MediaNews, Hearst and Clint Reilly Should Not Be Allowed to Keep Their Secret Settlement a Secret

[courtesy of California Progress Report]

By Peter Scheer
Executive Director
California First Amendment Coalition

News organizations are notoriously bad at covering news stories in which they are participants. Recent examples include the Wall Street Journal, whose top editors knew about Rupert Murdoch’s offer to purchase Dow Jones (owner of the Journal and related businesses) for days before the news was made public--not by the Journal, but by CNBC, a competitor.

In California, the Hearst Corporation, owner of the San Francisco Chronicle, and MediaNews Group, owner of all Bay Area daily newspapers except the Chronicle, recently reached a settlement in an antitrust suit that had been brought against them by Clint Reilly, a San Francisco politico and businessman. The settlement was announced in dueling press releases in which lawyers for the litigants gave their respective, and often conflicting, accounts of what they had all agreed to.

The MediaNews and Hearst reporters assigned to the story dutifully reported the parties’ self-serving characterizations of the settlement, with Reilly’s lawyer claiming a huge victory that would block Hearst from investing in MediaNews’ California businesses and stop both companies from collaborating to cut delivery costs and sell ads online, and Hearst and MediaNews’ lawyers arguing that they had agreed to nothing that they hadn’t already decided to do (or refrain from doing) for reasons independent of the antitrust case.

Confused readers, wondering which side is right, looked for quotations from the settlement, but in vain: In a stunning display of chutzpah (or was it just blindness to irony?), the parties had decided to keep the settlement itself secret--even as they issued statements to the press describing what the settlement “means.” The press, I’m sorry to say, went along with this charade. The newspapers didn’t demand a copy of the settlement, so far as I know; they didn’t write about the fact that it had been withheld (other than to mention, in passing, that it was a “confidential” document); they didn’t report on whether the settlement had been given to the federal judge in the antitrust suit or to the Justice Department’s antitrust division (whose review of MediaNews’ 2006 acquisitions from McClatchy Company is still open).