96 hours have now passed since Hearst gave the P-I 60 days to live. And as I’m one to think, I’ve spent a lot of time dissecting what is happening and trying to piece together what is to come. We once had two strong regional papers, and now both of them could be extinct altogether by the end of the year.

I decided to start parsing together my thoughts into a post, but 1100 words into it I realized how huge and unwieldly it was becoming, so I’m breaking it down into smaller chunks for the sake of my sanity (and yours as well).

There’s Nothing More We Can Do

Right now, there seem to be only two kinds of people who are excited about the death of the P-I: Lockstep conservatives, and those who have been salivating at the possibility we could see an online newspaper.

The debate’s swirling around whether this even makes sense. You have the optimism of Bill Richards and the fingers-in-the-ears headshaking of Peter Kafka. And you have the plans, notably Todd Bishop’s ten step plan for saving the P-I.

Bishop’s plan has three fatal flaws. It assumes that angel investors will come in and shower Hearst with money (which makes as much sense as WaMu getting bought out when every bank knew they could have it for nothing when the FDIC seized it). It assumes a Dotcom Bubble startup mentality that spends cash first (on high-priced tech consultants) and seeks profitability later, an idea that died with the Dotcom Bust. And lastly, it seems to imply that the P-I exists to find voices in the community, not stories (that is, the P-I should be vetting bloggers to promote their stories, not listening to blogs — i.e. their readers — to find and promote their stories.)

In the Bishop vision of the world, you have maybe two years of paying P-I writers to write as if nothing ever really changed when they stopped printing. After that, the plug gets pulled, and we’re back to deciding whether to read the three articles (and 36,000 escort service ads) in this week’s Stranger, or read whatever is in Real Change this week.

On the other hand, Kafka keeps missing the point, too.

Quantcast pegs the paper’s traffic at 2.6 million uniques. That would keep a blog with a handful of writers and editors afloat–if it had a specific niche, like, say technology news. And if it had a national audience to sell to advertisers. But a generalized news site for a local audience? No one’s figured out how to do it yet, and a recession probably isn’t the time to solve that riddle.

Problem #1 with his line of thinking is that people have figured it out. They’re called neighborhood bloggers. And problem #2 is that a recession is the right time to solve, or refine the answer to, the riddle. Hearst lost $14M last year on the P-I. Running an online paper isn’t going to cost $14M a year, not unless Todd Bishop or Peter Kafka are running it.

Maybe Hearst would be better off shutting the P-I down entirely, but then they’re abandoning a market where they rule the online news space, a market that already reads the newspaper online (2.6M uniques vs. 100,000 print subscribers) and a market that is primed for an online-only paper (if it’s done right). And even though online ad revenue is dropping, 3-5 years from now that will more than likely not be true.

But take a step back for a second. 100,000 print subscribers. 2.6M online visitors a month (on 40M page views). A joint operating agreement that is still tilted in the Seattle Times’ favor. The paper’s total assets amount to the big spinning globe and its talent pool.

The print version of the Post-Intelligencer is terminal. The P-I as we know it cannot survive. I’m sorry, but there’s nothing more we can do. There will be no angel investors to save it, because even if Kafka’s right and there’s no online business model to sustain it even at a greatly reduced level, the current business model is less than sustainable, too. Only a venture capitalist with both a deep passion for news and the willingness to take the long view would be willing to take this project on, and I’m sorry, that’s not Paul Allen.

So, what to do? And what happens next? And what should the writers do? I’ll start addressing those questions in Part II.