Hearst, MediaNews tango; but who leads?
Paid Content reporter David Kaplan spotted this latest collaboration between my Hearst Corp. (which own the San Francisco Chronicle where I am a Silicon Valley reporter) and MediaNews, the chain that controls most of the surrounding papers, including the Contra Costa Times, Oakland Tribune, Hayward Daily Review and San Jose Mercury News.
As Kaplan blogs today:
“Buried in newspaper conglom MediaNews‘s 10-Q filed earlier today with SEC: the newspaper group, along with The Hearst Corp., has bought 80 percent of online classifieds and software firm Kaango, for about $20 million. Kaango will be held by a newly formed LLC, which is 50 percent owned by each of the two.”
Kaplan adds details about the “$1.01 million (loss MediaNews reported) in Q3, compared to a profit of $13.3 million in the year-ago quarter” and that will connect back to my earlier posting about the Newspaper Guild trying to organize the new MediaNews bargaining unit in the East Bay (that prior posting).
But I float this item today for a different reason. It occurs to me that Hearst and MediaNews are moving toward a merger. That is entirely speculative on my part. I have no inside information nor would I share it if I did. In this case, however, being uninformed as to any future plans that may or may not exist, I feel not merely free but obligated to make the following observations, given that any such combination would immediately decrease my bargaining power:
Media consolidation is trendy as attested to by the FCC deliberations on cross-ownership;
Hearst and MediaNews began doing the corporate tango when Hearst provided financial backing for the latest MediaNews expansion;
In 1997, privately-held Hearst Corp. merged its smaller, television group into a larger publicly-traded television chain now known as Hearst-Argyle group (see timeline); and
A union of the papers that serve the East and West halves of the San Francisco Bay makes perfect corporate sense, insofar as the root definition of “corporate” is “united or combined into one” (definition).