EXAMINER SALE CREATES NEW TENSION FOR S.F.

Head-to-head competition will pit a big company against a family

Some said The Chief would be spinning in his grave.

Nonetheless, the Hearst Corp. announced March 17 that it had elected to sell the San Francisco Examiner, the founding property of the mighty $10 billion communications company, in order to speed its acquisition of the San Francisco Chronicle and the shutdown of the San Francisco Newspaper Agency, the corporate edifice of a joint operating agreement.

The buyer – as predicted in these quarters last August, when Hearst first put the Examiner up for sale – is the Fang family of San Francisco, publishers of free bi-weekly and thrice-weekly newspapers in San Francisco and the Northern Peninsula. Since its founding in 1979, the Fangs' publishing empire has grown from one paper – the national Asian Week -- to "the largest non-daily publishing company in the United States," with a combined weekly circulation of 379,000.

Terms were not disclosed, though it has been widely reported that Hearst will make a "significant financial commitment to the continued publication of the Examiner" over the next three years. The companies will go through a four-month transition period, after which the Fang family will shift the Examiner to morning.

In its attempt to shut down the Examiner, Hearst was under fire from a variety of quarters, ranging from the U.S. Justice Department to the California attorney general's office, to both the city attorney and district attorney, not to mention a lawsuit filed by a former mayoral candidate. The sale to the Fangs will probably make all those lawyers go away and allow Hearst to finally – after eight months of waiting – take over the Chronicle.

The Fangs are a political force in San Francisco and have been a thorn in the side of the city's two dailies for at least a decade. Aside from lawsuits regarding monopoly pricing on local retail advertising and the Examiner's bid for city and county government advertising, the Fangs' paper – The Independent -- has persisted in making sport of its newfound sibling. Examiner Executive Editor Phil Bronstein, for instance, is frequently referred to in print as "Mr. Sharon Stone," a reference to the actress who is Bronstein's wife.

The editorial pages and news pages of The Independent have a harmony unknown at most newspapers. The politicians who are lambasted in The Independent's editorial pages fare no better in the paper's news pages.

The acquisition of the Examiner puts the Fang family in the hot seat. The Examiner will be the largest daily paper owned by minorities; it will be one of the few papers going head-to-head with another daily in a metropolitan city, and it will attempt to preserve that second paper. They tried something similar at St. Louis' Globe-Democrat in the ’80s and it didn't work (nor did the St. Louis Sun).

Has the Hearst Corp. chosen a deliberately weak partner to continue with the Examiner? In other words, is this a sham to skirt the lawyers and lawsuits?

No. There is no question that the Fangs will be able to produce the Examiner for less money than what it cost Hearst to publish the paper. First and foremost, the Fangs will operate without unions and they will be able to roll much of the paper's back office, printing and distribution into their existing infrastructure.

The various editions of The Independent seem to have a good retail base and better-than-average classifieds; assuming that the Fangs offer advertisers combination rates to be in both The Independent and the Examiner, those healthy incomes should continue.

Despite the fact that the Fangs have indicated that it will be an honor to publish the Examiner, they seem to have forgotten that the growth of the paper a century ago was built on the racism against Chinese of the era.

This leads me to think that the one spinning in his grave isn't William Randolph Hearst – the guy we always knew as "The Chief." It's the patriarch of the Fang family who's spinning.

– David M. Cole

Inside ...

• Audit Bureau task force to review 50 percent rule, standards for pricing
• Tribune's stealth $8 billion deal for Times Mirror on target
• Much work in store to set up new Examiner in the next four months
• Women cite nature of newspapering as one reason for success
• All-'Net supplement Access gives publishers new revenues
• Spate of paper sales doesn't spell doom
• Persons

From NEWSINC., March 27, 2000, Copyright © 2000, The Cole Group. All Rights Reserved.