Newspapers seek to rebut lawsuit over sale of Mercury News

NEWSPAPERS SEEK TO REBUT LAWSUIT OVER SALE OF MERCURY NEWS
[SOURCE: San Jose Mercury News, AUTHOR: Pete Carey]
Three newspaper companies on Tuesday mounted an attack against a San Francisco investor's antitrust lawsuit to block McClatchy from selling four former Knight Ridder newspapers, and MediaNews from acquiring them. The four papers are the Mercury News, the Contra Costa Times, the Monterey County Herald and the St. Paul Pioneer Press, which are being acquired by the Denver newspaper company in a complex $1 billion deal. Clint Reilly, a real estate investor, former campaign consultant and mayoral candidate, is seeking a court order to block the deal, contending that it is structured to give MediaNews, Hearst and MediaNews' California Newspapers Partnership ``market power, if not monopoly power, over the newspaper business in the entire Bay Area'' in violation of federal antitrust statutes. The newspaper companies portrayed the harm to Reilly as a subscriber and advertiser in the Bay Area papers as "trivial" compared with the damage to them if Reilly succeeds in delaying the deal. "Simply put, the newspapers will languish under temporary ownership," the Denver-based newspaper company said. MediaNews said a delay could force it to reprice a $350 million loan commitment at a cost of $12 million, and may even jeopardize the company's ability to complete financing for the acquisition of the four papers. McClatchy said it is paying $163,000 a day on loans it took out to complete its purchase of Knight Ridder, and needs the $1 billion from the sale of the four papers to help pay down $3.08 billion in loans. It also expressed concern over the possibility of having to negotiate labor agreements at the Mercury News on behalf of MediaNews while the deal is in legal limbo.
http://www.mercurynews.com/mld/mercurynews/business/15124840.htm

* McClatchy Facing $163,000 Daily Bill if Newspaper Sale Is Blocked
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