The Pittsburgh Post-Gazette said yesterday it is prepared to put the 220-year-old paper up for sale if current labor negotiations do not produce significant cost savings, including job reductions and work-rule changes.

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Union leaders responded with anger and amazement, saying the paper appears more intent on breaking the unions than putting Western Pennsylvania's largest daily on sounder financial footing.

But marketing director Tracey DeAngelo said the goal remains reaching labor agreements by Dec. 31 and keeping the newspaper under current ownership. While the Post-Gazette "has serious problems and they get worse with each passing day," it's "not on the selling block,'' she said.

The Post-Gazette has suffered net losses every year since acquiring The Pittsburgh Press in late 1992, Ms. DeAngelo said, and operating losses in seven of those 14 years. Those operating losses have totaled $23 million since 2003, including nearly $12 million the first eight months of 2006, which is headed for a record loss, said President David Beihoff.

"We are committed to resolving these financial issues in the best interests of the Post-Gazette, our employees, our readers, our advertisers and the entire community,'' Mr. Beihoff said.

The newspaper is owned by Toledo, Ohio-based Block Communications. Its five-year contracts with 14 unions representing 954 full-time and 172 part-time employees expire Dec. 31.

Joseph A. Molinero, who heads the unions' Unity Council, said the unions offered to accept major concessions more than a year ago.

"I'm sure [late Post-Gazette publisher] Bill Block [Sr.] is turning over in his grave when he sees this happening to his papers," Mr. Molinero said. "It's so bizarre that we're at this position at this point in time after all the things we promised to do."

Mr. Molinero noted that unions agreed to $3.5 million in concessions in 2004 even though they were under no obligation to do so.

The announcement comes as negotiations between Block and the Toledo Blade, the Post-Gazette's sister paper, are deadlocked.

The Blade has locked out about 220 of the paper's 600 union workers and hired replacement workers, prompting unions to ask readers and advertisers to boycott the paper. 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 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. Knight Ridder was profitable, just not profitable enough to satisfy stockholders led by Private Capital Management. The Naples., Fla., institutional investor placed major bets on slumping newspaper stocks and lost, then pressured Knight Ridder into the sale.

Since resuming publication after the 1992 strike, the Post-Gazette's daily circulation has declined 6 percent to 235,901 while Sunday circulation is off 13 percent to 398,011. The trend does not reflect the strike's impact: when it resumed publication, the Post-Gazette had about 20 percent fewer readers than the two papers had before the strike.

Advertising revenues also have been falling, slipping 2 percent last year and 4 percent so far this year.

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 Unity Council attorney Joe Pass. "We've told them from the beginning we'll give them everything they need."

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.

But Mr. Beihoff said the unions "must be willing to negotiate new contracts that would restructure the Post-Gazette to lower costs significantly, streamline staff and change existing work rules that currently inflate staffing and compromise efficiencies.''

Ms. DeAngelo declined to put a dollar figure on the savings the company is seeking.

Threats to hire replacement workers or take other drastic measures are common in negotiations as each side attempts to gain an upper hand, including winning the battle of public opinion.

But talk of a sale, coming against the backdrop of Knight Ridder's demise and McClatchy's subsequent sale of several Knight Ridder papers, raises concerns -- as well as the question of who would buy a newspaper in a town many industry observers consider too small to support two newspapers.

One potential buyer could be The Tribune-Review, the Post-Gazette's major competitor and a major beneficiary of the 1992 strike. Tribune-Review President Ralph Martin said: "I'm working for a guy [Trib owner Richard Scaife] who really believes there should be two newspapers in Pittsburgh."

Mr. Martin believes the Blocks' salvo yesterday was more of a bargaining ploy than a genuine expression of interest in selling the paper.

"I think this message is more for you than it is for me," Mr. Martin told a Post-Gazette reporter.

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. Operating losses totalled $4.1 million, including a $10.4 million operating loss for its publishing segment.

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.

Blade spokeswoman Luann Sharp said negotiations with four unions are scheduled for Sept. 25.

"I think that's a good sign," she said.