MediaNews buys 4 more papers

NEW YORK — MediaNews Group Inc., publisher of The Salt Lake Tribune, The Denver Post and other newspapers, is acquiring four newspapers from McClatchy Co. for $1 billion in cash with backing from Hearst Corp., another publishing company.

The four papers — the San Jose Mercury News, the Contra Costa Times, the Monterey County Herald and the St. Paul Pioneer Press — are currently owned by Knight Ridder Inc., which McClatchy is in the process of buying.

The deal announced late Wednesday will strengthen MediaNews' presence in northern California, where it already owns several papers in the San Francisco Bay Area.

The four papers are among the 12 Knight Ridder properties that McClatchy has said it intends to sell since they don't meet McClatchy's acquisition criteria, which include being located in rapidly growing markets.

MediaNews' interest in the newspapers had been widely known. The three northern California papers would complement the company's existing holdings, which include The Oakland Tribune and the Marin Independent Journal. MediaNews owns a number of newspapers in geographic clusters, which helps reduce production and other costs and also allows for group advertising sales.

"These were the newspapers that excited us the most about Knight Ridder," MediaNews CEO Dean Singleton said in a statement, calling the deal "a wonderful opportunity at a fair price."

McClatchy would have faced antitrust difficulties owning the St. Paul, Minn., paper since it already owns the Star Tribune in the neighboring city of Minneapolis.

McClatchy said Wednesday that the Department of Justice told the company it would only seek additional information regarding the Minneapolis/St. Paul area, indicating that regulators didn't see other antitrust concerns with the Knight Ridder takeover.

The agreement calls for MediaNews to acquire the San Jose Mercury News and the Contra Costa Times, which will then be folded into the California Newspaper Partnership, an entity in which it has a 54 percent stake.

The other two stakeholders in the partnership, industry leader Gannett Co. and the privately held Stephens Media Group, have agreed to contribute their share of paying for the two papers, according to a joint statement from McClatchy and MediaNews.

Separately, Hearst, publisher of the San Francisco Chronicle, will buy the Monterey County Herald in California and the St. Paul Pioneer Press and then transfer them to MediaNews in exchange for a stake in all newspapers MediaNews owns outside of the Bay Area.