Judge temporarily blocks sale to Hearst

A U.S. federal judge blocked the Hearst Corp.'s dlrs 660 million purchase of the San Francisco Chronicle, a century-long rival of Hearst's Examiner.

Hours after the U.S. Justice Department approved Thursday's sale, U.S. District Judge Vaughn Walker issued a temporary restraining order against the deal. Walker said serious questions had been raised about "the continuing viability of the Examiner as an independent newspaper" under new ownership.

Hearst announced March 17 that it was transferring ownership of the Examiner, its 120-year-old flagship newspaper, to owners of the Independent, a local free-distribution paper. Hearst said it agreed to subsidize the owners with dlrs 66 million over three years after fruitless contacts with 80 potential buyers, including major newspaper publishers in the U.S.

But political consultant Clint Reilly, who sued to stop Hearst from buying the Chronicle, argued that the subsidy was far too small to keep the Examiner alive and would leave Hearst with a local newspaper monopoly.

After a 40-minute hearing, Walker said Reilly had raised a serious enough issue to delay the purchase until April 13, when a hearing is scheduled on a preliminary injunction that would stay in effect until the suit went to trial.

The Chronicle is the largest newspaper in Northern California and the 13th-largest in the U.S., with circulation of 456,000 compared to the Examiner's 107,000.

The two newspaper deals had been scheduled to close Friday, but Walker said the Chronicle and Examiner have been publishing under a joint operating agreement since 1965 and would suffer little hardship by waiting another two weeks.