Chron 2.0

In the Bay Area, the disintegration of the Knight Ridder newspaper company this year led to unprecedented consolidation of ownership in the hands of Dean Singleton, who controls more than two dozen Northern California newspapers, including the San Jose Mercury News, the Oakland Tribune, and the Contra Costa Times. Singleton is now in the process of laying off redundant workers, merging the content of the papers, and demanding pay cuts from the union.

In perhaps the most unsentimental move of all, earlier this month his Denver-based Media News Group announced that the Oakland Tribune would leave the landmark downtown Tribune Tower for the Airport Corporate Centre near the Oakland Coliseum.

How did this massive decline happen? Advertising revenue has been headed south for years, and every major newspaper in the country, except for New York's tabloids, the Post and the Daily News, have hemorrhaged circulation. Add in the vicissitudes of Wall Street speculators and professional consolidators such as Singleton, and you have a recipe for industry chaos.

The extraordinary thing about the Chronicle is that even though the paper is losing money, the belt-tightening seems less harsh there than at other papers. In negotiations with the union last year, Hearst said it was losing $62 million a year on the paper. That gave management the leverage to demand buyouts of 120 staffers, most of them from the newsroom. Editors of various departments disagree about which one suffered most from the cuts.

Last week, in an ongoing antitrust court case that accuses Hearst and MediaNews of conspiring to combine the business operations of nearly all Bay Area newspapers, Hearst lawyer Daniel Wall said the Internet and new media were bigger competitive threats than other newspapers. He said the Chronicle was still losing $1 million a week.

By last March, the Chronicle's weekday circulation had fallen 24 percent, to 398,000, from the same time in 2001. Sunday circulation had fallen 16 percent, to 452,000. Between March and September, weekday circulation again fell, by more than 5 percent, to 374,000, which national media reports indicated was among the biggest losses in the nation.

But, pointed out Chris Blaser, vice president of circulation, all other large Bay Area daily papers fell faster than the Chronicle. The Oakland Tribune's weekday circulation fell 21 percent just in the last year.

Chronicle Publisher Frank Vega said he would consider it a triumph if print circulation were to stay even through next fall. "I think I'd be foolish to tell you that there would be a surge in print customers, among people who haven't done it in years."

That's one reason the Chronicle is the first major metro daily to decide to get out of the printing business altogether. The paper owns three printing plants, none with presses younger than 40 years old. Within three years, the company plans to shutter them. Two weeks ago Hearst signed a 15-year contract worth more than $1 billion with Transcontinental Inc., which plans to build state-of-the-art presses in the Bay Area. The outsourced printing will allow better reproduction of news graphics and more full-color advertising.

It's all of a piece with Hearst's gambit to shift from publishing to information. If the paper bought its own new presses, it would have to run them for decades, and possibly during the day for other clients.

"We're not doing well financially, so we didn't want to invest a lot of capital," Vega said. "We're not in the commercial printing business, nor do I want to get into that business. I don't want to have to worry about that stuff."

Some awful nautical metaphors have been circling, like sharks, around newspapers for years now. In 1999, the weekly Philadelphia City Paper ran a cover story about the Philadelphia Inquirer titled "Sinking Ship," which laid out a case for how and why the paper was adrift under its captain, Editor Robert Rosenthal. At the time, the story pointed out, the Inquirer was losing circulation faster than any major paper in the country. What it neglected to say was that Philadelphia also happened to be losing population faster than most major cities.

Two years later, Rosenthal quit, citing irreconcilable differences with his bosses at Knight Ridder over staffing cuts. A year after that, Bronstein threw him a life preserver and hired him on as managing editor of the Chronicle.

Like the Inquirer, the Chronicle, which just before the merger had made a great push to expand suburban coverage and bulk up zoned local editions, now has to concentrate on being more of a regional paper. The elimination of the enormously expensive local zones in outlying counties compressed all that news into the Bay Area section.

Bronstein said that in retrospect the local news strategy was "wishful thinking."

Both men soon realized that the biggest and most cost-effective opportunity for growth was not suburbs, but cyberspace. Sure, Rosenthal said, news will always be in the paper. But the paper can't be just about news anymore because readers with computers now see it as stale by morning.

When Rosenthal, whom his colleagues call Rosey, arrived in San Francisco he gave an informal talk to a gathering of the Society of Professional Journalists in which he laid out his vision for the paper. The story, he said, was everything. He was the editor who shepherded "Blackhawk Down," the 1997 tale in the Inquirer about a dramatic botched rescue of Army rangers from Somalia that eventually became a book and a major motion picture. The point was that what he prized above all were well-told tales. Good writing.

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