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Pelosi seeks help for newspapers

The House speaker asks the Justice Department to consider 'current market realities' when reviewing mergers.

March 18, 2009|Associated Press

WASHINGTON — In an effort to help struggling newspapers stay in business, House Speaker Nancy Pelosi is asking the Justice Department to broaden its view of media competition when reviewing merger proposals.

Pelosi sent a letter to the Justice Department on Monday saying any antitrust concerns that arise from proposed mergers between newspapers should take into account online news sources and nearby daily and weekly papers "so that the conclusions reached reflect current market realities."

The Hearst Corp., the publisher of Pelosi's hometown paper, the San Francisco Chronicle, has warned that it may have to close the paper if expenses are not reduced quickly or a buyer doesn't step forward. The Chronicle lost more than $50 million in 2008.

On Tuesday, the Seattle Post-Intelligencer -- another Hearst newspaper -- published its last print edition. It is converting to Web only and firing most of its staff.

Pelosi's letter doesn't cite any particular merger efforts at the Chronicle, and an aide said the letter was about more than one newspaper or market. In any merger, the Justice Department would be concerned about a reduction in competition.

The speaker said that given the dwindling number of newspapers in the country, a House Judiciary subcommittee would hold a hearing soon to discuss the trend's implication for antitrust policy.

Michael Cabanatuan, a Chronicle reporter and president of the Northern California Media Workers Guild, said workers at the Chronicle were glad Pelosi was thinking about them, but he had concerns about the ramifications of any potential merger.

"We don't know that simply merging papers and allowing the antitrust changes would guarantee decent-sized news staffs and quality journalism," Cabanatuan said.

He acknowledged that a merger could improve profits, but indicated that wouldn't necessarily mean that San Francisco Bay Area customers were better served.

"We certainly believe the best option is to have as many independent voices as possible," he said.

A deal raising antitrust issues would probably involve MediaNews Group, which owns upward of a dozen papers surrounding the Chronicle, including the Oakland Tribune, the Contra Costa Times and the San Jose Mercury News.

Over the years, staffing at those papers has been cut substantially and costs reduced by sharing news content.

A call seeking comment from MediaNews Group officials was not immediately returned.

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