In its decision yesterday to approve MediaNews’ purchase of the San Jose Mercury News and Contra Costa Times, the Justice Department said it is not considering a proposal in which Hearst Corp. would have financed $263 million of the $1 billion deal. While the proposal to have Hearst invest in the deal had been announced publicly, MediaNews told the Justice Department that the deal has not yet been negotiated and, at this time, Hearst is not involved in the transaction. The Justice Department reported its antitrust division did not address that possible transaction, but stated, “If and when any such arrangement is proposed, the division will investigate whether it would adversely affect competition.”

When the deal was announced April 27, the Chronicle said: “The companies that are the dominant competitors in the Bay Area newspaper market now become partners. Antitrust laws limit the ways the companies will be able to cooperate locally, but the two sides could find ways to work together in some areas of their businesses. The moves could be an acknowledgement that a newspaper’s fundamental competition is not other newspapers, but instead other media.”