Hearst sells San Francisco Examiner

By Michael Warren

Associated Press Writer

SAN FRANCISCO - It looks like San Francisco will keep its two major newspapers.

The Hearst Corp. sold the San Francisco Examiner to the owners of a free city newspaper on Friday, clearing the way for Hearst's purchase of the San Francisco Chronicle.

The two papers, longtime rivals, have a joint operating agreement under which they have split profits for the last 35 years. Hearst last year announced its intention to buy the Chronicle and merge the two daily papers if a buyer could not be found for the afternoon Examiner.

That had raised antitrust concerns, which are expected to be satisfied with the sale of the Examiner.

"Our deal today is the fulfillment of a dream for my family, for myself, for my late father," said Ted Fang, who will be the publisher of the new Examiner.

Fang said he would switch the Examiner back to mornings when the two papers become fully independent in August, after a four-month transition period, and compete head-to-head with the Chronicle. He also said the Examiner will be published six or seven times per week and will not be free.

Neither Hearst nor Fang would disclose the sale price, or say whether some profit-sharing agreement was part of the deal. Hearst, which is buying the Chronicle for $660 million, said it would make a "substantial financial commitment to the continued publication of the Examiner."

The Chronicle reported today that the purchase price was "nominal" and that Hearst would pay the new owners as much as $25 million a year for three years.

The sale is expected to close by March 30, but it will be "business as usual" for the next four months, Examiner Publisher and CEO Tim White told a crowd of reporters and editors.

The crowd was mostly silent as the announcement was made. One employee shouted, "I'd like to see a show of hands of anyone who wants to work at the new paper." No hands were raised.

The more than 600 reporters and editors at the Chronicle and Examiner, as well as employees of the San Francisco Newspaper Agency, which oversees the joint operating agreement, will continue working for the Hearst Corp. No employees will be required to work for the new owners.

The sale does not include the Examiner's building or printing presses. Fang said he will secure new offices in downtown San Francisco, and will either print the paper on the presses used by his San Francisco Independent or secure more capacity elsewhere.

The deal also includes the Examiner's library, computer system, delivery trucks and newsracks, as well as www.examiner.com, the Sunday Examiner magazine and sponsorship of "Bay to Breakers," a race that draws tens of thousands of runners each May.

But finding staffers able to compete against Hearst could be a problem for Fang, whose Independent newspaper has been attacking the Hearst Corp. for months, even running cartoons lampooning Examiner Executive Editor Phil Bronstein and his wife, actress Sharon Stone.

Bronstein said it was too early to tell how many current Examiner newsroom employees would work for the Fang-owned Examiner.

"I have no idea," Bronstein said. "Not a clue."

Fang said he would pay well for top talent, but he did not intend to offer union contracts, as the Examiner does now.

"We plan to commence an aggressive search locally and nationwide to put together a new staff for the new Examiner," he said. "We're looking for people who want to make history in this industry."

Fang said his father, John T.C. Fang, fled Communist China and arrived in San Francisco with $200 in his pocket in the 1950s. Along with his brothers James and Douglas, Ted Fang will now run the nation's largest minority-owned daily newspaper.

It was the second major newspaper deal announced this week. On Monday, the Tribune Co., publisher of the Chicago Tribune, announced it was acquiring the Times Mirror Co. and its flagship Los Angeles Times in a $6.46 billion deal. The move would end 118 years of control of the Times by the Chandler family.

Hearst had been seeking a buyer for the Examiner since Aug. 6, when it announced its purchase of the Chronicle.

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