Seattle Times publisher hints at deep cuts

Source: Seattle Post-Intelligencer

Seattle Times Publisher and Chief Executive Frank Blethen painted a dark picture of the newspaper's near-term future in a year-end memo sent to staffers Thursday, hinting at deep cuts without mentioning layoffs.

"The past several weeks your senior leadership group has been engaged in the most difficult and painful downsizing this company has experienced," he wrote.

"Until now we've been able to minimize some of the harm from the decade's downsizing. But, with the company at bare bones, these cuts will hurt deeply going into 2008 and the remainder of the decade."

... Blethen noted that The McClatchy Co., which owns 49.5 percent of the controlling stock of The Times Co., has twice written down the value of that holding.

The shares were valued at "well over $200 million" when the Sacramento-based company acquired them through its $4.1 billion purchase of Knight Ridder Inc. in June 2006, he said. They were valued at "only $19 million" last month, he said.

Read more: http://seattlepi.nwsource.com/business/345186_newspapermemo28.html

---

Link contains the full text of the publisher's memo.

For the past 25-odd years, the Times and Post-Intelligencer (owned by Hearst) have been working under a Joint Operating Agreement, wherein they share business operations. This was needed at the time of the initial JOA, as the Post-Intelligencer was in danger of folding otherwise.

Over the past ten years, the Times has done all it can to try to run the P-I out of business so that it would become the only paper in Seattle. This included stonewalling on a labor agreement, causing a reporter's strike that (it was thought) would push the P-I to close down. When that didn't happen, the Times then tried to have the JOA dissolved, based on their losses during the strike (even though they were by far the stronger paper at the time). That attempt was struck down by the judge administering the JOA, and meant the Times was unable to force the P-I out of business.

Nevertheless, it was always figured that, eventually, the P-I was likely to shut down and hand the Times the entire Seattle media market. Now, it seems like it's the Times that's in trouble.