Feb. 25 (Bloomberg) -- San Francisco may become the largest U.S. city to lose its main daily newspaper after Hearst Corp. threatened to sell or close the Chronicle unless it can push through more job cuts.

The publisher, already trying to sell the Seattle Post- Intelligencer, said yesterday that it would seek voluntary buyouts for a “significant” number of its 1,500 employees after the San Francisco Chronicle lost $50 million last year. The announcement follows two newspaper owners filing for bankruptcy protection since Feb. 21.

“The Chronicle plays an important role in our civic life and we don’t want to see this treasured institution close its doors,” San Francisco Mayor Gavin Newsom said yesterday in a statement. The California city is the nation’s 14th largest, with an estimated 744,000 residents, according to the U.S. Census Bureau.

Publishers including New York Times Co. and Gannett Co. are cutting costs and seeking to sell assets after forecasting further declines in print advertising sales. Philadelphia Newspapers LLC, publisher of the Inquirer, and Journal Register Co. filed for bankruptcy protection to reorganize their debt.

Industrywide print advertising sales suffered their worst plunge in at least 37 years in the third quarter, according to the Newspaper Association of America. Newspapers haven’t managed a gain since the first three months of 2006.

“Metro newspapers are facing a terrible environment in long-run terms,” said Paul Steiger, a former Wall Street Journal managing editor and director of the nonprofit news Web site ProPublica. “You’ve got to hope for economic recovery, but you’ve got to hope for a better business model, too.”

Los Angeles Times, Chicago Tribune

Miami Herald-publisher McClatchy Co., Media General Inc. and New York Times suspended their dividend to cope and Gannett cut about 4,000 jobs last year. New York Times is looking for buyers of its minority stake in the Boston Red Sox baseball team.

Tribune Co.’s bankruptcy filing in December was followed last month by the Minneapolis Star Tribune. Tribune has been cutting jobs and costs at its eight dailies, which include the Los Angeles Times and Chicago Tribune.

Seattle and Tucson, Arizona, where Gannett is trying to sell its Citizen newspaper, both have two competing for-charge dailies. Clarity Media Group distributes its free Examiner daily in San Francisco.

Hearst said Jan. 9 it would close or turn its Seattle Post- Intelligencer into a Web-only operation if it couldn’t find a buyer by March. The newspaper lost $14 million last year.

Union Talks

E.W. Scripps Co. said Dec. 4 that it was seeking a buyer for Denver-based Rocky Mountain News and its share of a joint operating agreement with MediaNews Group Inc.’s Denver Post. Cincinnati-based Scripps said closure is among the options it would consider for the unprofitable newspaper if no acceptable bid comes in.

A Hearst spokesman, Paul Luthringer, said the publisher may close the 145-year-old Chronicle if it doesn’t find enough takers for the buyouts. He declined to give a timetable or to say how many job cuts Hearst hopes to obtain.

The publisher will have to reach agreement with the Chronicle’s unions on the job cuts, Luthringer said. California Media Workers Guild Local 39521 said on its Web site it plans to meet with Chronicle management today.

The newspaper will seek to eliminate non-union jobs as well.

Connecticut Newspapers

Hearst in August bought a group of Connecticut newspapers that Luthringer said are profitable. He said some of the publisher’s other newspapers are profitable as well, without providing specifics.

Circulation at the Chronicle, the 12th-largest newspaper in terms of distribution, fell 7.1 percent in the six months through September, according to the Audit Bureau of Circulations. Hearst said yesterday it expects the newspaper’s loss to widen this year.

“This has to happen quickly,” Mark Adkins, the Chronicle’s president, told newsroom staff yesterday. “We are talking about days and weeks.” The newspaper’s editor, Ward Bushee, said he wasn’t aware of any potential buyers for the paper.

“Don’t expect anyone to buy it,” said Ken Doctor, an analyst with media consultant Outsell Inc. in Burlingame, California.

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net

Last Updated: February 25, 2009 11:12 EST