SAN FRANCISCO, Aug 6, 1999 The Hearst Corporation and The Chronicle Publishing Company jointly announced today that agreement had been reached for the acquisition by Hearst of the San Francisco Chronicle, a morning newspaper published and distributed in the San Francisco Bay Area. The transaction, which is structured as an asset purchase for cash, also includes the acquisition by Hearst of "SF Gate," the Bay Area's No. 1 Web site for online news, information and entertainment.
The announcement was made jointly by Frank A. Bennack, Jr., President and Chief Executive Officer of The Hearst Corporation, and John B. Sias, Chairman and Chief Executive Officer of The Chronicle Publishing Company.
Hearst also announced that it has engaged an investment banker, Veronis, Suhler & Associates Inc. of New York City, to seek a buyer for the San Francisco Examiner, a six-day afternoon newspaper owned by Hearst. Since 1965, the Examiner and the Chronicle have been printed and distributed under a joint operating agreement (JOA) between Hearst and Chronicle.
If a qualified buyer is not found, Hearst stated that it would combine the Examiner with the morning Chronicle.
The parties noted that the San Francisco JOA is the 12th of these arrangements to be terminated in the last 15 years. Terminations of JOAs have occurred in cities such as Knoxville, Nashville, Columbus, Pittsburgh, Miami, St. Louis and, earlier this year, Chattanooga. The parties noted also that they have apprised the Antitrust Division of the U.S. Department of Justice of these planned transactions, and will make the pre-merger filings required by federal law.
Hearst said that this investment in the San Francisco Chronicle and "SF Gate" is both an affirmation of its belief in the City of San Francisco and a continuing opportunity to be of service to the Bay Area community.
Following the transaction, Hearst said, all of the San Francisco Chronicle newspaper employees and all employees of the San Francisco Newspaper Agency will be offered continued employment. If the Examiner is combined with the Chronicle, Hearst will also offer continued employment to all of the employees of the Examiner. If the Examiner is sold, any employees not offered employment by the buyer will be offered continued employment by Hearst at the Chronicle.
The San Francisco Chronicle, with a circulation of 482,268 daily, is the largest newspaper in northern California and the second largest on the West Coast. It was founded in 1865 by Charles and Michael deYoung and has been owned and operated over the succeeding 134 years by their heirs.
William Randolph Hearst founded what is today The Hearst Corporation in 1887 when he assumed control of the San Francisco Examiner. For the last 112 years, the Examiner has been continuously published by Hearst. It currently has a circulation of 114,776 daily. Hearst and Chronicle jointly produce and distribute the San Francisco Sunday Examiner & Chronicle, which has a circulation of 605,356.
Under the terms of the joint operating agreement, since 1965 Hearst and Chronicle have jointly owned all of the assets used to produce and distribute the newspapers. In addition, the parties created the San Francisco Newspaper Agency to act as agent on behalf of both companies and to perform all business functions of the newspapers, including circulation, advertising sales, printing, distribution and personnel. The news and editorial departments of both newspapers have remained entirely separate and have been independently operated.
The San Francisco Bay Area is one of the most competitive media markets in the United States. The 11 county San Francisco DMA contains 18 daily newspapers and 15 Sunday newspapers. In addition to newspapers, the media rich Bay Area has 20 television stations and 72 radio stations.
CONTACT: The Hearst Corporation, New York
Debra Shriver, (212) 649-2461
or The Hearst Corporation, San Francisco
Paul Luthringer and Jay Silverberg, (415) 356-9648