Eureka! Here comes even more Eurekaism! (part 3)

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Hearst was last seen covering the big Hearst/Singleton deal via Reuters out of New York. Now it is blacking out the story completely. A tale of two footnotes tells all.

By Bruce B. Brugmann

Just in time to update our annual Project Censored package, the Hearst/Chronicle demonstrated yet again how the galloping Conglomerati are covering the big story in Eureka (where the MediaNews Group/
Singleton are competing headon with a local upstart daily) -- and blacking out the much bigger story in the Bay Area where Hearst and Singleton are destroying daily competition and forming a regional monopoly, aided and abetted by the McClatchy, Gannett, and Stephens newspaper chains.

The major new development: The federal judge in the
Clint Reilly/Joe Alioto lawsuit against the deal okayed an agreement between lawyers from both sides to fast-track the suit and set a trial date for Feb. 26.
Obvioiusly, this is a major local news story. Josh Richman, a staff writer for the Singleton’s East Bay group, wrote a story dated Saturday, Sept. 2, headlined “Newspaper suit put on legal fast track.” The story quoted Alioto as saying on Monday Sept. 4 that he and Reilly “are grateful that the court has ordered an expedited trial date in this very important antitrust case which seeks to prevent the monopolization of newspapers in the Bay Area.”

The story quoted MediaNews president Jody Lodovic as offering “no comment except to note that the case was accelerated by mutual agreement. Hearst spokesman Paul Luthringer (B3 note: who he? where he? New York? ) said his company wouldn’t comment.” It is always great sport, of course, when publishers under fire say “no comment” to their own reporters.

Hearst’s last story on the deal came from the Reuters New Service out of New York (which it butchered, see my earlier blog.) This time, the Chronicle simply blacked out the story completely. The Singleton story left out a key point: that Hearst had invested $399 million in the deal and that the two major chains were becoming jolly good business and editorial partners in creating an unprecedented Bay Area newspaper monopoly. Both chains are sweating mightily to create the impression this is no big deal, there isn’t much of a story here, that Justice and the AG have cleared it, and Clint Reilly is just, well, Clint Reilly, and there is nothing to the lawsuit, and certainly nothing for anybody to worry about. Peace!

However, there is a deadly time bomb in the deal and it is hidden in a tiny footnote in Hearst’s July 25 filing in the suit. The footnote disclosed that Hearst is a major potential major investor and partner with Singleton. Here’s how it works: Hearst has stated repeatedly that its $299 million equity investment in MediaNews will be based on what is known as “tracking stock.” In other words, the value of the MediaNews stock will rise and fall depending solely on the performance of MediaNews businesses outside the Bay Area, which was a legal structure set up presumably to help the deal survive anticipated antitrust scrutiny.

However, Hearst admitted in the footnote that in the future the “tracking” stock “will be convertible into ordinary MNG common stock.” Hearst added that any such conversion will require additional antitrust review. Federal Judge Susan Illston picked up on the significance of this footnote in her own footnote in her ruling knocking out the Reilly request for temporary restraining order. She stated, “Although Hearst’s proposed interest in MediaNews does not include MediaNews Bay Area publications, Hearst implies in its filings that it will seek permission at a future time to convert its interest in MediaNews into MediaNews common stock.” (See the G.W. Schulz story in the current print and online Guardian).

Voila! In this mysterious tale of the two footnotes, the closely held secret is finally revealed: Hearst and Singleton are working hard to be partners, cheek to cheek, jowl to jowl, shoulder to shoulder, hip to hip. And this fact, among many others, demonstrates in 96 point Garamond Bold why they have employed Eurekaism and censored a big local story about newspaper monopoly, the local censored story of the year, while going hellbent to cover the story about Singleton’s competition in Eureka.

Stop the presses: Frances Dinkelspiel, in her Wednesday Aug. 30 blog (see link below), spotted a juicy Eureka and posted it under the head “Newspaper Coverage in the Bay Area is Shrinking.” Her lead: “the latest evidence of media consolidation in the Bay Area screamed out all over the front pages on Wednesday.”

She pointed out that the four major papers in the region (Hearst/Chronicle and the Singleton/Contra Costa Times/San Jose Mercury News/Oakland Tribune) all prominently displayed the same story--the story of the motorist who deliberately drove his car into l4 pedestrians, killed one man in Fremont, and injured l3 others in San Francisco.

“On Wednesday,” she said, “instead of four distinct stories on the region’s front pages, there were only two—one from the Chronicle and one from the MediaNews group.” (Merc reporters did the story for the three Singleton papers.) She concluded, “That’s a huge loss for Bay Area readers. Competition improves news coverage. What will readers miss out on in the future? What will readers miss out on in the future? This was just a police story; imagine the impact when the big story deals with corruption or another important, but less easily reported event. If fewer reporters are tracking the story, there will be fewer revelations.”
Eureka!

Postscript: Let’s keep the Eureka exercise going. Anybody who spots a Eurekaism, an example of the galloping Conglomerati censoring a local story, please send it along to the Guardian and the Bruce blog and any of the handful of independent voices left in the Bay Area. B3

The silent scandal

The Mercury News

Ghost Story

Newspaper suit put on legal fast track - Inside Bay Area