FOR IMMEDIATE RELEASE THURSDAY, OCTOBER 25, 2007 WWW.USDOJ.GOV AT (202) 514-2007 TDD (202) 514-1888 Division Closes Investigation, Parties Interactions Will Continue to Be Subject to the Antitrust Laws WASHINGTON The Department of Justices Antitrust Division announced today that it has closed its investigation of The Hearst Corporations proposed acquisition of a newly created tracking stock of MediaNews Group Inc. (MNG). The acquisition, which was revised in response to antitrust concerns raised by the Department, would give Hearst approximately a 30 percent equity stake in MNGs newspaper businesses outside of the San Francisco Bay Area (Bay Area).
Both MNG, through its controlling interest in the California Newspapers Partnership, and Hearst own and publish daily newspapers in the Bay Area. Hearst owns the San Francisco Chronicle. MNGs daily newspapers include the Contra Costa Times, the San Jose Mercury News, the Marin Independent Journal, and several daily newspapers that operate under the name Alameda News Group - the Oakland Tribune, the Tri-Valley Herald, the Daily Review, the Fremont Argus, and the San Mateo County Times. These newspapers account for most of the readership of and advertising in daily newspapers in the Bay Area.
Hearsts investment in MNG its principal newspaper rival in the Bay Area raised potential competitive concerns warranting investigation despite the parties assertions that they had structured Hearsts proposed investment to give Hearst no equity interest in or influence over MNGs Bay Area businesses. The Divisions investigation focused on whether the proposed investment would give one party an incentive to compete less vigorously in the Bay Area or would provide sources of influence by Hearst or MNG over the others Bay Area activities. During the investigation, the parties modified the proposed transaction in an effort to mitigate antitrust concerns raised by the Department.
Because Hearsts minority investment in MNG will not bring the companies under common ownership or control, interactions among them including any changes in Hearsts investment and related arrangements that affect competition among the companies Bay Area newspapers will continue to be subject to scrutiny under Section 1 of the Sherman Act as well as the other antitrust laws.
This statement is limited by the Divisions obligation to protect the confidentiality of certain information obtained in its investigation. As in most of its investigations, the Divisions evaluation has been highly fact-specific, and many of the relevant underlying facts are not public. Consequently, readers should not draw overly broad conclusions regarding how the Division is likely in the future to analyze other collaborations or activities, or transactions involving particular firms. Enforcement decisions are made on a case-by-case basis and the analysis and conclusions discussed in this statement do not bind the Division in any future enforcement actions. 07-853
Source: US Department of Justice
