I started Beyond Chron in April 2004 as a progressive alternative to the San Francisco Chronicle. We chose the name to make the point that we would offer news and perspectives that went “beyond” what was found in the Bay Area’s largest circulation daily newspaper. Little did any of us suspect in choosing our name that we would outlive the San Francisco Chronicle. But the Hearst Corporation’s announcement last week that, absent significant cost savings, it would shutdown the Chronicle means the paper’s days are numbered. When rumors emerged in 2007 that the Chronicle would shift entirely to its online SFGate.com, I purchased the domain name “Beyond Gate.” But I did not renew the registration. I realized that the Chronicle faced two insurmountable problems that would prevent its success in any format. First, its model for delivering news is no longer economically viable. Second, its management is so out of touch with its potential customer base that declining circulation and advertising revenue will continue. Despite my differences with the paper’s editorial direction, I am saddened that so many hard-working and quality journalists, as well as longtime blue-collar production workers, could soon be out of work. But the Chronicle’s impact on Bay Area life has greatly diminished, and much of its value will be replaced by other formats.

Bargaining Strategy or Signal of Demise?

Is the Chronicle is really losing $50 million annually? The Hearst Corporation is a private entity that does not produce public financial statements. Many believe the paper’s announcement of a possible shutdown is simply a bargaining strategy, designed to force the Teamsters union in particular to accept major contract givebacks.

Those questioning the paper’s threat also note that new production machinery comes on line in June. Why, they ask, would the Chronicle shutdown soon after investing millions in such equipment?

Well, one answer is that Chronicle management did not anticipate our current financial freefall when they made this investment. And the paper’s slimmed-down look, declining advertising, and independently verified circulation losses makes its claimed $50 million annual deficit quite believable.

Nor is the Chronicle the only newspaper in deep financial trouble. Rocky Mountain News produced its last edition last week, after over a century serving Denver, and the Hearst Corporation will soon close the Seattle Post-Intelligencer.

The Hearsts are clearly tired of losing money in the newspaper business, and shutting down the Chronicle is likely next.

An Economically Unsupportable Model

For all of the widely discussed reasons – the rise of 24-hour Cable News, the Internet, and the cellphone, Ipod and other instantly available communication devices – daily newspapers will never regain pre-2000 circulation or advertising revenue.

Corporate control of once family-run newspapers has certainly expedited this trend. For example, had Sam Zell not purchased the Tribune Company in a highly leveraged deal that loaded Tribune newspapers with insurmountable debt, the once highly regarded Los Angeles Times would not be engaged in ongoing and massive layoffs and downsizing.

Since at least 2000, the San Francisco Chronicle and other Republican-owned newspapers had a choice in responding to the structural challenges facing their industry: they could follow the Herbert Hoover / George W. Bush approach of “staying the course,” or the Roosevelt / Obama strategy of changing direction to chart a better future.

Not surprisingly, they chose the former.

Despite operating in an era when people can get all the news they need for free by clicking on the Internet, the Chronicle’s product has remained remarkably unchanged. While General Motors and other U.S. car companies are routinely criticized for not changing with the times, it is the American newspaper that has largely resisted the overhauls necessary to maintain circulation and advertising revenue in the Internet age.

The Chronicle Ignores its Customer Base

In the Chronicle’s case, added to these structural factors is the company’s ignoring, and even consciously alienating, its potential customer base. No business can survive under such an approach, and it has left the Chronicle with less brand loyalty than the vast majority of daily papers.

I started Beyond Chron after the paper’s extraordinarily biased reportage during the Gavin Newsom-Matt Gonzalez San Francisco mayoral runoff in December 2003. I had no problem with the paper strongly backing Newsom, but was very troubled by the way in which the paper’s editorial slant shaped its news stories. leaving the pre-election The Chronicle’s Sunday pre-election edition read more like Newsom campaign literature than as a product of an ostensibly “objective” news gathering process.

Although San Francisco was almost evenly split between the two candidates, the Chronicle’s unbalanced coverage deeply alienated Gonzalez voters. And these younger, ethnically diverse San Franciscans stopped paying for a paper that mocked, ignored, and acted condescendingly toward them and their vision of the world.

Unrepresentative Columnists

The Chronicle remains so uninterested in attracting readers that its stable of columnists includes no Asian-Americans or Latinos. Nor anyone regularly expressing opinions on local issues that reflect San Francisco’s large, and perhaps majority, progressive community.

Think what this means. The Chronicle’s geographic base includes the most progressive voters in the nation, but the paper does not have any columnist who takes progressive stands on local issues.

While the Chronicle publishes nationally syndicated progressive columnists, their appearance in the Chronicle has no political impact.

Progressive columnists would have their greatest impact addressing local issues, such as the land use and tenant-related matters where the Chronicle editorial board mimics the positions of the Chamber of Commerce and Board of Realtors. But the paper has never employed a single columnist whose regular beat provided a progressive analysis on local politics.

The Chronicle’s top management has ignored their progressive customer base even at the cost of declining circulation and advertising revenue. It’s no wonder that so few progressive Bay Area are devoted to the Chronicle; it’s editorial and news content is more fitting for Contra Costa County than the nation’s most progressive, diverse and creative customer base.

Will The Chronicle Be Missed?

Even if the paper weathers its current financial crisis, the Chronicle’s demise is only a matter of time. Since the Chronicle has long set the agenda for the area’s radio and television news, and remains the region’s most widely read news source, will the paper be missed?

Sadly, not as much as regular readers of the paper would like to believe. Here’s why.

First, so many people have given up on the paper that its influence has already waned. Due to declining circulation and its strong anti-progressive bias, the Chronicle rarely sparks political action in the way it did in the Feinstein-Agnos-Jordan pre-Internet era.

Second, while the Chronicle’s “local news” coverage is absent from the New York Times, my experience running Beyond Chron for nearly five years shows that the number of people closely following local San Francisco politics is much smaller than insiders think (which is why nearly half of our content is national and state issues).

Public hearings are accessible on the Internet, other media will cover mayoral press conferences, the Chronicle doesn’t cover many activist events anyway, and the “political insider” gossipers will find new sources to leak information.

I remember when nearly everyone thought that San Francisco would be terribly impacted by the loss of first the SF Progress and then The Independent, which were thrice weekly local news focused newspapers delivered door to door. Today, they are not missed, as what these papers once offered is available in through e-mail and the Internet.

The Chronicle’s biggest impact on the Bay Area, and this is no small matter, is as a validator. When one is quoted or discussed in the Chronicle, or a story about one’s group or cause appears in its pages, it validates the person or cause in a way unsurpassed by any other local news source.

To put it another way, if a group does a press event and its not covered in the Chronicle the next day, there is disappointment. Chronicle coverage alone makes a media event a success, and even radio or television coverage on such widely heard outlets as KCBS, KGO-TV and KTVU-TV does not make a story as widely known in San Francisco as when it appears in the Chronicle.

Of course, the Chronicle’s role in publicly validating what’s important has been a two-edged sword, with progressive activists and causes often “invalidated” while more moderate and corporate interests are more likely to get the paper’s attention. But it is sad to lose the paper’s wide net, particularly when after the Chronicle-Examiner merger, even many cynical reporters thought that the Bay Area would finally have the resources to produce a great local newspaper.

More Tuesday: Are iTunes the Future Model for Newspapers?/b>

Randy Shaw is the founder and editor of Beyond Chron