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New details in Hearst-MediaNews deal

Hearst Corp., owner of the Chron, would become part owner of several competing Bay Area newspapers including the Mercury News and Contra Costa Times, according to court documents. The court documents were submitted by MediaNews, owner of the Merc and CCTimes, in a lawsuit brought by San Francisco businessman Clint Reilly, who is suing on antitrust grounds. The documents were reported in this morning’s CCTimes and other MediaNews papers in a story by George Avelos. Previous reports indicated that Hearst would own a 30 percent stake in MediaNews but would have no say over the management of the company’s Bay Area papers, presumably to avoid antitrust law violations. Avelos’ story echos a report earlier this week in the Bay Guardian, which said that Hearst will own a special class of MediaNews stock whose value would be based on non-Bay Area publications. But a sworn declaration by Hearst legal chief James Asher disclosed that “the tracking stock will be convertible into ordinary MediaNews Group common stock” under certain conditions. Hearst would then have part ownership of all of MediaNews’ operations, including those in the Bay Area. However, that can’t happen, he said, unless a new, separate deal took place and received approval from the U.S. Department of Justice.

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