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Mercury News and Contra Costa Times sold to MediaNews

Newspaper chain would dominate Bay Area with more than 800,000 daily circulation, placing Hearst Corp.'s Chronicle a distant second; union voices concerns and urges government antitrust probe

Singleton's "Single Town" strategy: The San Jose Newspaper Guild constructed a map of the Bay Area showing the geographic reach of newspapers owned by the MediaNews if the sale of the Mercury News, Times and Herald is completed. The union is urging regulators to investigate the antitrust implications of the sale. Click here for an expanded view.
Also see the San Jose Mercury News' version of this graphic, showing the comparative sizes o the papers by circulation, as well as a national map showing MediaNews' holdings (both graphics in PDF format).

The San Jose Mercury News and the Contra Costa Times were sold by the McClatchy Co. to the MediaNews Group of Denver as part of a four-newspaper $1 billion deal announced Wednesday. The sale would lead to an unprecedented concentration of ownership in Bay Area newspapers.

The deal, which includes the planned transfer of the Monterey Herald and the St. Paul Pioneer Press to MediaNews in a complicated series of swaps with the Hearst Corp., would give MediaNews control of papers publishing more than 800,000 copies daily in the San Francisco Bay Area, when the free-circulation Daily News group is included.

The sale will give MediaNews dominance over the newspaper market in every county in the region but San Francisco.

The Alameda Newspaper Group includes nine Bay Area daily newspapers owned by MediaNews in the Bay Area, including the Oakland Tribune, the Daily Review in Hayward, the San Mateo County Times, the Fremont Argus, the Alameda Times-Star and the Tri-Valley Herald in Pleasanton. More peripherally the group includes the Marin Independent-Journal, the Vallejo Times-Herald and the Vacaville Reporter. (See: "How clustering works at ANG Newspapers," March 31.)

In addition to the Mercury News, the Times and the Monterey Herald, the deal would reportedly also transfer other smaller Bay Area papers to MediaNews, including the Palo Alto Daily News chain of free tabloids, a chain of weeklies called Silicon Valley Community Newspapers, and East Bay weeklies called the Hills Newspapers.

The San Jose Newspaper Guild's Web site features a map of the consolidated MediaNews empire that would result from the sale.

McClatchy acquired Knight Ridder Inc. in mid-March for $6.5 billion, including $2 billion in debt. McClatchy, whose papers include the Sacramento Bee and Minneapolis Star-Tribune, said it would divest 12 of the papers to reduce its debt load. The Mercury News, Times and Herald were among the papers McClatchy did not want to keep. Both rounds of sales have yet to be consummated.

Gannett, the nation's largest newspaper company, and another firm, the Stephens Company of Arkansas, would own minority stakes in the partnership that owns the papers changing hands.

Read the coverage in the San Jose Mercury News, the San Francisco Chronicle and the Los Angeles Times.

For more up-to-date news, follow the development via an updated search for MediaNews coverage on Google News.

Also read the McClatchy-MediaNews press release on the Mercury News Web site. In it, MediaNews Chief Executive William Dean Singleton is quoted saying the transfer is an "asset" sale. One consequence of such a sale is that he will have more freedom in his dealings with unions.

Mr. Singleton said in that statement that he was "delighted to acquire these fine newspapers and expand our reach in California" as well as St. Paul. "These were the newspapers that excited us the most about Knight Ridder, and we are pleased to have the opportunity to acquire them from McClatchy," he said.

The New York Times reported in its Thursday edition that Mr. Singleton, whose company would become the fourth-largest newspaper chain in the country, told editors at a meeting of the American Society of Newspaper Editors that "t was time to start giving consumers what they want, which was more entertainment news and 'less long series that we love to do but our readers hate to read.'"

The Associated Press reports that Mr. Singleton "makes people nervous" because of his history of acquiring newspapers and slashing jobs. The AP report noted:

After acquiring the Oakland Tribune in 1992, Singleton reportedly cut most of the paper's 600 jobs. And after paying about $150 million for the Houston Post, Singleton closed it in 1995, putting more than 1,000 people out of work.

California Attorney General Bill Lockyer released a statement on April 19 saying that his office "may take action" to prevent harm to the state's economy "where competitive choices could be narrowed for both advertisers and readers."

The federal Department of Justice last month also said it was investigating whether the sale of the Knight Ridder properties would violate antitrust laws. Experts said they doubted that the government would intervene because the newspapers being consolidated are not located in the same cities, but spread out over several contiguous counties.

The San Jose Newspaper Guild and its community allies issued an alarmed response on a Web site called Save the Merc, saying the deal "creates great uncertainty for the newspapers' subscribers, advertisers and employees."

"One out-of-state publisher would now control all daily newspapers in the Bay Area outside of San Francisco, with the capability of restricting news content, limiting voices of expression and dictating terms for advertising leading to higher rates," the statement read.

"We haven't given up yet," Luther Jackson, executive officer for the San Jose Guild's local told the Associated Press. "All the people we talk to in these communities want more news, not less."

The union had been working with the Yucaipa Companies to arrange a "worker-friendly" buyout of some or all of the papers, a deal that would include an option for employee stock ownership.

One union representative, Griff Palmer, database editor at the Mercury News, told the Washington Post that a meeting Wednesday with Singleton in the newspaper's office eased some concerns among the staff.

"He was not presenting himself as a slash and burn farmer," Palmer told the Post. "In many respects, he just sounded like a hard-nosed businessman."

 

Previous Grade the News coverage:


Reporters looking for a comment from Grade the News can contact project director John McManus at home (408-773-8711) or at work (408-924-3258); e-mail is jmcmanus (AT) gradethenews.org. They can reach associate director Michael Stoll at home (415-846-3983) or at work (408-924-3257); e-mail is mstoll (AT) gradethenews.org.

 

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A project of the School of Journalism and Mass Communications at San Jose State University, Grade the News is affiliated with the Graduate Program in Journalism at Stanford University and KTEH, public television in Silicon Valley.

Monitoring the Bay Area's most popular news media:

Contra Costa Times

Knight Ridder

San Francisco Chronicle

Hearst

San Jose Mercury News

Knight Ridder

KTVU, Oakland (FOX)

KTVU, Oakland (FOX)

KRON, San Francisco

KRON, San Francisco

KPIX, San Francisco (CBS)

KPIX, San Francisco (CBS)

KGO, San Francisco (ABC)

KGO, San Francisco (ABC)

KNTV, San Jose (NBC)

KNTV, San Jose (NBC)

 

Bay Area media advocates:

Media Alliance
Center for the Integration and Improvement of Journalism at SFSU
Maynard Institute
Youth Media Council
Project Censored
New California Media
Society of Professional Journalists, Northern California chapter
National Writers Union Bay Area chapter

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