The Hearst Corp. has recorded $330 million in losses in its investment in the San Francisco Chronicle and attempted to sell the newspaper to MediaNews Group Inc., according to court documents made public Thursday in a media antitrust case.
Terms of the 2005 proposal were not revealed. But MediaNews did not offer enough, so no deal was made, James Asher, Hearst’s chief legal officer, said in the documents. The New York-based publisher acquired the Chronicle for $660 million in 2000.
The documents and others, filed under seal, were disclosed as part of a lawsuit challenging a business partnership between MediaNews and Hearst. The documents were unsealed after the San Francisco Bay Guardian newspaper and Media Alliance, a media advocacy group, petitioned the court to make them public.
The antitrust lawsuit challenges Hearst’s investment of $300 million in a complex deal that gives Denver-based MediaNews three more Bay Area newspapers on top of the seven it already owns.
Hearst’s investment helped finance MediaNews’ purchase of the Contra Costa Times, the San Jose Mercury News and the Monterey County Herald earlier this year. The papers are direct competitors to the Chronicle.
San Francisco businessman Clint Reilly last year filed the federal antitrust lawsuit to block the deal, claiming it would limit competition for readers and advertising in the Bay Area.
The newspaper companies maintain the arrangement is not anticompetitive because readers and advertisers have other media venues such as the Internet.
The judge barred Hearst and Bay Area newspapers owned by MediaNews from consolidating national advertising and distribution operations pending the outcome of trial, set for April.
The case is Reilly v. MediaNews, 06-04332.