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SAN JOSE, Calif. - The San Jose Mercury News and Contra Costa Times became part of a Bay Area media powerhouse led by Denver-based MediaNews on Wednesday, ending a saga that began nine months ago when the papers' owner, Knight Ridder, was forced to put itself up for sale by disgruntled shareholders.
MediaNews, and its partners in the acquisition, Gannett and Stephens Media, wired funds totaling $736.8 million to McClatchy's banks, and attorneys completed paperwork finalizing the deal.
The Mercury News and Contra Costa Times join an already strong MediaNews presence in the Bay Area, where it publishes the Oakland Tribune, Hayward Daily Review, San Mateo County Times, Marin Independent Journal, Tri-Valley Herald and Fremont Argus. MediaNews also publishes the Reporter in Vacaville and Daily Democrat in Woodland.
"We believe we bought the crown jewels of the Knight Ridder group," said Dean Singleton, chief executive officer and vice chairman of MediaNews, who was meeting in Pleasanton with executives of his Bay Area newspapers. "We're looking forward to making them even better."
George Riggs, who remains publisher of the Mercury News, was appointed to oversee all of MediaNews' operations in Northern California. Riggs, a former publisher of the Contra Costa Times, joined the Mercury News as president and publisher in December 2004.
The acquisition had to be reviewed by the U.S. Department of Justice's antitrust division, which conducted an extensive, lengthy study of the impact of the deal on the Bay Area's mediascape before favorably concluding its review Friday.
"This has been a long transaction and we're certainly pleased to get it done," said Jody Lodovic, president of MediaNews. "We believe these assets fit together and in the long run will strengthen the respective individual newspapers and provide a better product for readers and advertisers, and we're happy to get moving on that strategy."
The two former Knight Ridder newspapers will be added to the Denver company's subsidiary, the California Newspapers Partnership. In all, MediaNews will have more than 737,000 daily subscribers in Northern California.
MediaNews' Bay Area newspapers are operated by the partnership with Gannett and Stephens Media, in which MediaNews owns a 54.23 percent controlling interest.
MediaNews also immediately begins managing the Pioneer Press in St. Paul, Minn., and The (Monterey County, Calif.) Herald under an agreement with Hearst, which is buying the two papers from McClatchy. Eventually, MediaNews will acquire both papers from Hearst.
The Mercury News is one of a dozen former Knight Ridder dailies that McClatchy is selling to help pay down debt incurred when it bought Knight Ridder for $4.1 billion. McClatchy also assumed $2 billion in Knight Ridder debt.
Lodovic said the company won't make any major changes for several months. "It will take time to figure out how to operate efficiently in that market," he said. The company plans to develop a Bay Area-wide Internet search platform.
There are also potential efficiencies in combining production and delivery of the newspapers, "but that's not going to happen on Day One," Lodovic said.
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(c) 2006, San Jose Mercury News (San Jose, Calif.). Distributed by Knight Ridder/Tribune News Service.
