SAN FRANCISCO (AP) -- The owner of the San Francisco Chronicle will sell or close the daily newspaper if it can't dramatically lower expenses within the next few months.The Hearst Corp., which owns northern California's largest daily newspaper, didn't specify a savings target in Tuesday's grim announcement. But the New York-based company said the cost cutting will require significant layoffs.
After years of struggles, the San Francisco newspaper's troubles have worsened amid the longest recession since the early 1980s. Hearst said the Chronicle lost $50 million last year and is hemorrhaging even more money so far this year.
Several other struggling newspapers around the country are also on the sales block, have filed for bankruptcy or are facing a possible shutdown.
Also Tuesday, the chief executive of Philadelphia's two daily newspapers pledged Tuesday to roll back a $232,000 raise while his company tries to reorganize in bankruptcy court.
Philadelphia Newspapers LLC, which publishes The Philadelphia Inquirer and Philadelphia Daily News, filed for Chapter 11 bankruptcy protection on Sunday, 2 1/2 years after a group of local investors bought the company for more than $500 million.
Chief Executive Brian Tierney and other executives have insisted the company, while strangled by debt payments, remains profitable despite falling circulation and revenues. But some lenders balked at that analysis at Tuesday's initial hearing on the bankruptcy petition and questioned decisions being made by Tierney, a former public relations executive.
Meanwhile in New York, Journal Register Co., publisher of the New Haven (Connecticut) Register and other newspapers, won approval to continue paying basic operating costs, including employee salaries and benefits and newspaper delivery contracts. Lawyers representing lenders made no objections.
The Yardley, Pennsylvania-based company sought bankruptcy protection a day before the Philadelphia newspapers' filing and said then that JP Morgan Chase & Co. and 26 of the company's 37 lenders had agreed to a reorganization plan to cancel its stock and become a closely held company controlled by its lenders.
Lawyers for the lenders said they were unaware of any objections from any debt holders to that plan, although they did not say why the remaining lenders had yet to sign on.
Besides Journal Register and the Philadelphia newspapers, Los Angeles Times publisher Tribune Co. and owners of the Star Tribune of Minneapolis have made separate Chapter 11 filings for bankruptcy protection amid steep declines in advertising revenue.