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Pelosi seeks relief for struggling newspapers

WASHINGTON – In an effort to help struggling newspapers stay in business, House Speaker Nancy Pelosi is asking the Justice Department to broaden its view of media competition when reviewing any merger proposals.

Pelosi sent a letter to the Justice Department Monday saying any antitrust concerns that arise from proposed mergers between newspapers should take into account online news sources and nearby daily and weekly papers “so that the conclusions reached reflect current market realities.”

Hearst Corp., the publisher of Pelosi’s hometown paper, The San Francisco Chronicle, has warned it may have to close the paper if expenses are not reduced quickly or a buyer doesn’t step forward. The Chronicle lost more than $50 million in 2008.

Pelosi’s letter doesn’t cite any particular merger efforts at the Chronicle, and an aide said the letter was designed to be broader than one newspaper or market. In any merger, the Justice Department would be concerned about a reduction in competition.

The speaker said that given the dwindling number of newspapers in the country, a House Judiciary subcommittee would hold a hearing soon to discuss the trend’s implication for antitrust policy.

Michael Cabanatuan, a Chronicle reporter and president of the Northern California Media Workers Guild, said workers at the Chronicle were glad Pelosi was thinking about them, but did have concerns about the ramifications of any potential merger.

“We don’t know that simply merging papers and allowing the antitrust changes would guarantee decent-sized news staffs and quality journalism,” Cabanatuan said.

He acknowledged that a merger could improve profits, but that wouldn’t necessarily mean that San Francisco Bay area customers were better served.

“We certainly believe the best option is to have as many independent voices as possible,” he said.

Any kind of deal raising antitrust issues would likely involve the MediaNews Group, which owns upward of a dozen papers surrounding the Chronicle, including the Oakland Tribune, the Contra Costa Times and the San Jose Mercury News.

Over the years, staffing at those papers has been cut substantially and those papers have reduced costs by sharing news content.

Cabanatuan said that the Chronicle and MediaNews newspapers share many of the same values, but MediaNews has been a traditionally much leaner operation.

A call seeking comment from MediaNews Group officials at the company’s Denver headquarters was not immediately returned.

Pelosi’s five-paragraph letter said that consideration of the issues she raised would be consistent with antitrust enforcement, “and the result will be to allow free market forces to preserve as many news sources, as many viewpoints, and as many jobs as possible.”

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