The probes reported today by The Wall Street Journal come as the newspaper industry appears headed into a new round of consolidation. The publisher Pulitzer Inc. is exploring the possibility of a sale.
The newspaper said the Justice Department is investigating Gannett's proposed buyout of HomeTown Communications Network Inc., a Midwest community-newspaper publisher based in Livonia, Mich., and has opened a preliminary inquiry into the Times' plans to take a 49 percent stake in Metro Boston, a free daily that competes with The Boston Globe, which is also owned by the Times.
While both transactions are relatively small, the Journal said they suggest future deals also could face tough scrutiny.
St. Louis-based Pulitzer, which owns the St. Louis Post-Dispatch, the Arizona Daily Star in Tucson, and other dailies, recently hired Goldman Sachs as financial adviser and said it would explore "a range of strategic alternatives," including a potential sale.
McLean, Va.-based Gannett, publisher of USA Today, and E.W. Scripps Co. have said they plan to take a look at Pulitzer, which some analysts say could fetch about $1.5 billion in a sale.
Gannett already owns dominant daily newspapers in Detroit and Cincinnati. It announced in November it would buy HomeTown, whose assets include one daily paper and 58 weekly and twice-weekly community newspapers in Michigan, Ohio, Kentucky, and Indiana. The deal was expected to close in 30 days, but the Journal said it has apparently been delayed by a wide-ranging antitrust review.
The Times deal for a stake in Metro Boston has already generated a complaint from Herald Media Inc., which owns the Boston Herald, a daily tabloid rival of the Globe. Herald Media said the deal would hurt Boston readers and advertisers.
A spokeswoman for the Times defended the proposed investment to the Journal, saying it "would give advertisers more options and readers more news" and that the deal would be "pro-competitive" for greater Boston.
By: (AP) Federal antitrust enforcers are reportedly investigating plans by Gannett Co., the nation's largest newspaper publisher, and the New York Times Co. to acquire or invest in local rivals.