denver
The San Francisco Chronicle, the largest daily newspaper in the Bay Area, is reportedly in such shabby fiscal shape that its owner, the Hearst Corp., says it may have to close the venerable pub within weeks if expenses can't be brought under control. In the event of such a shut-down, San Francisco's main daily would be the Examiner, a freebie owned by Denver gazillionaire Phil Anschutz.
This announcement has repercussions throughout the newspaper industry, which experienced yet another blow earlier this week when the parent company of the Philadelphia Inquirer and the Philadelphia Daily News filed for bankruptcy. But the Chronicle's troubles reverberate with special significance in these parts given the close ties between Hearst and MediaNews Group, the Dean Singleton-fronted enterprise whose portfolio includes the Denver Post.
Late last year, Moody's Investors Services lowered the credit rating of MediaNews, leading to speculation that the firm would follow in the footsteps of the giant Tribune Co., which had gone the bankruptcy route a short time earlier. The December blog "Moody's Downgrading of MediaNews Group: What's it mean for Denver Newspapering?" quotes a MediaNews statement disputing this theory; it appeared in an article from the journalism-industry mag Editor & Publisher that's no longer available on the E&P site. That response read in part, "By far, the largest debtholder of MediaNews is our partner" -- Hearst, which teams with MediaNews at more than 100 newspapers across the country.
Because MediaNews is a private company, it doesn't have to disclose nearly as much data as do public firms -- a point made in the January blog "Dean Singleton's Giant Balls." But it doesn't take total financial disclosure to understand that every blow Hearst takes will be felt in the corridors of MediaNews -- and that means the Post, too.
Right now, union negotiations with the Post and the Denver Newspaper Agency are ongoing, and knowledgeable sources suggest that a final deal will likely include big concessions -- possibly including salary cuts of more than 10 percent and a wide array of benefit pull-backs. However, such savings may not be enough to steady the paper if Hearst starts to go south. Everyone knows the difficulties faced by the Rocky Mountain News, which was put up for sale by its owner, E.W. Scripps, in December. But the Post, which recently laid off six supervisors, including managing editor Gary Clark, isn't exactly a picture of health -- and the struggles of the Chronicle hardly improve its prognosis.