By: Minnesota Reps. Mark Kennedy and Jim Oberstar on Tuesday urged the Justice Department to review McClatchy Co.'s takeover of Knight Ridder Inc., expressing concerns about the impact of the sale on the Twin Cities.
Although McClatchy kicked off an auction Tuesday by accepting bids for the St. Paul Pioneer Press and 11 other newspapers it is selling, the lawmakers still expressed concern about McClatchy's ownership of the two largest newspapers in the state. McClatchy owns the Star Tribune of Minneapolis.
"We are concerned about the potential grave consequences such a dramatic consolidation could have on the people of Minnesota," wrote Kennedy, a Republican, and Oberstar, a Democrat, in a letter to Thomas Barnett, the assistant attorney general for antitrust.
"A monopoly in the newspaper industry is certainly no less dangerous, and is perhaps more so, than in any other American industry."
In a telephone interview, Kennedy said he didn't think the upcoming sale of the Pioneer Press made the issue moot, noting that McClatchy will still decide on the next owner of the Pioneer Press.
"Would people be comfortable if I said, 'Well, I'm going to make sure I have a Democrat opponent in the upcoming race, but I'm going to choose that Democrat?"' asked Kennedy, who is running for Senate.
"There's an inherent conflict of interest here. When they're calculating the benefit of selling a paper, they get a benefit if they sell to somebody who's going to do less with it, rather than if they sell it to somebody who will really energize the Pioneer Press and make it a really vibrant competitor."
He said McClatchy should have left the Pioneer Press out of the sale altogether, and let Knight Ridder sell it separately.
Oberstar spokeswoman Mary Kerr said Oberstar signed on to the letter out of concern about the dangers of media consolidation.
Knight Ridder spokesman Polk Laffoon said McClatchy is filing for a Justice Department antitrust review.
McClatchy spokeswoman Christina Stenson confirmed the filing was submitted. Stenson also said, "We don't anticipate any antitrust issues." She declined to comment on Kennedy's concerns.
The Justice Department is planning to review the sale of Knight Ridder to McClatchy; newspaper analyst John Morton said the department looks at all big transactions like this one.
"But I don't see any big problems because McClatchy has already announced before they close the transaction, they intend to sell the St. Paul newspaper," which is the only one that presents a conflict with a McClatchy paper, he said.
Morton dismissed the possibility that McClatchy would deliberately sell the Pioneer Press to a weak owner.
"McClatchy will sell to the highest bidder," he said.
Sacramento, Calif-based McClatchy is retaining 20 other papers included in the Knight Ridder deal.
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