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Philly Moves Toward One-Paper Town

Scarcely a week after filing for bankruptcy, the Philadelphia newspapers are finding temporary measures to stop the bleeding. On Monday, the newspapers announced that the smaller tabloid Daily News will become "an edition" of the broadsheet Inquirer, effective March 30.

Philadelphia Media Holdings LLC, the parent company of both papers, insists that the move is made to boost the circulation numbers of a soon-to-be single entity and to help increase advertising revenue. Currently, the Inquirer has a circulation of 300,000 and the Daily News 97,000. The Sunday Inquirer has a circulation of 556,000, making it the eighth-largest Sunday paper in the U.S.

While the parent company and the editors of both papers maintain that the papers will keep separate staffs and "compete" with each other for stories, it's all but certain that the Daily News will become merely a section of the Inquirer and eventually disappear altogether. There is no economic sense in publishing two papers, with different formats even, when the smaller of the two isn't worth the trouble. The Daily News' circulation is less than that of the papers in Allentown, Pa., or Rockland County, N.Y.

Meanwhile, papers from coast to coast are slashing and cutting. The family-owned Columbus Dispatch announced that it's trimming 45 newsroom jobs. And the Sacramento Bee, owned by financially-distressed McClatchy, is trying to get the union to accept a large-scale pay cut, with those making $50,000 or more losing 6% of their salaries, a significant concession given the increased taxation facing all Californians.

In a memo circulated to members, the guild pleaded for a yes vote in order to save jobs:

The committee tried its hardest to win some concessions in exchange for accepting a difficult package of wage cuts and layoffs. But over and over, the company said it was an all-or-nothing deal necessary to achieve the company's financial goals in the eye of a severe economic downturn.

Opinions varied within the bargaining committee regarding a choice that was unpleasant in every sense of the word. We have all heard of the layoffs elsewhere, and even steeper wage cuts being asked of other newspapers, including 11.7 percent at the Denver Post and 15 percent at the Seattle Times. Every day brings new reports of newspaper bankruptcies and closings, as was the case at The Rocky Mountain News on Friday.

There's no way to sugar coat it. This was crisis bargaining, nothing more. Now members must consider the options and vote. We have been told that a no vote will trigger high number of layoffs among us.

Read the reaction to this memo, though, and you'd be amazed at how some people just don't get it.

The Dominos Are Falling Fast

In "End Times" The Atlantic's Michael Hirschorn fancifully speculated the demise of the New York Times. While he made a few salient arguments, the fact remains that it's preposterous to think the Times would fold in 2009.

Not so, however, for a number of U.S. newspapers. At least a dozen major metro dailies are certain to close down this coming year, the question is only who'll be first.

The Seattle Post-Intelligencer is on life-support. With no buyer in sight, the paper could close as soon as March. Ditto for the Rocky Mountain News in Denver. You can add the Tucson Citizen to the list now as its parent company Gannett just announced that if no buyer is found, the paper will close on March 21.

Also Friday, the Minneapolis Star Tribune filed for bankruptcy, becoming the second newspaper publisher in as many months to do so, following the filing by the Tribune Co., owner of the Chicago Tribune and Los Angeles Times. But even with the Chapter 11 filing, the Star-Tribune might outlast its Twin Cities rival, the St. Paul Pioneer Press, who is apparently in worse financial straits.

Writing in his blog 24/7 Wall St., Douglas McIntyre listed five newspapers most likely to fold: The Miami Herald, Star-Tribune, San Francisco Chronicle, New York Daily News and New York Observer. Yes, the newspaper landscape is changing so fast that the P-I and Rocky Mountain News didn't even make the list.

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Next to go?

The Herald is at the top of McIntyre's list because of the combination of the failing health of its parent company McClatchy and the gloomy real estate market in South Florida:

The Miami Herald is already for sale. It is owned by McClatchy, a company which simply may not make it. McClatchy had operating income of $40 million last quarter, but its debt service was $34 million. In addition, McClatchy revenue dropped 16% for the quarter. Based on the figures the company has posted over the last several months, the top line is dropping more rapidly, especially at its Florida and California properties. Classified sales are down over 30% in these regions. For the six months ending last September, daily circulation at the Miami paper was down 11.8% to 240.000. A large daily newspaper operation that covers a huge metro area is simply too expensive to run with this enormous audience loss. The Herald won't be sold. There is too much risk here for a buyer. The most likely fate of the paper is that it will be merged with the Ft. Lauderdale paper or some other media in south Florida.

McClatchy, the nation's third-largest newspaper chain, made a questionable decision to purchase Knight Ridder in June 2006, one that could prove fatal. Its stock, valued at around $40 a share at the time of the acquisition, was at 81 cents when the markets closed on Friday. With 32 dailies, including the Fort Worth Star-Telegram, Kansas City Star and Sacramento Bee in its fold, a McClatchy collapse may bring a catastrophic meltdown to an industry already on thin ice.