Antitrust Lawyer Blog Commentary on Current Developments

DOJ Extends Review of McClatchy Sale of California Newspapers

On June 14, McClatchy Co. announced that the Department of Justice is extending its review of the company's sale of two California newspapers to MediaNews Group Inc. The two properties, the San Jose Mercury News and the Contra Costa Times, are part of a $1 billion three-way swap of four papers that also involves Hearst Corp. On April 26, McClatchy announced plans to sell the four papers, acquired as part of its $4.5 billion purchase of Knight Ridder Inc. McClatchy must divest the four papers and eight others to raise cash and satisfy Justice Department antitrust concerns over the larger Knight Ridder deal. The DOJ's second request for information, could delay the MediaNews-Hearst arrangement until late summer.
Under the complex deal announced nearly two months ago, MediaNews will acquire from McClatchy Knight Ridder's San Jose Mercury News and Contra Costa Times. Hearst will acquire Knight Ridder's Monterey Herald and St. Paul Pioneer Press. In a side deal, Hearst will in turn sell the Herald and Pioneer Press to MediaNews in exchange for a stake in the unit that owns MediaNews' papers outside the San Francisco area. The Justice Department does not comment on ongoing antitrust reviews, but the focus of the latest second request is likely to be concentrated in the San Francisco Bay Area's newspaper market. Dailies owned by Denver-based MediaNews already include the Oakland Tribune, Marin Independent Journal, Tri-Valley Herald and Hayward Daily review.