By Susan Zachem

For the first time in more than a century, San Francisco may end up as a one-newspaper town following the recent shell game between the Chronicle and Examiner, according to analysts.

The Hearst Corp. announced Aug. 6 that it bought its rival, the morning San Francisco Chronicle, and was putting its afternoon San Francisco Examiner up for sale. A sales price was not specified in the announcement.

The two papers have been produced under a joint operating agreement since 1965, with their marketing and printing functions run by the San Francisco Newspaper Agency.

In its announcement statement, Hearst said: "All of the San Francisco Chronicle newspaper employees and all employees of the San Francisco Newspaper Agency will be offered continued employment. If the Examiner is combined with the Chronicle, Hearst will also offer continued employment to all of the employees of the Examiner. If the Examiner is sold, any employees not offered employment by the buyer will be offered continued employment by Hearst at the Chronicle."

Pres. Denis Mosgofian of San Francisco 4N, which along with San Francisco 24H represents printing production workers at the San Francisco Newspaper Agency, said the assurances of job security from Hearst are welcome. However, he noted, "what is not spelled out is what that employment is."

Doubt about a sale of the Examiner echoed throughout the media industry. Media consultant John Morton said there is a "very slim-to-vanishing chance somebody will want to buy the Examiner. Someone might come out of the woodwork...but it won't be anyone in the newspaper business."

Mosgofian said it is extremely unlikely that anyone will buy the much lower circulation Examiner since Hearst said it will not include in the sale the use of the printing and distribution facilities that are now shared by both papers. "All that's being sold is the Monday through Friday daily paper and its name but nothing with regard to what it takes to put the paper out," he said.

Mosgofian said the impact of losing the second newspaper will be felt in several ways. "It is a loss for San Francisco not to have a second daily editorial voice – even if our union does not always agree with that voice," he said. "It also puts tremendous editorial power in the hands of the one main daily newspaper."

Mosgofian added: "It also will put a monopoly on advertising that will drive up costs for businesses that will probably be passed along to the general public, most of whom are working people. The concern of all the unions is their own members' employment and livelihoods and the well-being of working families in San Francisco."

The Chronicle has a daily circulation of 482,268, while the Examiner has a daily circulation of 114,776 for Monday through Saturday. The joint Sunday Examiner & Chronicle has a circulation of 605,356.

Hearst said it hired an investment banker to seek a buyer for the Examiner. If a "qualified buyer" is not found, Hearst said, it will combine the Examiner with the morning Chronicle.

The Examiner sets its founding date as March 4, 1887, when William Randolph Hearst placed his name on the masthead as "proprietor." Hearst inherited the paper from his father, who had taken it over in 1880 as payment on a gambling debt.

The Hearst Corp.'s communications holdings include 12 dailies, as well as extensive magazine, book and business publishing, television and radio broadcasting, cable network programming, and newspaper features distribution.

As part of its purchase of the Chronicle newspaper, Hearst also bought the Chronicle's "SF Gate" website.

The Chronicle was founded in 1865 by Charles and Michael de Young, whose heirs kept it a family owned newspaper until now.

The de Young heirs put the paper on the market in June. Under the terms of the JOA, Hearst had the right to match any offer for the Chronicle. Hearst said the company had notified the U.S. Justice Department of the transaction and the termination of the JOA.

Among Bay Area newspaper columnists, there was speculation on how the Chronicle-Examiner situation will impact competition among the San Francisco daily, Knight Ridder's San Jose Mercury News and Contra Costa Times, and William Dean Singleton's Alameda Newspaper Group, which owns the Oakland Tribune, Hayward Daily Review, Fremont Argus, Tri-Valley Herald, and the Alameda Times-Star.

Knight Ridder moved its headquarters from Miami to San Jose last year to focus attention on the Mercury News. Mosgofian noted that, if Hearst wants to compete with the Mercury News, "it would have to improve local coverage that is really important to people in San Francisco and in the other communities they're trying to reach. The Mercury News does more in the way of in-depth investigative reporting that really grabs the readers and provides more coverage."