Blethen memo warms of 'painful downsizing' at Seattle Times

by Joe Strupp , Editor and Publisher

In what The Seattle Times described as "an unusually blunt internal memo," Publisher Frank Blethen told employees that the paper faced its "most difficult and painful downsizing" in history as a result of print revenue loses expected to reach $33 million for 2007 and 2008, the paper reported, adding that he blamed the downturn on ad dollars shifting to the Web.

"With the company at bare bones, these cuts will hurt deeply going into 2008 and the remainder of the decade," Blethen wrote. The paper added that, "senior executives have found ways to shave $21 million in costs for the coming year, but another $6 million in expenses will have to be cut, the memo said. Blethen did not say how those cuts would be achieved."

But the Times stated that Blethen was committed to maintaining ownership of the paper, the flagship of his family's media company. His memo said that his options included "selling the paper, closing its doors or transforming the business 'to a smaller, more focused organization... For better or worse, my family has chosen door number three," he wrote.

Times spokeswoman Corey Digiacinto told the paper that next year's budget changes were still being finalized and details would not be announced until early 2008.

"There will likely be some difficult cuts, but this is a temporary situation until we can realign our business model to match the changing revenue picture," she told the paper.

Blethen's memo followed one last week from the Pacific Northwest Newspaper Guild, the paper's largest union, that raised questions "of content and staff cuts in a message to its members."

The paper reported that the guild said members were hearing cuts being considered "include consolidation of the East and North news bureaus into office space at the Bothell printing plant, as well as potential elimination of the South King County and Washington, D.C., news bureaus."

The Guild, facing an expired contract next year, said on its Web site Thursday that Blethen's message "is no doubt a way of preparing the troops for operational and content changes."

The Times' reported that "revenue from print advertising will fall below $200 million for 2007, down 9 percent from 2006, Blethen's memo said. It added that he expects a similar decline next year. Print advertising is the main source of revenue for major newspapers."

"The continual drop in print-ad revenue 'has had the most dramatically negative impact on the value of newspapers and potentially their economic viability since the Depression,'" the paper quoted Blethen's memo as saying.

The Blethens own 50.5% of The Seattle Times Co., while McClatchy Newspapers owns 49.5%.

"Blethen said he anticipated a 'difficult and radical transformation' to a more nimble organization that provides print and online news, information and advertising based on a foundation of journalism and community service," the paper reported, adding he stressed, "We must adapt or die and it isn't an easy challenge."

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