Though terms were not revealed, the CHRONICLE reported a figure of $660 million. Other observers put the price higher, with a consensus on the price being closer to $850 million.

The companies said that this was the 12th joint operating agreement (JOA) to be terminated in the last 15 years. The CHRONICLE has a morning circulation of 482,268 and the EXAMINER an afternoon circulation of 114,776; the papers edit a combined Sunday paper that has a circulation of 605,356. Twelve JOAs remain throughout the United States, including the one in Seattle, where Hearst is a partner.

Hearst executives have said that in the event that no "qualified" buyer is found for the EXAMINER, they will merge the two papers. Hearst and Chronicle executives have told the staffs of the two papers that all employees will keep their jobs. Hearst said that in the event the EXAMINER were sold and the new owners elected to not to offer some EXAMINER employees jobs, those workers would be offered jobs with the CHRONICLE. Hearst has said it has made no decisions on top editing positions for either the CHRONICLE or a combined EXAMINER-CHRONICLE.

Executives from both companies said that they have notified the U.S. Department of Justice regarding the end of the joint operating agreement and the potential sale of the EXAMINER or merger of the two papers. To meet Justice Department criteria for a merger, Hearst must aggressively attempt to sell the EXAMINER.

Hearst and Chronicle have been in a joint operating agreement since 1965, with each company owning 50 percent of all assets and the San Francisco Newspaper Agency, which has provided circulation, production and advertising sales operations for the two papers. Hearst has also said that the Agency's approximately 2400 workers would keep their jobs.

Hearst has retained the New York investment banking firm Veronis Suhler & Associates Inc. to find a buyer for the EXAMINER. News stories in both the CHRONICLE and EXAMINER have quoted industry executives as saying that Hearst is selling only the nameplate, the circulation list and the staff of the EXAMINER, not its 50 percent stake in the joint operating agreement. Frank Bennack, chief executive of Hearst, told reporters that his company's acquisition of the CHRONICLE effectively ends the joint operating agreement.

Based on those terms, the two likeliest buyers -- Knight Ridder Inc. of San Jose and MediaNews Group of Denver -- told reporters they weren't interested in the EXAMINER.

P. Anthony Ridder, chief executive of Knight Ridder (which publishes the SAN JOSE MERCURY NEWS and the CONTRA COSTA TIMES in the Bay Area), told EXAMINER reporters, "If Hearst would sell their position as it exists today, where they have 50 percent of the JOA, then we would be interested. If they're only going to sell their home delivery circulation list, which is very small, and the name, then we would not be interested and I doubt anybody else would be either."

William Dean Singleton, the chief executive of MediaNews (which owns Alameda Newspaper Group, publishers of six dailies in the Bay Area), told a CHRONICLE reporter he wasn't interested in the EXAMINER. "Emphatically, no," Singleton said.

Industry analysts point out that a qualified buyer for the EXAMINER would have to show an ability to print and distribute the paper, which would be extraordinarily expensive for a start-up.

Chronicle Publishing Co. announced in May that it would seek buyers for all its assets, including its 106,000-circulation TELEGRAM & GAZETTE in Worcester, Mass., and its 50,000-circulation PANTAGRAPH in Bloomington, Ill. The company also owns San Francisco NBC affiliate KRON-TV and Bay TV, a cable channel offered on many systems in the Bay Area, as well as ABC affiliate KAKE-TV in Wichita, Kan., and NBC affiliate WOWT-TV in Omaha, Neb. and two book publishing companies. The investment bank Donaldson Lufkin & Jenrette continues to handle the sales of those assets.

SFGate.com was originally conceived as an ISP bulletin board in 1993 and was originally a partnership between the CHRONICLE and the EXAMINER, managed by the Newspaper Agency. The site now receives more than 15 million page views per month and is ranked the most popular content site in the Bay Area by Media Metrix and the fifth most-popular newspaper site nationally by PC Meter. SFGate.com merged with KRON-TV's web site in 1997 and the EXAMINER left the partnership and started its own web site, though it continued to provide information to SFGate.com.

The CHRONICLE was founded in 1865 as the DAILY DRAMATIC CHRONICLE by the teen-age brothers Charles and Michael de Young. Their heirs have owned and operated the paper ever since. A paper with a checkered career, the CHRONICLE was once considered the "NEW YORK TIMES of the West," when it was edited by Paul Smith in the '30s and '40s. By the '50s, the paper's circulation had dropped precipitously and a new editor, Scott Newhall, was named. Newhall, the scion of a Southern California ranching family, emphasized the irreverent and features. Newhall promoted columnists such as Herb Caen and Pauline Phillips, who wrote under the name "Dear Abby." The CHRONICLE gained on morning circulation leader, the EXAMINER, to such an extent that the Hearst and the de Young family entered into discussions regarding a possible combined production facility that resulted in the 1965 agreement.

The EXAMINER, started June 12, 1865, is the foundation of the $10 billion Hearst Corp. Acquired by mining millionaire George Hearst in 1880, the paper was turned over to his son, William Randolph Hearst, in 1887. Young Hearst built the paper up from 5500 circulation to 55,000 in two years. Today's EXAMINER is the result of five mergers: the SAN FRANCISCO CALL and the EVENING POST merged in 1913; the resulting CALL & POST merged with the SAN FRANCISCO BULLETIN in 1929 to become the CALL-BULLETIN. The SAN FRANCISCO NEWS, and the CALL-BULLETIN merged in 1959 to become the NEWS CALL-BULLETIN, which Hearst folded into the EXAMINER in 1965 when the JOA was approved.

Using experience gained at the EXAMINER, William Randolph Hearst moved to New York in 1895 and -- with money given to him by his mother -- purchased the NEW YORK JOURNAL. Here, Hearst pioneered tactics that lead to the phrase "yellow journalism." California and San Francisco remained close to Hearst's heart and he built a retreat in Central California he called San Simeon. From what the family called "the ranch," Hearst would issue editorial edicts to his nationwide group of papers. Following Hearst's death in 1951, the company, which remains family owned, diversified throughout media, specializing in magazines (including REDBOOK, ESQUIRE and COSMOPOLITAN, it is providing production and circulation services for the newly launched TALK magazine) as well as radio and television stations (today it owns a controlling interest in the publicly traded Hearst-Argyle Television Inc., which owns 22 television stations and manages Hearst's seven radio stations). In addition, Hearst owns interests in the cable TV channels ESPN, Lifetime and A&E. Its newspaper holdings include the 550,000-circulation HOUSTON CHRONICLE, the 218,000-circulation SAN ANTONIO (Texas) EXPRESS-NEWS, the 196,000-circulation SEATTLE POST-INTELLIGENCER and seven other dailies.

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This special NEWSINC. NEWSWIRE was written by David M. Cole and distributed exclusively to subscribers of NEWSINC. by The Cole Group, which publishes NEWSINC. and THE COLE PAPERS and is consultants to newspapers and magazines worldwide. To receive more information about The Cole Group, send e-mail to: info@colegroup.com.

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