Media mogul William Dean Singleton has made himself the clear favorite to acquire three Northern California newspapers being sold by McClatchy Co. with his offer to buy those papers and one in Minnesota for as much as $1 billion, according to people familiar with the talks.
Singleton's Denver-based MediaNews Group Inc. already sells more newspapers each day than any other company in California and is a major player in the suburban markets around Los Angeles and San Francisco.
Completing a deal with McClatchy would give him a controlling interest in the San Jose Mercury News, the Contra Costa Times and the Monterey County Herald, as well as the St. Paul Pioneer Press in Minnesota.
McClatchy intends to unload the papers -- and eight others that it is acquiring in its pending purchase of Knight Ridder Inc.--while retaining 20 Knight Ridder papers to become the second-largest U.S. newspaper chain.
McClatchy and MediaNews hoped to complete their deal this week, but a number of details remained to be ironed out late Wednesday, and sources familiar with the talks said a final agreement was not a certainty.
Singleton has been working with private-equity firms and newspaper companies, as he often does, in pursuit of Knight Ridder's properties. It is unclear which partners he might take on in the pending acquisitions.
Buying the Mercury News and the Contra Costa Times would allow Singleton to link their newsrooms, advertising and production operations to nine other papers his company owns in the Bay Area, strengthening what is already a formidable challenge to the San Francisco Chronicle.
"He has most of the dailies that now surround San Francisco proper and this only enlarges his presence in the area," said veteran newspaper analyst John Morton. "With the California properties, Singleton has more of a motive than other folks to pay a higher price because it would enhance what he already owns."
MediaNews has pursued a similar strategy in the Southland, where the Los Angeles Times competes with a bevy of MediaNews papers, including the Long Beach Press-Telegram, the Pasadena Star-News and the Daily News in the San Fernando Valley.
The offer from MediaNews could provide a significant boost for McClatchy, which has seen its stock drop 17% since it announced its purchase of Knight Ridder on March 13. The slide has dropped the value of McClatchy's stock-and-cash offer from $4.5 billion the day it was announced to under $4.2 billion.
