Magazine article Editor & Publisher

Reilly Lawyer: Deal Keeps Alive Bay Area Papers 'Headed for Graveyard'

Magazine article Editor & Publisher

Reilly Lawyer: Deal Keeps Alive Bay Area Papers 'Headed for Graveyard'

Article excerpt

The Oakland Tribune, the Fremont Argus and other smaller San Francisco Bay Area dailies will "stay alive" only because of the settlement reached Wednesday, said the head lawyer for Clint Reilly, whose lawsuit had accused Hearst Corp. and MediaNews Group of scheming to monopolize the region's newspaper market.

"The smaller local papers will be able to survive now," Alioto told E&P in an interview after the settlement announcement.

"The Oakland Tribune, the Fremont Argus, San Mateo (County Times), (The Daily Review in) Hayward, Novato (Marin Independent Journal) -- all of those papers were heading for the graveyard," Alioto added. "There was pretty strong evidence those papers were going to go out. By reason of our agreement, I think, they'll stay alive, at least for three years."

Under the settlement, Hearst, which publishes the San Francisco Chronicle, and MediaNews agreed not to collaborate on national advertising, Internet advertising, sales, distribution or production in the Bay Area, Alioto said.

A Hearst statement said the settlement mandates "certain changes" in the complex Bay Area deal between Hearst and MediaNews. Hearst said the two chains "had already decided to make most of these changes during the course of the Hart-Scott-Rodino review by the Department of Justice. The changes have no material effect on Hearst's investment in the non-Bay Area assets of MediaNews Group."

The settlement also rescinds Hearst's right to convert its interest in MediaNews properties outside the Bay Area into a direct investment in the Denver-based company.

"Those are the two things that really kind of stop the creation of the monopoly they were trying to implement," Alioto said.

In an interview, Daniel M. Wall, an attorney for Hearst at Latham & Watkins in San Francisco, said Hearst and MediaNews Group went along with a "number of changes we were going to make anyway to deal with issues coming up -- not just in this case, but with the Department of Justice (DOJ)."

Wall said they agreed to table "indefinitely" strategies explored in an April 26 letter from Hearst to MediaNews Group.

He also pointed out that this settlement has nothing to do with the DOJ. But that he's "hopeful and optimistic" that because of the changes made, the DOJ will green light the transaction.

Reilly, a real estate developer who has been politically prominent in San Francisco, also gets a watchdog role in the settlement.

"If there are efforts to limit the number of reporters, we're going to be able to have something to say about that," Alioto said. …

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