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DOJ review delays finalization of local sales

The U.S. Department of Justice’s antitrust review of the MediaNews purchase of the San Jose Mercury News and Contra Costa Times will extend past the previously announced closing date for the sale. Knight Ridder plans to sell its 32 newspapers to McClatchy Co. on Tuesday, June 27. McClatchy then planned to sell the Merc and CCTimes, along with other papers, on the same day. McClatchy CEO Gary Pruitt said in March he was hoping for a “simultaneous closing.” But reporter Pete Carey of the Merc reports this afternoon (June 20) “That deal is still under antitrust review, and appears certain to run past next week’s sale date for all of Knight Ridder.”

That would suggest that McClatchy will own the Merc, CCTimes and other Knight Ridder assets in Northern California from next Tuesday until the MediaNews deal closes.

Carey reports, “The Justice Department is continuing to review MediaNews’ $1 billion plan to purchase the four papers, and is specifically looking at overlaps between the Contra Costa Times and MediaNews’ Tri-Valley Herald. It is also reviewing the involvement of Hearst in the MediaNews purchase, because Hearst owns the San Francisco Chronicle, which competes with MediaNews in the Bay Area. Hearst is spending $263 million for the Monterey County Herald and the St. Paul Pioneer Press, but will trade the two papers to MediaNews in exchange for a stake in MediaNews’ assets outside the Bay Area.”

Carey also reports that DOJ has cleared McClatchy’s sale of Knight Ridder, which was expected. McClatchy indicated it had DOJ approval in a June 14 in a press release. The one string the DOJ put on that approval was that McClatchy had to promise in writing that it would sell the St. Paul Pioneer Dispatch, since McClatchy owns Minneapolis Star Tribune, and owning both would apparently create an antitrust violation.

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