The San Francisco Chronicle has been bleeding money for so long at a rate of $1 million a week that some analysts speculated that the paper on the edge of Silicon Valley would be the first to stop printing on paper altogether.
Not so, the remaining newsroom staff (those who had survived rounds of buyouts and cost cutting) were told in meetings a few weeks ago. Instead, the paper is going to be the biggest U.S. partner to a Canadian firm that promises to deliver a brighter, glossier, and slicker product.
The Chronicle's owner, the Hearst Corporation, signed a billion-dollar deal with Montreal's Transcontinental Media, a printer that grosses $1.7 billion a year printing books, magazines, fliers, advertising circulars, and newspapers, including the Canadian and upstate New York editions of The New York Times.
“It could be a new day for newspapers, like when USA Today hit the newsstands with all that color and offset,” says Chuck Davis, business agent for Teamsters Local 853, who is warily eyeing the $200 million construction of new presses in Fremont.
There are some 250 employees now printing the Chronicle on outdated presses “held together with baling wire,” at five locations in a system that, according to Davis, makes little financial sense.
The press on Cesar Chavez in San Francisco isn't big enough to do the run for all the readers in the city, so the paper relies on another press in Union City, but to get there, you pass another of its printing plants in Richmond. Glossy advertising sections are printed in Nevada. The final product comes together like some “Where's Waldo?” scenario.
Transcontinental will have the capacity to do all stages of the operation, printing the Chron's 365,000 daily copies (430,000 on Sunday), and could also pick up other area newspapers.
Davis is working to make sure that the current Chron printers and their union get in the door of the new press, which will start operating next year. “It depends how much pressure we can put, to have them hire our folks and get them to unionize,” he says.
Why would the Canadian company risk so much money on the newspaper business when so many eyes are turning to the Internet, and the Chron's circulation has dropped by a third since 1993?
Transcontinental CEO Luc Desjardins told a Toronto management and technical conference that he sees print sticking around, the same way radio didn't kill off newspapers and radio didn't get killed by TV. “The Internet won't eliminate all the rest,” he said.
But he spelled out another reason why he favors a more timely medium like daily newspapers. Chinese printers, who pay workers only $1,000 a year, have cut into his company's less-timely book business. The best advantage his company has over such a cheap labor force is to produce something needed more quickly.
Chronicle employees were told this new press would lead to a redesign of the paper and could also mean better advertising, with ads that might fold out like maps and lead buyers to a store.
Now if only the presses could print money, maybe the Chronicle could be profitable again.