MediaNews, Hearst Consider Sharing Distribution

Despite an apparent newsroom rivalry, MediaNews Group and Hearst Corp. - which combined forces Wednesday in MediaNews’ $1 billion acquisition of four McClatchy Co. newspapers, two of which were in the Bay Area - are considering cooperation among their local operations, according to people at both companies, writes the San Francisco Chronicle.

Once the companies close the sale - which involves MediaNews purchasing the San Jose Mercury News and the Contra Costa Times from the McClatchy Co., and Hearst acquiring the Monterey County Herald and St. Paul (Minn.) Pioneer Press and then transferring the papers to MediaNews - the companies will decide whether or not to share newspaper distribution operations in the Bay Area, said two anonymous Chronicle business officials.

Though distribution arrangements in the industry are common, such deals between direct competitors are rare.

“To the extent there are things that can be done lawfully within antitrust guidelines, we’re open to those sorts of things, but have not sat down to flesh out areas where we might work together,” said Jody Lodovic, MediaNews President. “Distribution is one that might be relevant because clearly there would be efficiencies … (and it) would not have any antitrust implications.”

“For newspaper companies to (join forces) to move their papers around or to hire the same carriers is obviously not going to hurt consumers,” said Jesse Markham, the co-chair of the antitrust practice San Francisco-based law firm Morrison & Foerster. “Collaboration for efficiency’s sake where you’re not in any obvious way dampening rivalry tends not to raise antitrust concerns.”