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From staff and wire reportsSAN FRANCISCO -- The Hearst Corp. agreed today to sell the flagship of its media empire, the San Francisco Examiner, to a company led by the publishers of the San Francisco Independent, a free newspaper published three times a week.
"The Examiner has been part of the history and identity of San Francisco. We hope to carry on the Examiner's proud tradition of public service and journalistic excellence," said Ted Fang, who will be publisher of both the Examiner and the Independent.
The new Examiner and the San Francisco Chronicle, which have been publishing under a joint operating agreement since 1965, will be published independently following a four-month transition, Fang said in a statement.
Hearst has been seeking a buyer for the Examiner since Aug. 6, when it abruptly announced its purchase of the Chronicle for $660 million, pre-empting any potential bidders for its morning rival as well as the production equipment the papers shared.
CHANGING HANDS
The new owner is Ted Fang of the San Francisco Independent.
The San Francisco situation has been closely watched in Honolulu where the owner of the 118-year-old Star-Bulletin has announced plans to shut down the 65,000-circulation afternoon daily.
In September, Liberty Newspapers L.P. said it would close the Star-Bulletin but U.S. District Judge Alan Kay issued a temporary restaining order after the attorney general's office and a local community group sued to block the closure.
Honolulu Advertiser owner Gannett Co. had agreed to pay Liberty $26.5 million to end their joint operating agreement and close the Star-Bulletin.
The move would have left the Advertiser as Honolulu's only daily newspaper.
The agreement to close the Star-Bulletin expired in December and the two companies, saying the state's lawsuit is now moot, filed a motion to dismiss the case. Judge Kay has set a May 15 hearing on the motion.
'I think it means that Honolulu ought to
Stephen Barnett
follow the Examiner model and look for a
local person who might be interested in
buying the Star-Bulletin.'
NEWSPAPER ANTITRUST LAW EXPERTThe parties in the case have held settlement talks but no agreement has been reached.
Deputy Attorney General Rodney Kimura called today's San Francisco development "encouraging" but declined further comment.
Alan Marx, Liberty's attorney, had no comment and Mike Fisch, publisher of the Advertiser, could not be reached for immediate comment.
Tom Brislin, University of Hawaii journalism professor, said he believes the sale of the Examiner could set a precedent for a potential sale of the Star-Bulletin.
In many ways, Hearst's attempt to buy the Chronicle and close the Examiner shared the same legal principles and business strategies as Liberty's attempt to close the Star-Bulletin, he said.
"It remains to be seen but there is the possibility that what happens in San Francisco could set a course for what happens in Honolulu," Brislin said. "Everyone seemed to be looking at the San Francisco and Honolulu situations as linked."
Stephen Barnett, professor at University of California at Berkeley's Boalt Law School and an expert in newspaper anti-trust law, echoed that sentiment.
"I think it means that Honolulu ought to follow the Examiner model and look for a local person who might be interested in buying the Star-Bulletin," Barnett said.
Financial terms of the Examiner deal were not disclosed, though Hearst said in a statement that the new owner will assume certain liabilities. Hearst will also make a significant financial commitment to the Examiner's continued publication.
Neither Hearst nor ExIn LLC, a new company affiliated with the Fang family, said whether the new Examiner will continue as an afternoon paper, as it has been since 1965, or switch back to mornings and compete head-to-head with the rival Chronicle.
"After a vigorous and protracted sales effort and discussions with regulatory authorities and Clint Reilly and his attorneys in connection with the litigation regarding the transaction, The Hearst Corporation determined that in order to complete its purchase of the Chronicle, it was appropriate to facilitate the continued publication of The Examiner rather than close the newspaper," according to Hearst's announcement.
Reilly, a San Francisco real estate developer, also had made a bid to buy The Examiner and had filed an antitrust suit to block the Examiner-Chronicle merger.
Hearst sweetened its offer in February, adding trucks, printing presses and other assets along with the newspaper's name and subscriber list.
All current employees of the Examiner, the Chronicle and the San Francisco Newspaper Agency, which oversees the JOA, will continue working for the Hearst Corp., except for those employees who take positions with the new Examiner, ExIn said.
Hearst said the investment banker it hired to sell the Examiner, Veronis Suhler & Associates of New York, had been in contact with more than 90 prospective buyers.
William Randolph Hearst founded what is today Hearst Corp. in 1887 when he assumed control of the Examiner. The newspaper has a daily circulation of 108,968.
Star-Bulletin reporter Rick Daysog contributed to this report.
Bulletin closing archive
