Judge Issues Restraining Order in Bay Area Newspaper Sale

JUDGE ISSUES RESTRAINING ORDER IN BAY AREA NEWSPAPER SALE
[SOURCE: Associated Press]
On Tuesday U.S. District Judge Susan Illston temporarily blocked the consolidation of advertising and distribution operations of Bay Area newspapers owned by Denver-based MediaNews. The Northern California newspapers in the McClatchy and MediaNews deal include the Monterey County Herald, San Jose Mercury News and Contra Costa Times. MediaNews, which owns the Denver Post and dozens of other newspapers, also got the St. Paul Pioneer Press in Minnesota under a complex deal that involves financing from Hearst Corp., owner of the San Francisco Chronicle. San Francisco real estate magnate Clint Reilly filed an antitrust lawsuit to block McClatchy's sale of the Bay Area papers to MediaNews, claiming it would create a monopoly on readership and advertising in the Bay Area. Judge Illston ruled Hearst had an undisclosed motive for investing in the deal -- to consolidate advertising and distribution operations with competitors of the Chronicle -- a possible antitrust violation. "Though defendants offered no explanation why Hearst was willing to help finance an acquisition that would only make its competition stronger, the court did not understand that Hearst expected, or would later receive, any quid pro quo," Judge Illston wrote.
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003439635

* Judge wary of Hearst-MediaNews collaboration
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/11/29/BUGJEMLGLG1.DTL