Follow LA Observed on Twitter here
Hearst Corp. has lost $330 million in the San Francisco Chronicle and tried to sell the newspaper in 2005 to Dean Singleton's MediaNews Group Inc., according to court documents. Singleton didn't offer enough, so that was that. The documents are part of a lawsuit challenging the business partnership between MediaNews and Hearst. (That relationship was recently extended in the purchase by Hearst of the Daily Breeze, which will be turned over to Singleton in exchange for equity in MediaNews.) The lawsuit challenges Hearst's investment of $300 million in a deal that gives Denver-based MediaNews the Contra Costa Times, San Jose Mercury News and Monterey County Herald. Those papers, of course, compete with the Chronicle. The companies claim that the arrangement is not anticompetitive because readers have other media venues. From the SF Bay Guardian, which worked to unseal the documents:
Negotiations over a Hearst investment in Singleton’s operation elevated to a fever pitch shortly after Hearst bought the San Francisco Chronicle in 2000 for $660 million and spent an additional $66 million to support the local Fang family’s disastrous management of the San Francisco Examiner. Hearst had owned the Ex and initially wanted to shut it down; instead, in order to survive legal scrutiny, the giant company gave the Ex to the Fangs and forked over a $66 million subsidy. The whole deal then looked a lot like what went down in Houston. But after expending all of that time, energy and money necessary to take over the Chronicle, Hearst executives concluded by 2003 that the paper was a colossal money pit. They tried changing management, Asher moaned in the deposition. They tried renegotiating union contracts. They were still losing $1 million a week at the Chron, and bored Bay Area subscribers apparently weren’t interested in resuscitating it.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.