Newspaper industry analyst capitalist and former Chronicle assistant managing editor Alan Mutter says the big loser in the MediaNews bankruptcy will be Chronicle owner Hearst Corp., which had $317 million in MNG since 2006:

Hearst improbably put money into MediaNews, its direct competitor in northern California, in the hopes of reversing the almost continuous loses it has suffered since stepping up to buy the Chronicle in 2000. Instead of fixing the long-festering problem, Hearst became not just the biggest loser among the equity investors in MediaNews. It will be the only one.

Neither MediaNews chief Dean Singleton nor his long-time business partner Richard B. Scudder will lose a nickel in the bankruptcy, because neither ever put any of his own money into the company, said a MediaNews spokesman. But they aren’t unscathed. Each of the MediaNews founders will suffer the complete loss of paper gains that at one point theoretically were worth as much as $500 million per man.

Mutter goes on to say that Hearst decided to help MediaNews in the hopes that they together could enter into some sort of operating partnership to staunch the losses Hearst was continuing to fund at the Chronicle. That was thwarted by an antitrust lawsuit filed by San Francisco real estate developer Clint Reilly.

Last March, the Chron’s Phil Bronstein and Hearst lawyer Eve Burton apparently convinced Speaker Nancy Pelosi to ask the Obama administration’s Justice Department to loosen up on its antitrust rules for newspapers, paving the way for a Chronicle-MNG merger. But Attorney General Eric Holder threw cold water on the idea and has shown no public signs of changing his mind.