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DOJ to review MediaNews-Hearst plans

Lost in the hubbub over last week’s acquisition by Dean Singleton’s (pictured) MediaNews of the Contra Costa Times and Mercury News was the arrangement Hearst Corp. has struck with MediaNews over the Monterey Herald and St. Paul (Minn.) Pioneer Press. Hearst bought the Hearld and Press last week for $263 million, but then turned over management of the papers to MediaNews.

Critics say that any arrangement between MediaNews and Hearst would result in less competition in the Bay Area media market since Hearst owns the Chronicle and MediaNews owns the 11 other major dailies in the region. MediaNews has denied the claim. The U.S. Department of Justice’s antitrust division have yet to examine the Hearst-MediaNews deal.

As the PPC reported last week, a deal announced in April in which Hearst would buy the Hearld and Press and give them to MediaNews in exchange for stock in MediaNews’s non-California operations was quietly dropped. The deal was dropped as the deadline for the DOJ to approve the Merc and Coco Times sale was approaching.

In its statement announcing approval of the Merc-Coco Times sale, the DOJ specifically pointed out that it did not address the Hearst-MediaNews deal. “If and when any such arrangement is proposed, the division will investigate whether it would adversely affect competition,” the DOJ statement said.

Eve Mitchell, a business writer at the MediaNews-owned Oakland Tribune, reported Aug. 2 that “plans call for Hearst to turn over the St. Paul and Monterey papers, which are now being managed by MediaNews, to MediaNews within 30 to 60 days in exchange for an equity stake in MediaNews assets outside the Bay Area.”

Clint Reilly, the San Francisco political powerbroker who unsuccessfully sought a temporary restraining order to halt last week’s sale, will fight any alliance between MediaNews and Hearst, according to comments his attorney made to the San Francisco Bay Guardian. Referring to the judge who turned down the TRO, attorney Joe Alioto said: “She said that when the agreement with Hearst is finalized, we can come back and file for another injunction, which is exactly what we will do.”

In his filing seeking a TRO, Alioto wrote: “Hearst cannot expect this court or anyone else to believe that it is shelling out $263,200,000 simply to buy and deliver the Monterey Herald to its Bay Area competitors to gain an interest in its competitors’ markets outside the Bay Area, without receiving any assurance or reaching any understanding that it will be protected against future competition in the Bay Area from its new partners. Such a claim strains credibility to say the least.”

Meanwhile in Minnesota, the Pioneer Press is reporting that employees there are surprised Hearst continues to own their newspaper. “I thought from the way this thing has been pitched that it would be a momentary sort of a thing,” Bill Weyandt, a Pioneer Press advertising systems technician, told Press reporter John Welbes. “It just adds a new wrinkle to the uncertainty we’ve been living with for, what, six months?”

[Ken Garcia: Sale marks sad day in Bay Area]

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