Newspaper cartelization gets well-deserved kick in the teeth

As Editor and Publisher reports, Hearst and MediaNews have gotten a federal smackdown, courtesy of a settled lawsuit, over their attempt to cartelize to monopolize Bay Area newspaper control.

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,” [lawyer] 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.

Of course, three years isn’t a lot. And Hearst is already spinning this deal.

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.”

Sure. Two newspaper companies this big wouldn’t have settled this lawsuit unless they knew it was highly likely they would lose.

And, it did block further metastasis of Big Media:

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.

Unfortunately, it didn’t reverse MediaNews’ purchase of former McClatchey papers in the Bay Area last year, the deal that started this whole MediaNews-Hearst cartel rolling:

The settlement does not give Reilly the thing he was asking the court to do: Unwind MediaNews’ complex $736 million purchase of the San Jose Mercury News and the Contra Costa Times. MediaNews bought the papers last June from The McClatchy Co., which acquired them as part of its acquisition of Knight Ridder Inc. Hearst also bought two former Knight Ridder papers, one in the Bay Area, the Monterey County Herald, and the other a competitor to the Minneapolis Star Tribune, then owned by McClatchy, the St. Paul Pioneer Press. Hearst also bought a southern California paper, the Daily Breeze in Torrance in a $288 million deal.

Hearst then agreed to turn ownership of the three papers over to MediaNews in exchange for equity in MediaNews' non-Bay Area properties.

So, that three years? It’s probably more a stay of execution than a parole, let alone an actual pardon. And, that’s sad. The Trib, especially, needs to remain alive as an independent seven-day voice for the East Bay.