Seattle Post-Intelligencer: Up For Sale, Up in the Air

[Published in conjunction with the blog seanax.com]

You could say it came as a complete surprise when, on Thursday evening, local TV station KING-TV announced that, according to unnamed sources, the Seattle Post-Intelligencer would be put up for sale. The P-I staff had no news of it and the Hearst Corporation, which owns the P-I, would not comment. It could have been a rumor, a hoax or just an incorrect story. At least that’s what many of us hoped. It wasn’t until Friday afternoon that news was confirmed and the news made public.

But if the announcement was a surprise, the closing of a Seattle newspaper was hardly unanticipated. Traditional print newspapers have been on life support for years and Seattle was the last city of its size to still have two competing daily newspapers. Both the Seattle Time and the P-I have both been losing money. The two papers appeared to be attempting to outlast the other and be the last paper standing. While the locally-owned Times has a significantly larger circulation (198,741 to the P-I’s 117,572 as of September, 2008, according to a P-I report), it is also deeply in debt and its sale of a number of newspapers in Maine (which are being sold at a significant loss) is running into problems. Many thought that the more financially robust Hearst would be able to hold out longer in the face of losses.

The Hearst Corporation says that if the paper is not sold within 60 days, it will either be shut down or turned into a web-only publication with a greatly reduced staff. A sale in this climate seems unlikely, as the economic downturn has reduced advertising dollars even farther.

Obviously, this has a direct impact on me – I’ve been the paper’s primary freelance film critic for the past eight years. The paper’s longtime staff film critic William Arnold (who has been in the post for over 30 years) will obviously be out of a job, another name for Sean Means’ list of “The Departed” (film critics losing their positions) at the Salt Lake Tribune.

But self-pity aside, a lot of career reporters, editors, copyeditors and other folks will be losing their jobs, even if the paper goes web-only, and there are not that many options for them in this climate. For my fellow freelancers, it’s one less venue in a very competitive market.

More importantly, Seattle will be losing a major source of news. Papers have been losing readers (mostly younger readers) to the Internet, but there is still no viable web model to replace the kind of aggressive investigative and in-depth reporting that newspapers have provided for centuries. And competition between papers one of the factors that drove such reporting and kept everyone honest. So yes, one way or another, Seattle will go the way of Los Angeles and San Francisco and so many other major metropolitan America cities and become a one-newspaper town.

For more information, see the Seattle P-I article here. The Seattle Times offers their take here. Yahoo has the AP wire article on it here.

Update: David Hudson takes a look at the big picture of newspapers closing and downsizing across the country at IFC Daily.

Former Seattle Weekly editor Knute Berger offers his perspective in his Mossback column at Crosscut.

The full text of the official Hearst Corporation press release is reprinted below:

SEATTLE, January 9, 2009—Hearst Corporation announced that it is offering for sale the Seattle Post-Intelligencer (P-I) and its interest in the Joint Operating Agreement (JOA) under which the P-I and The Seattle Times are published.

Hearst said that should a sale of the P-I not occur within 60 days, it will pursue other options for the property. These options include a move to a digital-only operation with a greatly reduced staff or a complete shutdown of all operations. In no case will Hearst continue to publish the P-I in printed form following the conclusion of this process.

Regarding speculation over Hearst’s possible interest in acquiring The Seattle Times newspaper, Hearst said such an acquisition is not under consideration.

The P-I, which Hearst has owned since 1921, has had operating losses since 2000. The P-I lost approximately $14 million in 2008 and its forecast anticipates a greater loss in 2009.

“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,” said Steven R. Swartz, president of Hearst Newspapers. “But our losses have reached an unacceptable level, so with great regret we are seeking a new owner for the P-I.”

Operating under a JOA since 1983, the P-I and the Times have maintained separate news operations, with The Seattle Times Company handling production, circulation, advertising sales and all other non-news operations for both newspapers. The agreement provides that the revenue taken in by the Times’ business operation, after deducting operating costs, is shared 60 percent to the Times newspaper and 40 percent to the P-I. The newspapers must then pay for their editorial operations from their shares of these funds.

The P-I, founded in 1863 as the Seattle Gazette, has daily circulation of 114,000, according to the most recent report from the Audit Bureau of Circulations. The Sunday newspaper, which is a joint enterprise of the Times and P-I, has circulation of 382,000, according to the same report. Seattlepi.com, the newspaper’s Web site, had page views of approximately 500 million in 2008, and has an average of 4 million unique monthly visitors, according to the Web site’s internal logs.

Hearst has retained newspaper industry investment bankers Broadwater & Associates of New York to search for a buyer for the P-I.