Magazine article Editor & Publisher

UPDATE: War of Words Heats Up over Reilly/MediaNews/Hearst Settlement

Magazine article Editor & Publisher

UPDATE: War of Words Heats Up over Reilly/MediaNews/Hearst Settlement

Article excerpt

There are a lot of unsettled feelings this weekend about the settlement that ended San Francisco businessman Clint Reilly's lawsuit alleging MediaNews Group and Hearst Corp., publisher of the San Francisco Chronicle, were trying to monopolize the Bay Area newspaper market.

Friday, MediaNews Group President Jody Lodovic accused Reilly attorney Joe Alioto of misrepresenting terms of the settlement -- and said the Denver-based chain was "strongly considering" suing him for breaching confidentiality terms of the agreement.

Saturday, an angry Alioto fired back, telling E&P that it's MediaNews that is spinning the agreement for its own internal political reasons.

"I want to be very clear that I'm very upset about how Dean (MediaNews CEO William Dean Singleton) and Lodovic have reacted about that," Alioto said. " Any effort by Jody to sue -- I hope he does, because then I'll end up with his MediaNews stock, I can promise that."

The brouhaha began with comments Alioto made to E&P Wednesday, on the day the settlement was announced. Alioto said the settlement would preserve smaller MediaNews-owned dailies in the Bay Area that he said were otherwise "headed for the graveyard."

"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 told E&P Wednesday. "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."

Friday, Lodovic called that "the most absurd comment I've every heard in my life."

He added, "The bottom line is there's no basis for him to comment on the viability of these newspapers in the Bay Area."

Saturday, Alioto repeated his argument that the settlement was key to the survival of the smaller papers. The original goal of the lawsuit was to unwind the sales and trades among The McClatchy Co., Hearst and MediaNews that gave MediaNews ownership of two big former Knight Ridder Bay Area dailies, the San Jose Mercury News and the Contra Costa Times. Joining those two papers with other MediaNews Bay Area dailies was fundamental to keeping the smaller papers competitive, Alioto said.

"I wasn't trying to suggest, and I wouldn't try to suggest, those papers are going to be closed up," Alioto said. "The very reason we stopped where we did was (so) ... that couldn't happen."

Lodovic said Alioto also had "overstated the things that Reilly gets, and he keeps saying things that are not in the settlement."

Alioto said his comments were completely appropriate under terms of the settlement allowing "general" discussion of the agreement.

"There's no question," he said, "that Mr. Reilly and I myself did not make any misrepresentations at all. Period. And we didn't and we wouldn't. They had told us there wouldn't be any more discussion. As far as I'm concerned, they opened it up."

MediaNews, citing Alioto's remarks at a news conference earlier in the week, on Friday released parts of the settlement agreement, and appended statements asserting that "nothing in the settlement terms deviates from normal policies already in existence."

Baloney, Alioto said Saturday: "The notion that they're trying to suggest, that there's nothing new here is absolutely a joke."

Here are the claims and counter-claims about the key elements of the settlement:

Newspaper editorial board participation

Lodovic said Alioto is wrong -- and in breach of the confidentiality terms of the agreement -- to say that Reilly has the right to sit on the editorial board any California Newspaper Partnership (CNP) newspaper he chooses.

Reilly cannot sit on the editorial board any paper he chooses, Lodovic said, only on a paper whose editor agrees it is okay. Similarly, while the settlement allows Reilly to "recommend" a private citizens to sit on the editorial boards of every CNP paper, the editors do not necessarily have to pick the recommended candidate, and can appoint someone else, he said. …

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