The Post-Gazette said today it is prepared to put the 220-year-old paper up for sale if it fails to reach cost-cutting labor agreements with its labor unions by Dec. 31.

The paper cited accelerating operating losses, including nearly a $12 million loss through August.

"Pittsburgh [Post-Gazette] has serious problems and they get worse with each passing day," said marketing director Tracey DeAngelo. "The paper's not on the selling block. The goal here is to reach labor agreements by Dec. 31 and keep the newspaper under current ownership."

The newspaper is owned by Toledo-based Block Communications. Its five-year contracts with 14 unions representing 954 full-time and 172 part-time employees expire Dec. 31. The Post-Gazette submitted a contract proposal to union leadership in March and has not received a substantive response, Ms. DeAngelo said.

The announcement comes as negotiations between Block and The Toledo Blade, The Post-Gazette's sister paper, are deadlocked. On a national scale, newspapers are under increasing pressure as readers and advertisers spend more of their time and dollars on the Internet. While newspapers have begun to tap the Internet as a revenue source, those fledgling ventures have not been able to offset the slide in circulation and advertising revenue.

The industry's woes were evident in June, when dissident investors forced the sale of Knight Ridder, the nation's second largest newspaper chain, to The McClatchy Co. for $6.1 billion sale.

Post-Gazette unions were told of the Dec. 31 deadline in an Aug. 31 letter.

"I really don't understand where they're going. Wherever they're getting their advice, it's not good," said Joe Pass, the attorney representing the Unity Council representing the PG unions. "We've told them from the beginning we'll give them everything they need."

In 2004, union workers agreed to modify the current contract to create $3.5 million in savings. The concessions included forgoing a $10 a week raise and taking on a $10 increase in drug co-pays.

Mr. Pass said the company is insisting on policy changes that would give management too much discretion over what union workers could and couldn't do. The company's proposals include the power to order workers to cross picket lines of other unions.

"There's certain things we have principles on, that being one of them," Mr. Pass said. "They want a blank check."

The Post-Gazette wants a contract that would significantly reduce operating costs, reduce the staff and provide more flexible work rules, Ms. DeAngelo said. She declined to put a dollar figure on the savings the company is seeking.

The unions have not threatened to strike.

Union contracts carry specific dates when bargaining must begin, and Ms. DeAngelo said she was not aware of any unions refusing to go to the table when required. Most are required to begin talks by the fall.

Ms. DeAngelo also acknowledged revenue has declined because of such changes as the loss of Kaufmann's department store advertising. She said the company would be trying new strategies to increase revenue but couldn't disclose them.

The Post-Gazette, Western Pennsylvania's largest daily newspaper, has suffered operating losses of $23 million since 2003 and is on track to report a record loss this year, the company said in a prepared statement. The paper has operated at a net loss since it acquired The Pittsburgh Press in 1992 and resumed publication after a seven-month strike, Ms. DeAngelo said. Including this year, the paper is on track to post operating losses in seven of the past 14 years.

Over the same period, daily circulation declined 6 percent to 235,901 while Sunday circulation fell 13 percent to 398,011. The trend does not reflect the impact of the 1992 strike: when it resumed publication, The Post-Gazette had about 20 percent fewer readers than the papers had before the strike. Ms. DeAngelo said advertising revenue fell 2 percent last year and was off 4 percent in the first eight months of this year.

Block also has interests in cable television and television broadcasting. The company used to file financial reports with the Securities and Exchange Commission but is no longer required to do that. The company's last quarterly filing indicated it lost $15.7 million in the first nine months of last year on revenue of $322.4 million.

Some interpret the threatened sale as a bargaining ploy designed to bring unions to the bargaining table.

"I think this message is more for you than it is for me," said Ralph Martin, president of The Tribune-Review, the Post-Gazette's major competitor.

As to whether Tribune-Review owner Richard Scaife would be interested in purchasing his larger rival if it was available, Mr. Martin said: "I'm working for a guy who really believes there should be two newspapers in Pittsburgh."

Block's contracts with unions in Toledo expired in March. Last month, the company began locking out some union workers in an effort to break the deadlock. About a third of The Blade's 600 workers have been prevented from working. Unions have responded by asking readers to cancel their subscriptions and advertisers to boycott.

More details in tomorrow's Pittsburgh Post-Gazette.