The King 5 report was correct.

The Seattle P-I newspaper is being put up for sale. Steve Swartz, president of Hearst Newspaper Division, told the newsroom that Hearst Corp. is starting a 60-day process to find a buyer. If a buyer is not found, Swartz said, Hearst will pursue other options. The options include moving to a digital-only operation with a greatly reduced staff, or completely shutting down operations. In no case will Hearst continue to publish the P-I in printed form, Swartz said.

And, in no case will Hearst try to buy The Seattle Times:

Swartz said the company is not interested in attempting to purchase The Seattle Times.

The whole scenario seems a huge gift to Frank Blethen, whose flagship media property is now likely to lose its only direct print competitor, and whose reporters at The Seattle Times now no longer have to worry about being bought by their (former) rival, Hearst.

Also, in regard to the possibility that the P-I may go online only in the very likely event that Hearst can't find a buyer: I recommended pretty much exactly that course of action in March of 2006 in The Stranger.

Also II, to answer the comment questions about where Sam Machkovech's post about the Belo speculation went... I'd heard the same Belo rumor late last night, and checked it out this morning. The rumor that the sale of the P-I is linked to a Hearst Corporation plan to purchase the Belo Corporation is not true, according to Belo spokesman Paul Fry, who told me this morning that he'd already fielded several other calls on the subject. (According to the Belo rumor I'd heard, Hearst wanted Belo for its TV properties, which include King 5—which would explain how King 5 got the P-I sale scoop. In order for such a deal to go through, Hearst would have to get rid of the P-I because of federal cross-ownership rules that prohibit a company from owning a television station and a newspaper in the same market. But, again, according to the Belo Corportation: the rumor is not true.)