Hearst Adds Trucks and Presses to Newspaper Sale
By Kim Curtis/AP

Antitrust concerns from local, state and federal officials prompted the Hearst Corp. to sweeten the deal for potential buyers of the San Francisco Examiner, the newspaper’s publisher said.

Hearst is adding trucks, printing presses and other assets, along with the newspaper’s name and subscriber list, Examiner publisher Timothy O. White said last Tuesday.

In August, Hearst said it planned to buy its longtime rival, the morning San Francisco Chronicle, reportedly for $660 million, and to sell the Examiner. Terms of the deal, however, included only the Examiner’s name and goodwill, and not any physical assets needed to put out a paper. If no qualified buyer were found, Hearst said it would merge the two newspapers.

White said the original offer attracted no buyers.

“Whether this was seen as a phony offer or a sham. This should set those criticisms aside,’’ he said.

Buyers have until Feb. 15 to express interest.

The new offer includes all of the assets presently being used to produce and distribute the Examiner, including the paper’s downtown office and one of the three printing plants where the two newspapers are printed, White said.

White also reiterated that no employees would be laid off because of the possible sale, adding that employees not offered a job by the Examiner’s buyer would be hired at the Chronicle.

The Justice Department is continuing its investigation, spokeswoman Gina Talamona said last Tuesday. She declined comment on the new offer.

Stephen Barnett, a professor at the University of California’s Boalt Law School and expert on newspaper competition issues, said the change in terms “creates a more realistic chance of selling the Examiner.”

For the public, he said, “It means there is a chance of not only continuing to have two daily papers, but having two daily papers that really compete with each other.”

Since 1965, the papers have been subject to a joint operating agreement, employing separate news staffs and competing for stories, but sharing printing and business operations and profits. The San Francisco JOA expires in 2005, but last year the owners of Chronicle Publishing decided to sell the company’s assets.

Whether the JOA might be transferred to a new Examiner owner was not specifically addressed by Hearst. The Examiner reported Tuesday that the new terms did not include future participation in the JOA.

Tony Ridder, Knight Ridder’s chief executive officer, said in November he might be interested in buying the paper “if we could step into Hearst’s shoes and have the Examiner and their position in the JOA.”

Barnett said it’s quite unlikely Hearst would include the JOA in an Examiner offer.

“Clearly, they don’t want to have a JOA,” he said. “They’d rather have monopoly sales rather than share 50-50.”

Meanwhile, Hearst Corp., has been denying allegations in an antitrust lawsuit that its attempt to sell the afternoon newspaper was a sham intended to fail.

The lawsuit, filed by Clint Reilly, who ran unsuccessfully for mayor last November, accused Hearst of trying to monopolize the city’s daily newspaper market by acquiring the Examiner’s competitor, and sought a court order barring the sale. The company said in court papers it has found “little or no interest” in the sale of its own paper.

Reilly sued as a subscriber and a “potential advertiser” in both papers. The sale of the Chronicle, he argued, would deprive readers of “free and open competition in the sale of daily newspapers and their differing editorial and reportorial voices,” and would lead to increases in newspaper prices and advertising rates.

The city of San Francisco is also studying a possible antitrust suit to stop the reported sale. The Board of Supervisors voted Jan. 10 to urge the city attorney to consider a suit and report back in several weeks.

Bay City News contributed to this article.