W.Va.’s Gazette publisher returning control of Daily Mail to prior owner to resolve DOJ suit

DOJ unveils deal to end suit vs. W.Va. publisher

CHARLESTON, W.Va. — The publisher of West Virginia’s largest-circulation newspaper will return control of the rival paper it bought in 2004 to its previous owner under a Wednesday proposal meant to settle a U.S. Justice Department antitrust lawsuit triggered by the purchase.

The settlement would also have the Daily Gazette Co. provide financial incentives to Denver-based MediaNews Group once it resumes independent control of the Charleston Daily Mail.

The proposed deal, filed in U.S. District Court, would restructure the long-standing joint operating agreement that allowed the Daily Mail and its larger rival, The Charleston Gazette, to share such costs as printing and delivery.

Among other provisions, the settlement calls on the papers’ joint operations to offer half-off subscriptions to new Daily Mail subscribers for at least six months. It bars any attempt to discriminate against the Daily Mail in the papers’ joint circulation or advertising sales efforts.

“Today’s settlement resolves the department’s antitrust concerns and allows readers to continue to have a choice between two independent local daily newspapers,” Christine Varney, Assistant Attorney General in charge of the Antitrust Division, said in a news release.

MediaNews has overseen the Daily Mail’s news and editorial content, under a management agreement reached when it sold the newspaper. Wednesday’s proposal would expand that oversight to include such areas as newsroom staff size, hiring and pay.

“We will have more say in things going forward,” MediaNews Group President Joseph J. Lodovic IV said Wednesday. “It helps to ensure our continued involvement, which was always our desire.”

It also gives the former owner a chance to buy a future stake in the newspaper. The Justice Department sued over the $55 million purchase in 2007. U.S. District Judge John T. Copenhaver Jr. can sign the proposed settlement following a 60-day public comment period, “upon a finding that it serves the public interest,” the Justice Department release said.

“The Daily Gazette Co. is pleased that the litigation with the antitrust division of the Justice Department has been resolved through settlement, with no finding or admission of liability on the part of the Daily Gazette Co.,” its president and publisher, Elizabeth E. Chilton, said in a statement.

The proposed settlement comes less than a week after Affiliated Media Inc., the holding company for MediaNews Group, announced plans to file for Chapter 11 bankruptcy protection.

Under the “prepackaged” plan, already approved by lenders, the company’s management, newspaper operations, employees and vendors won’t be affected by the restructuring, MediaNews Group Chairman and CEO William Dean Singleton said at the time of the filing. He is the chairman of The Associated Press board of directors.

The plan aims to reduce the company’s debt and allow it to emerge quickly from bankruptcy. The Denver-based company owns 54 daily newspapers and more than 100 non-daily newspapers, Web sites, television and radio broadcasters.

The Charleston Gazette is West Virginia’s largest newspaper, with an average daily circulation of 40,671 according to September figures from the Audit Bureau of Circulation. The September numbers put the Daily Mail’s circulation at 19,225.

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Associated Press Writer Tom Breen contributed to this report.