1. Daily Newspapers in San Francisco Are a Relevant Market

Although relevant market is a question of fact, Associated Radio Service Company v. Page Airways, Inc., 624 F.2d 1342, 1348-49 (5^th Cir. 1980), the issue has been litigated to conclusion sufficiently often in the newspaper field to settle the question that local daily newspapers are indeed a relevant market for antitrust purposes. Times Mirror, 274 F. Supp. at 606; Community Publishers v. Donrey Corp., 892 F. Supp. 1146, 1155-57 (W.D. Ark. 1995). The evidence here, set forth in Section IIB supra, will lead inexorably to the same conclusion (e.g., The Chronicle and The Examiner account for 97 percent of daily newspaper circulation in San Francisco). Defendants lose on the relevant market.

2. The "Sale" to the Fangs is a Sham

Defendants contend that they have preserved competition in the relevant market by Hearst’s transfer of The Examiner to the Fangs. The overwhelming weight of the evidence, however, is to the contrary, including the unanimous opinion of the experts for both sides that no one can successfully operate a daily newspaper against The Chronicle on a budget of $25 million, much less the Fang’s proposed $15 million budget, for which Hearst is paying the Fangs a takeaway incentive bonus of $5 million. No matter how sincere, well-intentioned, and ambitious the Fangs may be, they cannot publish a major metropolitan daily newspaper for $15 million or even $25 million a year, just as they cannot fly no matter how hard they flap their arms. Moreover, there is substantial evidence in the record that puts a much darker cast on the Fang transaction and the bona fides of all involved in it. That evidence will speak for itself at trial.

Defendants will simply be unable to convince this Court, or anyone else, that the Fang transaction is not a sham, or raises even the slightest likelihood of preserving daily newspaper competition in San Francisco. Under the JOA, the people of San Francisco are guaranteed newspaper competition through 2005, if not beyond, given Hearst’s oft-stated intention to remain in this market. This Court should not permit Hearst to rob them of that benefit by the shabby and illusory substitution of an undercapitalized imposter.