William Dean Singleton will acquire three California papers and one in Minnesota being sold by McClatchy Co. in a $1-billion deal that will dramatically expand his company's presence in the Bay Area and cement his position as the Golden State's biggest daily newspaper publisher.
McClatchy said Wednesday that it would sell the San Jose Mercury News and Contra Costa Times to Singleton's privately held MediaNews Group Inc., and the Monterey County Herald and St. Paul, Minn., Pioneer Press to Hearst Corp., publisher of the San Francisco Chronicle and Singleton's biggest remaining Bay Area competitor.
Hearst, in turn, would then give those papers to Singleton in exchange for an undisclosed stake in MediaNews' holdings outside the San Francisco area.
Denver-based MediaNews already owns nine Bay Area papers, including the Oakland Tribune and the Fremont Argus. If approved by regulators, the deal would more than double MediaNews' daily circulation in the area to about 730,000 papers. The Chronicle sells about 420,000 papers a day.
The proposed deal, the result of three weeks of intensive negotiations, has two of the 54-year-old Singleton's hallmarks. It allows him to save money by combining resources at newspapers that are close to each other, and it has the potential to soften the competition from a well-financed neighbor.
Singleton, known for cutting staff to improve the bottom line, said Wednesday that he had no immediate plans to eliminate jobs at the papers.
"There is certainly nothing in the works today to do that, but if there are consolidation opportunities that make sense, I'm sure that local management will look at them," Singleton said.
In an upbeat speech to Mercury News staffers, he described the paper as the crown jewel in a chain that was itself "the crown jewel of the newspaper industry," referring to Knight Ridder Inc.
The deal is the first by Sacramento-based McClatchy since it announced March 13 that it planned to buy San Jose-based Knight Ridder and sell 12 of Knight Ridder's 32 papers to pay down the debt. The stock and cash deal for the nation's second-largest newspaper chain in terms of circulation is now valued at around $4.3 billion, not including $2 billion in assumed debt.
McClatchy said it would net $700 million from the Singleton deal after taxes.
"We made this deal because it offered the opportunity to achieve a good price and a timely deal, and it represents a big step toward achieving certainty for these papers and for McClatchy and its shareholders," Chief Executive Gary Pruitt said.
