MediaNews: Reilly Lawyer Making 'Absurd' Claims for Bay Area Settlement

By: Mark Fitzgerald and Jennifer Saba MediaNews Group Inc. President Jody Lodovic said Friday that the chain is "strongly considering" suing San Francisco attorney Joe Alioto for comments he made to E&P about the settlement that ended a lawsuit claiming the Denver chain and Hearst Corp. were trying to monopolize the Bay Area newspaper market.

"He's already breached the settlement agreement," Lodovic said about the agreement announced Wednesday. "He's overstated the things that (San Francisco businessman Clint) Reilly gets, and he keeps saying things that are not in the settlement."

In a telephone interview from MediaNews' Denver headquarters, Lodovic took particular exception to Alioto's claim that the agreement would preserve the Oakland Tribune and other MediaNews Bay Area papers for at least the next three years.

"The Oakland Tribune, the Fremont Argus, San Mateo (County Times), (The Daily Review in) Hayward, Novato (Marin Independent Journal) -- all of those papers were heading for the graveyard," Alioto told E&P Wednesday. "There was pretty strong evidence those papers were going to go out. By reason of our agreement, I think, they'll stay alive, at least for three years."

"It's the most absurd comment I've every heard in my life," Lodovic said. "The bottom line is there's no basis for him to comment on the viability of these newspapers in the Bay Area."

Lodovic said Alioto is wrong -- and in breach of the confidentiality terms of the agreement -- to say that Reilly has the right to sit on the editorial board of any California Newspaper Partnership (CNP) newspaper he chooses, and to receive, at no cost to Reilly, a quarter page of space once a week for what the agreement calls "personal copy" in each CNP paper.

"This is paid space," Lodovic said. "(Alioto's) running around telling everyone (Reilly's) getting it for free. We haven't got any terms for it yet, but it's paid space."

A call to Alioto's cell phone number seeking comment was not returned immediately.

Reilly cannot sit on the editorial board of any paper he chooses, Lodovic said, only on a paper whose editor agrees it is okay.

Lodovic said the settlement gives Reilly three things:

-- Preferential positioning once a week for paid space in each of the California Newspaper Partnership newspapers.

-- The opportunity to recommend a citizen to each of the CNP San Francisco Bay Area daily newspaper editorial boards for a one-year period but subject to approval by the boards.

-- MediaNews Group will provide copies of the minutes for CNP management meetings and notice of any planned discussions of cooperative efforts with Hearst's San Francisco Chronicle.

Lodovic responded to Alioto's remarks who said on Wednesday, "If there's any suggestion by anybody of any kind of discussion or cooperative effort (between companies), we will be immediately notified," Alioto said. "Because, obviously, if they have that -- we'll just sue them again," he added.

Lodovic stressed that MediaNews Group only must alert Reilly of any possible distribution or other cooperative efforts with the Chronicle should they occur, not seek out permission. And if any future strategies make sense, the companies will move forward. "Quite frankly him threatening to sue me again doesn't scare me," Lodovic added.

A full copy of MediaNews Groups Statement on the agreement follows below.

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Following a press conference in San Francisco Wednesday morning, hosted by Clint Reilly and Joseph Alioto, announcing settlement of their litigation against MediaNews Group, Hearst and others, there appears to be some confusion on certain of the terms of settlement.

Below are the exact terms as lifted from the agreement:

Provisions Regarding McClatchy Acquisitions

In satisfaction of Reilly's release of all claims concerning the McClatchy acquisitions, as set forth hereafter, MNG and CNP agree as follows:

A. A citizen will be appointed to each of the CNP San Francisco Bay Area daily newspaper editorial boards. Such citizens will be appointed to one-year terms, and can be recommended by Reilly subject to approval by the respective editorial boards. Such citizen representation shall continue for a minimum of three (3) years.

B. Reilly at his discretion will receive a one-quarter (1/4) page of paid space for personal copy, placement to be in the local section, in substantially the same place on the same day once a week, in each CNP San Francisco Bay Area newspaper for a period of three (3) years.

C. MNG will promptly provide Reilly, subject to an appropriate confidentiality agreement, for a period of three (3) years: (i) copies of the agendas and minutes of the CNP Management Committee meetings at such time as the CNP Management Committee members receive them; and (ii) notice of any planned discussion of cooperative efforts with the Chronicle or any other non-CNP San Francisco Bay Area paid daily newspaper.

Nothing in the settlement terms deviates from normal policies already in existence.

A. MediaNews encourages its newspapers to include citizens in their editorial board process, but leaves the choices for that representation to the local editorial boards, as this agreement does. We welcome recommendations from any reader or community leader, including Mr. Reilly.

B. MediaNews welcomes citizens ... including Mr. Reilly ... who wish to place paid space to sell products or express ideas. All citizens are invited to use paid space for any purpose they choose.

C. Our Bay Area newspapers currently have no plans to discuss cooperative efforts with the San Francisco Chronicle. If we do in the future, no action would be contemplated unless it fully complies with the law. That has always been our position in the past, and remains so today.