How News on Sale of 4 Knight Ridder Papers Came Out

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By: E&P Staff

Rumors have circulated for days that MediaNews Group is after a number of the “Deserted Dozen” in the big Knight Ridder/McClatchy deal, and where there was smoke there now appears to be fire, involving three California papers and one in Minnesota.

Now the $1 billion deal is done. It was officially announced just before 6:00 pm, after reports circulated all day. It is a complex deal that also involves the Hearst Corp. getting two of the papers, but selling them back to MediaNews for a stake in that company.

Earlier, Rick Rodriquez, editor of McClatchy’s Sacramento Bee, cited wire reports from the podium at today’s ASNE luncheon in Seattle: “We have the beginnings of a news flash, with the announcement this afternoon expected at 2 o’clock of the McClatchy sale of four papers to MediaNews.” He named the four as the San Jose Mercury News, the Contra Costa Times and the Monterey County Herald, and Minnesota’s St. Paul Pioneer Press.

The Contra Costa Times reported on its Web site at mid-afternoon, “MediaNews Group Inc. will announce a purchase of the Contra Costa Times and three other papers as early as this afternoon, according to several media reports. The Associated Press put the sales price at $1 billion, citing ‘a person familiar with the matter.'”

The AP added that MediaNews would acquire the papers “in a complex transaction with the backing of its two existing partners in other California newspapers, Gannett Co. and Stephens Media Group, as well as Hearst Corp.,” a source said. MediaNews controls 54% of that California Newspapers Partnership, with Gannett and Stephens dividing the rest.

Hearst owns the nearby San Francisco Chronicle.

A reporter at the San Jose Mercury News told E&P there had been no announcement there so far, “but they are putting up speakers in the newsroom.” He said an announcement had been postponed until 2:30 p.m., local time.

“Apparently it’s happening,” Kevin Keane, executive editor of MediaNews’ Alameda Newspaper Group (ANG), told E&P’s Joe Strupp this afternoon. “I’m excited about the prospects. I think it’s good for the Bay Area, it will help us collaborate on coverage we can’t do now.” The ANG “core” dailies include the Oakland Tribune, Alameda Times-Star, Daily Review in Hayward, Argus in Fremont, Tri-Valley Herald in Pleasanton, and San Mateo County Times.

Chris Lopez, editor of the Contra Costa (Calif.) Times, reported on his blog today that he been told “that there will be an announcement of a sale of the Contra Costa Times and San Jose Mercury News on Wednesday afternoon. The scenario everyone at both newspapers anticipates is that the new owner will be Denver-based MediaNews.”

Then, in early afternoon, Palo Alto Weekly reported on its Web site that MediaNews had emerged as the buyer for the San Jose Mercury News, Contra Costa Times, and also the Monterey County Herald, “according to sources within Knight Ridder.”

The four newspapers, which are owned by Knight Ridder, are among the 12 being sold by McClatchy as it acquires a total of 32 in the deal. McClatchy has said those papers didn’t meet its acquisition criteria, which include being located in rapidly growing markets.

The first papers among the 12 are now on the way elsewhere.

The Palo Alto paper reported: “MediaNews CEO Dean Singleton is expected to come to the Times’ newsroom to make the announcement himself at noon today,” the sources said.

“The Palo Alto Daily News group and its four sister papers, a Bay Area chain of local tabloids that Knight Ridder purchased a year ago, are expected to be a part of the package deal.”

The Mercury News stated: “A purchase by MediaNews Group Inc. would reshape the newspaper landscape in the Bay Area.”

Spokesmen for MediaNews, McClatchy, and Knight Ridder all gave E&P a “no comment.” Others contacted by E&P have not yet returned calls.

Just Tuesday, MediaNews CEO Dean Singleton and McClatchy CEO Gary Pruitt bantered about a possible deal at an ASNE panel (see separate story).

Susan Goldberg, executive editor of the Mercury News, who was at the ASNE conference in Seattle, departed today. Pruitt has left for New York City.

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