Clint Reilly, a leading San Francisco businessman and civic leader, has brought a lawsuit under federal antitrust laws to prevent the Hearst Corporation of New York (owners of the San Francisco Examiner) from purchasing the San Francisco Chronicle newspaper, thereby achieving an illegal monopoly over the daily newspaper market in San Francisco. Reilly's lawsuit aims to ensure continued competition in the newspaper business in San Francisco through at least 2005 (the outside date of the existing Joint Operating Agreement between the Chronicle and Examiner), if not beyond.
Reilly filed his lawsuit in January, 2000, after the Hearst Corporation precipitously announced its acquisition of the historic San Francisco Chronicle newspaper and simultaneously announced that it would likely be closing the San Francisco Examiner newspaper, merging its content into the Chronicle as a single daily newspaper. Such a monopoly is unlawful under the federal Newspaper Preservation Act of 1970, designed to preserve multiple independent editorial voices in a community like San Francisco which has a history of diverse newspaper competition.
The Hearst Corporation, owner of the Examiner, is one of the nation's largest diversified media conglomerates, comprising newspaper, magazine, cable TV, television and radio broadcasting. The Chronicle Publishing Company, owner of the Chronicle newspaper, has been a privately-held, family-run company since the DeYoung family first published the Chronicle in 1865.
After Reilly filed his lawsuit in federal court, the Hearst Corporation announced that it would indeed purchase the Chronicle newspaper but would "sell" the Examiner newspaper title to the politically-connected Fang family of San Francisco, allies of Mayor Willie Brown. At issue in the federal case is whether the Examiner sale is simply a sham "sale" to the Fangs, sweetened with a $66 million "subsidy" paid by Hearst to the Fangs, intended to ease federal approval of the original Hearst purchase of the Chronicle and ensure a Hearst daily-newspaper monopoly in San Francisco's future.
The trial is currently being heard before Judge Vaughn Walker in U.S. District Court, San Francisco Federal Building, 450 Golden Gate Avenue.