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P-I Gone, Who and What Next?

Today marks the end of the Seattle Post-Intelligencer as a newspaper. The web site seattlepi.com will live on as but a shell of its former self.

Despite coping with uncertainty for the past two months, the staff at the P-I put forth all it had for the final edition. The cover of the last paper, of course, features the P-I's iconic globe glowing in the dark.

The 146-year-run of the P-I, which began as the Seattle Gazette in 1863 and bought by William Randolph Hearst in 1921, came to an end after the parent Hearst Corporation decided it was tired of losing money at a paper where circulation was shrinking at an alarming rate in recent years. By making the paper an online-only entity, Hearst is experimenting with a future concept that may be the destiny of newspapers. The fate of P-I's web site will be closely monitored not only by other Hearst papers such as the San Francisco Chronicle and Houston Chronicle, but other newspaper operators from across the country as well.

That the P-I and the Rocky Mountain News folded in the first quarter this year is but a sign of the times. More papers will surely follow. The financial crisis has been cited as the primary reason for the demise of newspapers, but it merely accelerated it. The business model was broken, so it was merely nudged toward the cliff a little sooner than expected.

The more forward-thinking types have already moved on, that includes Clay Shirky, a well-known and respected industry analyst:

There is one possible answer to the question "If the old model is broken, what will work in its place?" The answer is: Nothing will work, but everything might. Now is the time for experiments, lots and lots of experiments, each of which will seem as minor at launch as craigslist did, as Wikipedia did. ...

Any experiment ... designed to provide new models for journalism is going to be an improvement over hiding from the real, especially in a year when, for many papers, the unthinkable future is already in the past.

The death of the P-I is but one of the many funerals for newspapers in 2009, and beyond. Only a month ago, we produced a list of newspapers most likely to fold, and as of today Nos. 1-2 are already gone and No. 3 is to be reduced to an "edition" of another paper soon.

As with the Rocky, the P-I went out with a bang, in an interactive, multi-media splash - photo gallery, and video:

Seattle P-I, R.I.P.

After allowing the employees of the Seattle Post-Intelligencer to twist in the wind for the better part of a month, the parent Hearst Corporation finally put the paper out of its misery. Tuesday's edition will be the P-I's last in print, ending a 146-year run.

Hearst will maintain a skeletal web site run by some of the P-I staffers, though the vast majority of the 167 employees will lose their jobs. The P-I becomes the second major U.S. metro daily to shutter in as many months, following the Rocky Mountain News' demise in February.

The P-I's former JOA partner Seattle Times may stand to benefit, but the impact may be limited. The Times, owned by the Blethen family, is having its own financial crisis. Just last month, the paper lobbied the Washington state legislature to grant tax relief. From Seattle Times publisher Frank Blethen in a statement:

Though The Seattle Times and the Seattle P-I have been fiercely competitive, we find no joy in the loss of any journalistic voice. Today's announcement is an acknowledgement that in the current economy it is a struggle for even a single newspaper to be profitable and impossible for multiple papers in a single market.

With the P-I closing, Hearst is moving ahead in its effort to keep the flagship San Francisco Chronicle operating. By a vote of 333-33, the paper's guild ratified a new agreement with management on Saturday, allowing a number of concessions. Teamsters, representing the paper's pressmen and truck drivers, is now the last union that must ratify the new proposal.

Carl Hall, the guild's lead negotiator, said of the agreement: "This is the start of the real battle. We have to find a solution, a real solution, to save what we really care about here - quality journalism and qualify jobs."

The Last Days of P-I

Today won't be the last day of the Seattle Post-Intelligencer as a daily newspaper, as it had been widely speculated. The parent Hearst Corporation said in an e-mail to the P-I staff that: "We are still evaluating our options. Timing of the decision is uncertain."

But make no mistake, the end is near. By all indication, Hearst intends to turn the P-I into an online-only operation with an emphasis on aggregation and blogs. When that happens, the P-I would become the second major U.S. metro daily newspaper to fold following the demise of the Rocky Mountain News on Feb. 27.

As if to perform the last rites, the P-I employees were allowed to pose in front of the paper's iconic rooftop globe yesterday for posterity.

Ken Lambert, Seattle Times

In the past two weeks, Hearst has courted selected writers and editors for the proposed online-only P-I. Assuming those ranks were filled, the site will continue without a hitch while the print edition shuts down. In any event, the morale in the P-I newsroom could not be lower, with the minds of the employees already elsewhere:

There's also an emotional and group-think element that's making people agree that this week will bring the last-ever print P-I--or, at least, should. First of all, what kind of employer tells a group of 170 competitive journalists that they're about to lose their jobs, then picks about 20 of them to stay employed in an online-only project ..., then throws the chosen back into the general population, and then lets that stew of jealousy and resentment simmer for a week or so? Not a good idea. As one reporter put it last week, the current vibe in the newsroom is: "Put us out of our misery already."

While Hearst cleans out the P-I, it continues to work on saving its flagship San Francisco Chronicle. Management has tentatively agreed to a deal with the guild, with concessions granted to keep the paper operating. A bigger obstacle, however, remains the Teamsters, who represents the non-editorial staffs including truck drivers. Teamsters may yet to decide to scuttle the negotiations and dare Hearst to shut down the paper.

Members of the guild are expected to ratify the agreement, as outlined in the memo below obtained by Media Watch:

MONDAY March 9, 2009

Tentative Agreement in Chronicle-Guild Talks

Negotiators for the Guild and the San Francisco Chronicle reached a tentative agreement Monday night on proposed changes to the collective bargaining agreement in connection with cost cuts planned by the company.

The agreement will require approval by Chronicle Unit Guild members. A ratification meeting will be scheduled as early as Thursday of this week. Time and place will be announced on Tuesday as soon as a large enough facility can be secured.

In view of the latest terms agreed today, the Guild Negotiating Committee recommends membership approval.

The terms reached late Monday include expanded management ability to lay off employees without regard to seniority. All employees who are discharged in a layoff or who accept voluntary buyouts are guaranteed two weeks' pay per year of service up to a maximum of one year, plus company-paid health care for the severance term, even in the event of a shutdown - which today's agreement is designed to avoid.

Guild membership will remain a condition of continued employment for all employees. However, new hires in certain advertising sales positions will be given the option of membership, even though they will retain Guild protection under the contract.

On-callers will be limited to no more than 10 percent in any classification or department.

Pension changes are not part of this agreement, but are being discussed by pension authorities and must be implemented under terms of the Pension Protection Act, due to the recent declines in investment markets. Because those changes may affect the decisions of many members concerning buyouts, we are attempting to reach some key understandings now as to the nature of the changes and when they will take effect.

A lunch-hour meeting on Wednesday March 11, with our pension plan's lawyer will be held at the Guild Office, 433 Natoma, Third Floor Conference Room.

A bulletin summarizing all the proposed contract changes will be issued Tuesday. A set of the complete proposed amendments will be available on the Guild's Web site (mediaworkers.org) as soon as possible.

Management is seeking to change the union contract as part of an attempt to cut costs and keep the paper operating under the ownership of the Hearst Corp.

The company said Feb. 24 it would sell or close the paper unless the Guild agreed to changes in the labor agreement in effect through June 2010.

Just up the road in Sacramento, the union accepted a severe paycut so the troubled parent company McClatchy may continue to keep publishing the Bee. Nevertheless, McClatchy, which also owns the Miami Herald, Fort Worth Star-Telegram and Kansas City Star, is expected to slash 15% of its workforce, or about 1,600 jobs.

A Glimmer of Hope for P-I?

It may be only days before the Seattle Post-Intelligencer goes the way of the Rocky Mountain News. Its parent Hearst Corporation has set a March 10 deadline to find a buyer or it may shut down the paper.

While no serious buyer has emerged, word is that Hearst may be planning to extend the P-I's existence by making it an online-only entity. A number of P-I's staffers have been offered to stay on to work for the web site.

One reporter who turned down the offer said it came with some strings attached - it would increase his health insurance cost, cut his salary by an unspecified amount, match his 401(k) contributions, require him to forgo his P-I severance pay, reduce his vacation accrual to zero and require him to give up overtime. But Hector Castro said the reason he rejected the deal is because he finds working online "too tech-oriented."

Meanwhile, some of the newly unemployed Rocky Mountain News journalists have already found a way back on the web. Tracy Ringolsby, one of the most respected baseball writers who also co-founded Baseball America, has launched a baseball site along with fellow ex-Rocky baseball writer Jack Etkin and editor Steve Foster. It didn't take Colorado Rockies fans long to discover InsidetheRockies.com, which got around 2,100 hits the first day and climbing ever since.

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.

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.

Seattle P-I on the Chopping Block

The next major metro U.S. daily newspaper to disappear may be the Seattle Post-Intelligencer.


The Hearst Corporation has put the Seattle P-I on the market, giving itself 60 days to find a buyer. Short of that, the company plans to, at the minimum, shut down the print edition. Given today's economic climate, there's a possibility that the Seattle P-I may no longer exist in any form by the end of March.

The P-I's staff is stunned by the news as it was delivered by Hearst president Steve Swartz:

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. But our losses have reached an unacceptable level, so with great regret we are seeking a new owner for the P-I.

These are historically difficult times for our country and our industry, and our problems will likely worsen over the months ahead. Many companies in our industry find themselves saddled with far too much debt, and a painful restructuring process has just begun, with all the negative publicity that comes with that.

Hearst, which is also mulling options to mitigate its losses at its flagship San Francisco Chronicle, has lost money at the P-I every year since 2000, including $14 million in 2008. According to Swartz, the company also has no interest in buying the rival Seattle Times.

Founded as the Seattle Gazette in 1863, the Post-Intelligencer has been owned by Hearst since 1921. It entered into a joint operating agreement (JOA) with the Blethens-family owned Times in 1983. But since the Times abandoned the AM/PM arrangement and went head-to-head with the P-I in the morning in 2000, the more liberal P-I has seen a precipitous drop in readership. Currently, the Times' circulation is 198,000 while the P-I's is at 117,000.

Click here for Hearst's memo to the P-I employees.