The Chronicle's Struggle
The financial situation at the San Francisco Chronicle has little to do with words, pictures, editing or Phil Bronstein's charisma, despite the heavy emphasis on the editorial product in Lori Robertson's piece, "The Chronicle Chronicles" (October/November).
And no one should be "mystified" that the San Francisco Chronicle loses millions of dollars a year. The reason for this is very simple: They do not sell enough advertising at high enough rates to pay the bills, one of which is a reasonable profit to Hearst, their corporate parent. This failure has roots in the way the 1965 JOA was structured, compounded by the changes in Bay Area population geography.
I had the opportunity to observe all of this starting in 1983 when I went to work in the San Jose Mercury News' advertising department. I came here expecting to be locked in constant, overt battles with the San Francisco Newspaper Agency for advertising dollars. I was flabbergasted to find that was not the case. Instead I found the highest level of management of the SFNA nearly totally inwardly focused. They served two equal corporate parents, each with very different operating philosophies.
They largely ignored the population and economic boom happening outside of "The City" of San Francisco. They seemed unconcerned that we were generating hundreds of millions of dollars of revenue, at very high margins, while building circulation year after year for decades on end. At the Mercury News we always tiptoed carefully around the issue of competing with the SFNA. We did not want to kick a sleeping giant.
The giant finally woke up on its own in 1993 when John Sias became president and CEO of the JOA. But by then it was too late. A dozen years of constantly changing strategies and a bunch of publishers buzzing through the revolving door have not helped.
The Chronicle would like to position itself as a "regional" newspaper. But neither the newspaper's circulation and readership nor the Bay Area's economics support this stance. According to the Chronicle's Web site, their average-day reach of the San Francisco market area is 21 percent. It stretches to 27 percent if the past 30-day online audience for SFGate.com is added. You cannot set the Bay Area agenda if 7 to 8 out of 10 readers in the market do not see your newspaper on an average day. This circulation/readership status makes increasing their ad revenue by the tens of millions of dollars needed a massive challenge. All of the significant ad revenue in the largest Bay Area counties is already pretty much committed to the newspapers which serve those counties.
So where does this leave the San Francisco Chronicle? Based on what I know of the current management the status quo is not an option. They have a monomaniacal determination to make the paper profitable. I suspect they will give AJR plenty to write about in the future.
Retired advertising executive
San Jose Mercury News
San Jose, California