B. THE RELEVANT MARKET

The relevant market for purposes of this action is the publication and sale of daily newspapers in the city and county of San Francisco. Daily newspapers constitute a relevant product market because they perform functions for which there are no adequate substitutes. For example, there are distinct classes of advertisers that cannot reach their target audiences except through daily newspapers. Readers interested in timely and in-depth news coverage must rely on daily newspapers. Timely and in-depth coverage of cultural events, sports, and the arts is likewise available primarily through daily newspapers. Daily newspapers also provide features and commentary in an immediate and in-depth manner not readily available in other media. Finally, no other medium provides the combination of all of the foregoing attributes of a daily newspaper. (Deposition of Ted Fang ("T. Fang Depo."), taken April 19, 2000, pp. 144-45; trial testimony of Dr. William S. Comanor, professor of economics.)

The city and county of San Francisco constitutes the relevant geographic market because residents of San Francisco turn to the daily newspapers published in San Francisco, i.e., The Chronicle and The Examiner, when they purchase daily newspapers. Although numerous newspapers are published throughout the Bay Area, within the city and county of San Francisco The Chronicle and The Examiner account for over 97 percent of paid daily newspaper circulation. The predominance of The Chronicle and The Examiner within San Francisco is reflective of the industry-wide phenomenon that locally-published newspapers establish a committed core of readers within their communities. (PX 3, PX 52; Comanor trial testimony.)