MediaNews and 'SF Chron' Plan to Consolidate in Bay Area

MEDIANEWS AND 'SF CHRON' PLAN TO CONSOLIDATE BAY AREA
[SOURCE: Associated Press]
MediaNews Group Inc. and the San Francisco Chronicle plan to consolidate some of the business operations of their Bay Area newspapers, but will refrain from doing so pending the outcome of a federal antitrust trial challenging the deal, both companies said Wednesday. Last week, U.S. District Judge Susan Illston tentatively blocked MediaNews and the Chronicle's owner, Hearst Corp., from merging local distribution and national ad sales. Illston said such a deal could pave the way for "price manipulation" and make it harder for new competitors to enter the market. New York-based Hearst Corp. has invested $300 million in a complex deal that gives MediaNews three more Bay Area newspapers — on top of the seven it already owns, including the Oakland Tribune. Hearst's investment helped Denver-based MediaNews finance the purchase of Hearst rivals Contra Costa Times, the San Jose Mercury News and Monterey County Herald earlier this year. In issuing the temporary restraining order against the alliance, Judge Illston said she had been under the impression that Hearst's investment was solely an equity stake, but an April 26 memo had surfaced suggesting it actually was a bid to merge operations.
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