San Francisco Newspaper Saga Gets New Player : Media: James Hale is named to head the troubled agency that runs the non-editorial operations of the Chronicle and the Examiner.

This city’s two newspapers, which for generations have covered San Francisco’s quirky goings-on, are embroiled in a soap opera of their own.

On Monday, the latest chapter unfolded when the money-losing morning Chronicle and evening Examiner named a veteran newspaper editor and publisher to be president and chief executive of the agency that oversees their non-editorial operations.

James H. Hale, 65, came out of semi-retirement to take the top posts at the San Francisco Newspaper Agency. He succeeded Robert McCormick, who resigned Friday along with three other top officers at the organization, which runs the papers’ advertising, production and distribution operations.

Hale, sporting a lilac and white striped shirt with navy and silverstriped bow tie, said his goal is to get the newspapers’ owners to “carry on a lot of dialogue.”

“I really had planned not ever to work again,” he said in a brief lunchtime interview at his new desk in the agency’s downtown office. “If it’s not going to be pleasant and fun, I’d rather be raising a coop of chickens someplace.”

The 2,100-employee agency that he is heading is an inefficient bureaucracy that has drained profits from both newspapers, critics say.

“They (the owners) would like for it to generate more cash,” Hale acknowledged. “There seemed not to be a great deal of communication between the owners.”

Indeed, observers have said that officials at the Chronicle and the Examiner, who have equal say in all matters at the jointly owned agency, often lock horns on key business decisions. Hale’s role will be to make the operation more efficient and productive, executives of both companies said.

“The agency got fat and bureaucratic . . . and the Chronicle was losing money because the agency was sucking it all up,” said Richard Rapaport, a San Francisco journalist who has written extensively about the city’s newspaper battles.

Both papers, in fact, have been losing money despite their affluent market. The problems, Rapaport and others say, stem from management miscalculations, fierce competition from suburban newspapers and the agency’s high costs.

The changes at the agency follow a shake-up in the upper echelons of the Chronicle, the city’s dominant newspaper. It recently installed its first outsider chief executive in its 128-year history as a family-owned, family-run media empire.

A Texas native with a king-size drawl, Hale retired in December as chairman of Kansas City Star Co. and publisher of the Kansas City Star. He has since served as an adviser to that newspaper.

Before that, he was general manager and chief executive of the Fort Worth Star-Telegram. Both the Kansas City and Fort Worth newspapers are owned by Capital Cities/ABC Inc., a New York-based media conglomerate. He began his career at the Texarkana Gazette in Texas and has also worked at the Laredo Times in Texas and the Clearwater Sun in Florida.

In his new role, he will report to John B. Sias, a former Cap Cities executive who was recently named president and chief executive of Chronicle Publishing Co., and Robert J. Danzig, vice president and general manager of the newspaper division at New York-based Hearst Corp., which owns the Examiner. Both are longtime friends and associates of Hale.

Sias, 66, ran the publishing division of Capital Cities from 1971 to 1986 and has known Hale since 1975. A former executive vice president of Capital Cities/ABC and president of the ABC-TV network, Sias was named to his posts at Chronicle Publishing in April.

He recently told Chronicle staff members that the Chronicle is losing “a few million” dollars annually, whereas the Examiner’s losses are less because of its smaller staff. The Chronicle has 393 employees and the Examiner has 225.

The agency was created to oversee the papers’ business operations as part of a 1965 joint operating agreement between the Chronicle and the Examiner. At the time, the papers were engaged in a bruising circulation battle that threatened the existence of both. The newspapers’ editorial staffs remain separate.

The JOA, originally set to expire in 1995, was recently extended through September, 2005, but it could be dissolved by mutual agreement.

Chronicle Publishing, estimated to be worth at least $1 billion, controls three TV stations, including KRON-TV, an NBC affiliate in San Francisco; a book publishing unit; the flagship San Francisco Chronicle, and daily newspapers in Bloomington, Ill., and Worcester, Mass. The Chronicle, a newspaper with a reputation for quirkiness that is home to columnist Herb Caen, is the 10th-largest paper in the country, with daily circulation of about 564,000.

The Examiner has daily circulation of about 132,700. The papers publish the Sunday paper jointly under the Examiner’s banner, and it has circulation of more than 715,000.

In recent months, Chronicle Publishing has been reeling from a series of dramatic changes that have been orchestrated by some disgruntled family shareholders.

Sias replaced Richard T. Thieriot, 51, as chief executive. Thieriot (pronounced TEER-ee-uht), a great-grandson of Michael H. de Young, a wealthy San Franciscan who founded the Chronicle, left the post last October after 17 years.

He and other relatives in top positions at Chronicle Publishing have been ousted in recent months. They include:

* Peter Thieriot, Richard’s cousin, who headed the company’s newspaper operations other than the Chronicle.

* Charles Thieriot, Richard’s brother, who resigned May 28 as head of Western Communications, the cable TV subsidiary.

* Francis Martin, another great-grandchild of de Young, who left Chronicle Broadcasting in March.

During Hale’s tenure at the Kansas City Star, the newspaper won three Pulitzer prizes and succeeded in weakening organized labor’s influence in the newspaper’s production side.