A federal judge late on Friday rejected a request for an injunction against the McClatchy Co. sale of three San Francisco Bay-area papers it acquired when it bought Knight Ridder Inc. this year.
Earlier this month, Clint Reilly, a former political consultant who owns a local real state investment firm, filed an antitrust lawsuit against MediaNews Group, Hearst Corp., Gannett Co. Inc. and Stephens Media Group.
Judge Susan Illston rejected the effort to block McClatchy's plans to sell the San Jose Mercury News, Contra Costa Times and Monterey Herald as part of a $1 billion deal that would place them in the California Newspaper Partnership, which privately held MediaNews Group controls.
Gannett and Stephens also have stakes in the partnership.
While there is a need to examine the consequences of the proposed sale further to ensure that no long-term harm will come to Bay Area residents, the transaction creates no pressing and imminent danger to plaintiff or the public that would justify blocking the newspaper sales, Illston wrote.
Reilly, who in 2000 tried unsuccessfully to block the Hearst Corp. purchase of the San Francisco Chronicle on antitrust grounds, argued the sale of the papers would hurt readers and advertisers by eliminating Bay Area competition.
The irreparable harm that Reilly alleges is neither immediate nor irreversible, and, while he has demonstrated that the MediaNews transaction must be carefully looked over, he has not demonstrated that he is likely to succeed on the merits, Illston wrote.
McClatchy, the second-largest U.S. newspaper publisher, agreed to sell Hearst the Monterey County Herald and Minnesota's St. Paul Pioneer Press, while the other two papers went to MediaNews. Hearst then planned to trade the Monterey and St. Paul papers to MediaNews for an equity stake in MediaNews' assets outside the Bay Area.