Company hired to sell PI, but analysts skeptical

The managing director of the investment company hired to sell the state's oldest newspaper says they will do the very best job they can, but industry analysts are skeptical a buyer will materialize.

The Hearst Corp. has hired newspaper industry investment bankers Broadwater & Associates of New York to seek a buyer for the Seattle Post-Intelligencer.

In an interview Friday, managing director Bob Broadwater told reporters from the P-I, as the paper is known locally, "It's clear that right now the overall marketplace for media is very challenging. The financing climate is very bad, and there have not been a lot of transactions recently."

Broadwater would not comment when asked if he was optimistic about the firm's chances of selling the paper.

But, he added, "We've been hired to sell it, and that's what we're going to do. We intend to do the very best job we can."

Hearst put the Post-Intelligencer up for sale on Friday and said that if it can't find a buyer in the next 60 days the paper would likely close or continue to exist only online.

"The odds of finding someone to buy a newspaper in this time are very, very low," said Stephen Lacy, a professor of communications and journalism at Michigan State University in East Lansing.

He said the economy and the Internet combine to make this potentially the most difficult time in history for newspapers. Lacy predicted only one newspaper could survive in Seattle, probably the one with the bigger circulation because it's the most effective buy for advertisers.

The P-I, which was founded as the Seattle Gazette in 1863, has a weekday circulation of 117,000, according to the Audit Bureau of Circulations. The Seattle Times, Seattle's other daily newspaper, has a circulation is about 199,000.

Hearst has owned the P-I since 1921, and the paper has had operating losses since 2000, including $14 million last year.

Other newspapers in stronger market positions than the P-I have found it difficult to find buyers, said Rick Edmonds, media business analyst with the Poynter Institute, a journalism think tank.

"If Hearst wants to do it in 60 days, I don't think the odd are very good," Edmonds told The Seattle Times.

Under a 1983 joint operating agreement, The Times and P-I have competing news operations, but The Times runs the business operations of both papers, including advertising sales.

An online-only Seattle P-I may not even be a profitable endeavor, especially if the company runs the operation with a greatly reduced staff, as it said in announcements Friday, said Maryland-based newspaper analyst John Morton.

"With a greatly reduced staff, that reduces the appeal of the P-I," Morton said. "It doesn't sound like a winning formula."

Washington, D.C., media economist Miles Groves speculated a local buyer might be found under the right circumstances.

"It's always possible there's someone out there with lots of money who wants a voice," Groves said.

Kathy George, attorney for the Committee for a Two-Newspaper Town, said the group, which was formed during a four-year legal battle between the owners of Seattle's two daily newspapers, was already talking about helping to find a buyer for the P-I.

She said a public-spirited local buyer and employee ownership were both possibilities.