Plaintiff’s discussions with Hearst occurred after plaintiff brought this lawsuit and were solicited by Hearst, not by plaintiff. When Hearst inquired if plaintiff would be interested in buying The Examiner, plaintiff retained a number of prominent experts to evaluate the opportunity. These experts included persons with extensive and varied experience in all aspects of the newspaper business, including hands-on experience working for the Agency. Plaintiff’s experts provided in-depth analysis of what would be required to make The Examiner a viable competitor in the hands of a new owner. On March 7, 2000, plaintiff made the following proposal to Hearst, based on the advice of his experts:

1. 3 years joint advertising, circulation, production and distribution services [to be provided by Hearst through the Agency]

2. For 3 years Hearst absorbs all JOA costs for a 65,000-70,000 circulation PM newspaper [this is inaccurate; plaintiff was proposing an AM newspaper], one print run, home delivery in SF city area--estimated incremental cost $17 million/year [this is Hearst’s estimate]

3. Hearst retains all Examiner revenue during 3 year period--estimated incremental revenue $3.5 million/year [Hearst’s estimate]

4. Hearst to pay actual Examiner editorial and G&A expense up to $20 million (perhaps $15 million) per year for first 3 years. Hearst to pay an additional $17 million/year for years 4, 5, and 6

5. Reilly wants to purchase Examiner Office Building, adjacent parking lot and Brannon St. property at price to be negotiated--offered $5 million, $1 million, and $2.5 million respectively

6. Will sign firm contract within 2 weeks and close promptly thereafter. [PX 32.]

The offer made by plaintiff approached a total subsidy of $200 million over six years, including the income to be generated from the real estate. Plaintiff also estimated the need for significant capital expenditures to build a printing plant, create a Sunday edition, and move The Examiner to the morning. Plaintiff estimated annual operating costs for the paper to be a minimum of $45 million. (Reilly trial testimony.)

Hearst, however, had another agenda. On March 16, 2000, less than 10 days after plaintiff’s proposal, Hearst sold The Examiner to the Fangs, on far different terms, not only ensuring that The Examiner would fail, but providing incentives to the Fangs to fail. (PX 35.)