In 2005, Hearst Corp. offered to sell the money-losing Chronicle to Dean Singleton’s MediaNews Group, but MediaNews didn’t offer enough money, according to newly unsealed federal court documents.
The documents were filed in the federal antitrust suit San Francisco businessman Clint Reilly has filed against the two newspaper companies. Bruce Brugmann’s Bay Guardian and the non-profit Media Alliance sued to have the documents released.
Perhaps the key document to be unsealed was the deposition of James Asher, Hearst’s chief legal and business development officer. He says that Hearst, as of September 2006, had recorded cumulative losses of $330 million on its investment in the Chronicle, which it acquired in mid-2000.
That’s a burn rate of about $1 million a week.
Asher said Hearst offered the paper to Singleton, but they couldn’t come to an agreement on the price. So, when Singleton bought the San Jose Mercury News and other Knight Ridder properties in the Bay Area last summer, the Chronicle agreed to put up $263.2 million to buy the St. Paul (Minn.) Pioneer Press and Monterey County Herald and conveyed them to MediaNews in exchange for a 30 percent stake in MediaNews’ non-Bay Area properties.