Saturday, February 03, 2007

Hearst & Dean Singleton: "Ya gotta have friends!"

If you've been paying attention, the economics of the newspaper industry have taken a nosedive.

The mighty Tribune Co., publisher of the LA Times, Chicago Tribune and other papers, is up for sale but evidently disappointed in the paltry bids it's received.

The Minneapolis Tribune was sold recently by the McClatchey Co., which had just acquired the Knight-Ridder newspaper chain, for less than half the price for which it previously was purchased in the early 90s.

And out in San Francisco, the Hearst Co., which publishes the Houston Chronicle, is losing about $1 million per week with its San Francisco Chronicle, which it stupidly purchased for $660 million (plus an additional $66 million subsidy to prop up the SF Examiner, which it dumped, in order to sidestep anti-trust rules) in the early 90s.

Hearst is desperate to stop the bleeding of its SF paper. If it can't, one of their executives suggested it'll have to consider calling it quits.

So Hearst has turned to an old friend, Dean Singleton, one-time owner of the Houston Post, to see if itcan consolidate forces with Singleton's multiple Bay Area publications to save money.

A collaboration between Hearst and Singleton has raised anti-trust concerns and a lawsuit has been filed.

The San Francisco Bay Guardian, a weekly paper, notes how Hearst and Singleton first cast eyes upon each other:

Hearst and MediaNews Group first met intimately in the 80s, and the two fell in love. Both at that time were pursuing the Houston Chronicle. MediaNews instead took over the Houston Post and later sold its assets to Hearst for $120 million, leaving Hearst alone with the Chronicle to dominate the Houston market.

The deal was made in secret eight months before the Post was actually shut down so Hearst could gain Justice Department approval by pretending to publicly seek a buyer, a detail later revealed by the Texas altweekly Houston Press. By the time the Columbia Journalism Review published a profile of MediaNews CEO William Dean Singleton in 2005, he had not disputed the story.

Since the Houston compromise was made, the two companies have been everything but warring newspaper barons. In fact, according to the newly released records, Hearst spent the intervening years after the Houston deal looking for just the right opportunity to invest fully in MediaNews.

Hearst “formed a very favorable impression of Dean Singleton and his company” at that time, according to the Asher deposition.

If you're keeping score, Singelton has killed the Houston Post and Dallas Times Herald;
Hearst killed the San Antonio Light (when it acquired SA's bigger paper, the Express-News, from Rupert Murdoch and shuttered The Light.)

The Justice Department sat on its thumbs during those manueverings in Texas, so it seems unlikely to step in the middle of the Bay Area wheeling and dealing, unless I'm missing something.

No comments: