Hearst's Effort to Launch an Online-Only P-I Hits a Snag

By Sandeep Kaushik March 9, 2009

Hearst's effort to launch an online-only P-I out of the ashes of the print version has hit a significant snag: They can't get people to sign on. 

Last Thursday, Hearst representatives seemingly all but announced their intent to move forward with an online-only P-I once the print edition ceases publication in upcoming days, when company representatives one-by-one called in about 20 selected editors, reporters and web staff to closed-door meetings where they made provisional offers of continued employment with the online venture.

But this weekend I learned that the viability of that effort now is at least somewhat in doubt, as a significant number of key P-I staffers rejected the initial offers, which involve 30-percent-plus pay cuts, no union representation, reduced vacation, and which require employees who accept to give up the relatively generous severance package the company is giving those who leave the company.

Those rejecting the initial offers include several web producers and New Media employees who are seen as critical to keeping the P-I's website up and running.

At least four web/online folks turned down initial offers, including producers Mike Thompson, Jake Ellison and Sarah Rupp; and interactivity editor Don Smith. One P-I staffer told me that, “It has become such a desperate situation that Hearst had to go back and greatly sweeten offers to several of these web folks, and even then, only one or two actually bit.”

Also, several news and business reporters and editors also have turned down offers. Eli over at SLOG has already reported that reporter Hector Castro and Joe Tarakoff (the writer for the P-I’s popular Microsoft blog), turned down initial offers, and there are apparently others as well. 

My sources at the paper are saying that this situation is creating a serious migraine for Hearst representatives working on moving forward with the online-only venture. As of late Friday, Hearst was still putting forward sweetened offers to key staffers—I'm told web producer Brian Chin, accepted a second, improved offer after rejecting the first, while interactivity edit Don Smith did not—and likely will need to make several more, my sources say.

Bottom line: An online-only P-I is not a done deal. At least not yet.  

This news seems to confirm what I had reported here last month:

One fact or that could complicate the start of an web news site is the relatively generous severance package Hearst is offering P-I employees, which amounts to two weeks of pay or more for each year of employment at the paper. Should Hearst go forward with the effort, P-I employees assume that those the company attempts to retain would be offered lower-paying non-union jobs. And with the future viability of an online newspaper venture uncertain at best, some of the P-I’s most web-savvy staffers could opt for the severance money – which will amount to well over six months pay for many long-time employees – rather than staying on at what would amount to a new internet start-up.


I learned this afternoon that Hearst corporate has still not given the final green light to move forward with the online-only post-print P-I. However, a well-informed source there puts the likelihood of the effort moving forward at 90 percent, saying they have sufficient staff on board to make the project viable.

Some other aspects of Hearst's assumptions about the online P-I are also becoming clearer. I'm told that Hearst anticipates initially losing about 25-30 percent of the P-I's current online readership of close to 3 million unique visitors a month once the P-I stops printing, but hopes to build back to current readership levels within three months of launch. If Hearst succeeds in doing that, the company then would probably seek expand the P-I staff by trying to hiring back some of the print reporters whose jobs are going to disappear in the next few days.

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