NY Times: The Seattle Times resurgent as a new solo act

EDITOR'S NOTE: We don't normally run other news organization's stories about The Seattle Times in our pages. We try to report fairly and accurately on ourselves.

But a piece in Monday's New York Times got a lot of national attention and sparked dialogue in the continuing conversation about the future of newspapers and journalism. We decided to share it with you here, just as it ran in The New York Times.

SEATTLE — When The Seattle Times became this city's only surviving daily newspaper in March, even The Times itself could not muster much optimism about its chances.

Frank Blethen, the publisher, said then that the demise of the rival Post-Intelligencer, known as the P-I, was no guarantee his money-losing paper would make it. In an article in March on Seattle's becoming "a one-newspaper town," The Times asked, "Will it become a no-newspaper town?"

But less than five months later, a nearly forgotten word has crept back into Times executives' vocabulary: profit. "On a month-to-month basis, we are starting to operate in the black," Blethen, who is also CEO of The Seattle Times Co., said in an interview.

How much black ink and by what measure, the privately held company will not say, and amid a sharp advertising downturn, no one denies that its situation remains precarious.

But The Times has improved its prospects by picking up most P-I subscribers and managing to keep them so far. It says its daily circulation rose more than 30 percent, to more than 260,000 in June, from about 200,000.

Oddly enough, what remains of the P-I is also faring better than expected. The Hearst Corp. kept the paper's Web site alive as a news operation with a small staff, heavily reliant on more than 200 unpaid bloggers who write on things as diverse as their neighborhoods, cooking and marathon running.

Industry analysts called it a longshot experiment, but SeattlePI.com has kept most of the reader traffic it had as a newspaper site. Hearst will not say whether it makes money, but says audience and revenue are ahead of projection.

The Times and the P-I had a joint-operating agreement, sharing production and delivery expenses, an arrangement that is meant as a life raft for failing papers but that has often turned into cement shoes for the stronger partner.

The Times had been fighting for years to get out of its pact with Hearst, arguing that it drained resources and artificially kept a weaker competitor afloat.

Joint-operating agreements "delay the inevitable death of the second newspaper, which becomes a drag on the operation," said John Morton, an independent newspaper industry analyst. "It's not too surprising that The Times is doing better on its own."

The Times, long seen as one of the best regional papers in the country, has had an unusually big newsroom for its circulation, and a devotion to time-consuming investigative work. Blethen resisted cutting the staff or the size of the paper long after most big papers started to shrink.

But cuts became unavoidable, and the newsroom has dropped to 210 people, from about 375 five years ago. Now, Times executives have an unexpected hope that the cutting has stopped, at least for a while.

"We're about at the floor of what we feel we can have and still put out a Seattle Times we can be proud of," said David Boardman, the executive editor. "We've had to be more thoughtful in choosing what we do, but I'm not one to claim that less is more. Less is less."

SeattlePI's news staff of 20 people, down from the P-I's 165, covers only a few subjects closely, like crime, the aerospace industry and transportation, while offering links to news on other sites. Michelle Nicolosi, the executive producer, said the site, rather than resembling a traditional news organization, "is trying to be Seattle's home page."

Other news sites populated by former P-I staff members have also cropped up, expanding Seattle's already-vibrant range of alternative news choices, and turning the city into something of an online news laboratory.

"There's still a lot of competition, but only in certain niches," said David Brewster, publisher of Crosscut.com, a 2-year-old news site. "The Times is weaker than it used to be, but a lot of the people who said the loss of the P-I was the end of the world, now they're reading The Times and saying it's better than they expected."

The Times has repeatedly defied the odds just to get to this point.

It dominated its market as an afternoon paper, decades after conventional wisdom had pronounced afternoon papers dead. The Times switched to mornings in 2000, going head to head with the P-I, and suffered a seven-week strike less than a year later, without a significant circulation loss from either trauma.

The Times was more staid, more suburban and more polished than the P-I, often making it seem as if the arm of an international media giant was the scrappy underdog. But for years, the guessing in the industry was that the Blethen family, which controls The Seattle Times Co., would sell to Hearst, which would then close one of the papers.

But the family held on, turning down lucrative offers from Hearst and others. And in the decade before the P-I closed, its circulation dropped sharply, to 117,000, while weekday sales of The Times barely changed.

The Times is one of the last family-run papers in the country, controlled since 1896 by the Blethens. They own 50.5 percent of the company (McClatchy owns the rest), and eight family members work in it.

But if the family's commitment to journalism has been admired, its business acumen is another matter.

The company borrowed more than $200 million in 1998 to buy three Maine newspapers, and it sold them this year, reportedly for less than $40 million. Its biggest mistake may have been the joint-operating agreement struck with Hearst in 1983, before Frank Blethen, 64, took control of the company.

Under the arrangement, the P-I's only operation was its newsroom. The Times printed and delivered the P-I, sold its subscriptions and ads, and paid all non-newsroom expenses for both papers. Whatever revenue was left was split, 60 percent to The Times and 40 percent to the P-I, a division that Times executives came to see as deeply unfair.

But the joint operation had advantages when the P-I stopped printing, because The Times was able to simply switch P-I subscribers to The Times. Subscribers were free to cancel, but not many did. Times executives say that of those former P-I subscriptions that have expired, 84 percent have been renewed; time will tell whether it can sustain that rate in the long run.

The paper also raised its prices in March, increasing circulation revenue.

With most P-I readers on board, Times executives say they have been able to maintain the ad rates they charged for space in both papers. The volume and revenue were down sharply, but Blethen said the decline was consistent with what had happened across the industry.

"We're cautiously optimistic that we've been bouncing along the bottom for the last couple of months," he said.