Weakening the Competition 

The Chronicle helps purchase its competitors and thus makes its own life easier.

Dirty fighters know the best time to kick an enemy is when he's down. Cold-blooded killers even know how to make money off the fight.

Hearst Corporation, the company that owns the San Francisco Chronicle, became that kind of economic hit man this May. It paid the Denver-based MediaNews Group $263 million to help finance the purchase of the Chronicle's sworn editorial enemies at the San Jose Mercury News and the Contra Costa Times.

People looking for explanations of why Hearst would get into bed with its own competition had little information to work with. Hearst had no comment on the subject for its own reporters and management, much less for this article, making official answers scarce. The New York Times quoted industry analysts as noting that Hearst had long sought an interest in Dean Singleton's financially disciplined MediaNews operation.

But the real answers seem obvious enough. Helping MediaNews buy the Contra Costa Times and the Mercury News actually weakens its competition. Hearst Corporation — a huge, vertically integrated multimedia conglomerate based in New York — can expect less editorial competition and even some financial kickbacks from MediaNews now that it's part of the company's family of investors.

Of course, MediaNews has no stated intention of gutting staffs and bleeding the Chronicle's enemies dry. But history suggests it may just be a matter of time. MediaNews — which owns the once-mighty Oakland Tribune and a bunch of low-budget suburban dailies in the region — saved the Trib by gutting it. But since its new acquisitions are both moneymakers that don't need saving, all that's left in this case is the gutting.

Luther Jackson, executive officer of the San Jose Newspaper Guild, said the Hearst deal surprised even insiders. "It took us totally by surprise," he said. "It's like some media moguls got together in a room and carved up the Bay Area." Jackson is worried that MediaNews could hurt the regional news market through money-saving plans such as "clustering" — which enables the company to eliminate now-redundant jobs. "We have concerns about clustering and the less-than-respectful treatment of employees in the past," he said. "It's hard to say what they'll do."

Five local Democratic representatives now want a serious antitrust inquiry into the matter at the federal and state levels, and have submitted a letter to the US Department of Justice and the California Attorney General's Office expressing concern that "this transfer could diminish the quality and depth of news coverage in the Bay Area of more than nine million people."

The Department of Justice and the Attorney General's office confirm that antitrust inquiries are ongoing, but no date has been set for the inquiry's end, nor will they provide any information as to the seriousness of the inquiry.

The lead spokeswoman for the congressional effort, Democratic Representative Zoe Lofgren of San Jose, said the attorney general may be able to do something, but doubts that the Department of Justice will intercede. "The DOJ is not very responsive to me or other members of Congress," she said. "Lots of times I send them letters and they don't answer. They have really fallen short in their antitrust cases."

In the absence of any serious DOJ or AG beef, only the protests of Hearst itself might have been sufficient to slow this deal down. And now that's not going to happen either.

The deal is scheduled to close by the end of summer, and barring some eleventh-hour snafu, Hearst will have pulled off one of the more cunning and vicious Bay Area business moves of 2006 right under the noses of hundreds of its own journalists. By helping finance the selling of an opponent to a group known for its tepid work, Hearst will have purchased editorial dominion over the region, and secured a cut of MediaNews profits into the future.

According to the mission statement of its own San Francisco paper: "The San Francisco Chronicle is committed to not only providing award-winning journalism, but also serving the Bay Area as an active and involved corporate citizen."

The Bay Area got served, indeed.


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