SAN FRANCISCO -- Taking a major step toward the sale of the company, Chronicle Publishing has hired investment bank Donaldson Lufkin & Jenrette (DLJ) to assess the worth of the media enterprise, employees at the company's flagship newspaper, The San Francisco Chronicle, said late Monday.
At a meeting called by the
managing editor Jerry Roberts and executive editor Matt Wilson, the paper's staff learned of the move and that DLJ may try to find a buyer or buyers for some or all of the company's assets, several people attending the meeting told
. Besides the
, the company owns the
Telegram and Gazette
in Worcester, Mass., and the
of Bloomington, Ill.;
; and four television stations including
in San Francisco.
"Everyone here is very prickly and on the edge of their seats," said one longtime reporter, who asked that his name not be used. Chronicle Publishing and DLJ couldn't be reached for comment.
Rumors have swirled on and off for years that some of the owners of the privately held company have wanted to dump the
newspaper. A key sticking point has been the newspaper's uneasy partnership with its afternoon competitor, the
San Francisco Examiner
, owned by the
Under a joint operating agreement formed in 1965, the two papers share the cost of operations and split revenue evenly. The agreement is set to expire in 2005.
Another problem is that the newspaper is owned by several branches of the family of founder Michael deYoung, and two of these branches -- the Thieriots and the McEvoys -- have a longstanding feud. In 1995, for example, when the board voted to sell its cable assets to
, it had to first oust 75-year-old matriarch Nan Tucker McEvoy from the chairmanship she had held for two decades. McEvoy still owns a third of the company.
Wilson told his staff that a sale could be a long way away, people attending the meeting said.
Another staff reporter said the staff was informed that the
board has hired DLJ to assess all its options, but whether that means that they intend to also sell the TV station is anyone's guess. "They were purposely vague," he said.
The meeting came during a time when the
has been hit by a spate of staff defections. It lost five people in the past several weeks, including business reporters David Einstein, Jamie Beckett and Julia Angwin.
Founded by deYoung and his brother Charles as the
Daily Dramatic Chronicle
in January 1865, when the two were teenaged entrepreneurs, the
still boasts today of beating other dailies on the story of Lincoln's assassination only three months after the newspaper began publishing. Bylines from the likes of Mark Twain and Bret Harte helped give the paper the largest circulation west of the Mississippi, but Hearst's
soon offered a stiff competition that lasted decades.
Under McEvoy's leadership, the
has rebuffed proposals to sell the paper to deep-pocketed Hearst, despite the
's smaller circulation. Both companies have been dancing around each other, because once the joint operating agreement ends, nothing would prevent Hearst from publishing the
in the morning, and competing head to head with the Chronicle. When he stepped down as publisher of the
in 1994, William Randolph Hearst III told the
newspaper, "The Hearst Corporation is going to be publishing in San Francisco permanently."
Phil Bronstein, executive editor of the
, claimed to be unfazed by the upheaval at his competitor. "We've been through this a million times," he said, noting that the
newsroom has been "immunized" by the numerous rumors about the fate of both newspaper companies. "We have been through endless rumors and endless speculation, and we continue to put out the paper."
-- Adam Lashinsky contributed to this report.