By: E&P Staff
While making no ruling on an emergency request to block the sale of three McClatchy Co. San Francisco Bay Area dailies, a federal judge suggested at a Thursday hearing that she’s likely to deny Clint Reilly’s request for a temporary injunction against it.
“I don’t see that there is imminent irreparable harm,” U.S. District Court Judge Susan Illston said, according to an account by Reuters.
Reilly, an investor and Bay Area political figure, requested the emergency injunction barring McClatchy from closing on the $1 billion sale of the San Jose Mercury News, Contra Costa Times and Monterey County Herald. Reilly contends the newspapers in the complex deal are essentially carving up the Bay Area in a monopolistic fashion.
Reilly’s lawyers requested the emergency order in the belief that the deal was about to be cleared by the U.S. Justice Department’s antitrust division.
In the deal reached soon after McClatchy purchased Knight Ridder and immediately put 12 of the Knight Ridder properties up for bid, MediaNews is buying the Mercury News and Contra Cost Times, which it will then put into the California Newspapers Partnership it manages with Gannett and Stephens.
Hearst Corp. is buying the Monterey County Herald and the St. Paul Pioneer Press in Minnesota, and giving them to MediaNews in exchange for equity in the Denver-based chain’s papers outside of California.
In court filings opposing the injunction, McClatchy noted that it had borrowed more than $3 billion to acquire Knight Ridder and needed to sell off some of the papers to draw down debt. The $1 billion the chain will get from the sale of the Bay Area papers is ‘important to the company’s financial health,” McClatchy said in a filing.