SF Chron loss closer to $70M per year
Based on statements from company negotiators reported by the California Media Workers Guild, the newspaper’s losses in 2008 were approximately 45% greater than previously reported.
After plunging more than $1 billion into the newspaper without seeing a dime of profit since 2000, the Hearst Corp. last week threatened to sell or close the Chronicle if sufficient savings were not identified.
Updating its members this week on a series of grim bargaining sessions since the ultimatum was issued, the Guild reported that the company threatened to eliminate up to 225 jobs unless its unions agreed to a variety of concessions, including the loss of 150 jobs under Guild jurisdiction.
Further savings would come from far-reaching cuts in the pay and benefits of remaining Guild employees, as well as so-far unspecified layoffs and concessions from the production and circulation positions covered by the Teamsters.
“Even under the company’s plan,” the Guild reported, “management expects at least $50 million will be lost this year by the Chronicle due to recession and the collapse of the ad market in print media.”
Assuming average annual pay and benefits of $90,000 per each severed employee, the company would save some $20 million by unilaterally eliminating 225 positions. If the company would still be losing $50 million after cutting expenses by $20 million, then its actual losses can be no less than $70 million.
(Careful readers will note that I previously estimated an average annual cost of $80,000 per employee at the Chronicle. However, knowledgeable sources have told me that number was too low.)
Assuming aggressive cost cutting succeeded in trimming the annual deficit to $50 million, a question remains as to how long Hearst will continue to suffer such losses.
The alternatives are closing the paper – as is evidently about to happen at the company’s Seattle Post Intelligencer – or merging the Chronicle into the surrounding cluster of newspapers owned by MediaNews Group.