Statement of Clint Reilly

June 1, 2000

Thank you for coming this morning.

We’re here today in the Julia Morgan Ballroom, and I’d like to point out that Julia Morgan was California’s first woman architect, who had her office here in the Merchants Exchange Building for 54 years.  From that office she not only designed Hearst Castle – but she designed the Hearst Building as well, at Third and Market where the Examiner was published for many years.

At the end of this historic newspaper trial I want to begin my remarks by answering a question I have been repeatedly asked over the past several months – “Why did you bring this lawsuit?  Was it so you could own a newspaper yourself?  Was it for the real estate?  Was it for political revenge against those who opposed your run for Mayor?”

The truth is, owning a newspaper did hold some appeal to me when that option was presented.  And obtaining a choice piece of real estate is always enticing.  And yes, they say revenge is sweet as hell.

But no, for those who assume these have been my motives – I’ll have to disappoint.

When I filed this lawsuit I had no thought of owning the paper – in fact, I brought my lawsuit before the Fangs were even given the Examiner.  After I filed the suit, it was the Hearst Corporation itself which asked me if I would buy the paper as a means of keeping it alive.  Almost immediately, we learned that Hearst had been dealing secretly with the Fangs and then signed an exclusive deal with them for their sham purchase.

This lawsuit is really about the evil of monopoly power.  Antitrust law is rooted in the principle that competition is good for consumers.  When consumers have more than one choice, prices are cheaper, and products are better made.  The same goes when the product is newspapers, especially here in our city.  Let me tell you a bit about why I care so deeply about this issue.

My family has been in San Francisco since before William Randolph Hearst and his father ever founded the San Francisco Examiner.  My Dad sold the Call-Bulletin and the News and the Examiner as a newspaper boy on Mission Street during the Great Depression.

I first appeared in the pages of the Chronicle and the Examiner as a newsmaker in 1968, at the age of 21, when I led a group of Seminarians in a controversial study exposing poverty and racism in San Francisco.  The Examiner of the day praised our report.  The Chronicle attacked it.  Two newspapers made a difference.

For twenty-five years I worked in politics as a campaign manager in California and here in the city, and I interacted intimately with papers as both a newsmaker myself and a representative of newsmakers.  I saw first hand how the philosophies, agendas, and biases of journalists, editorial boards and newspaper owners could dramatically affect news coverage and editorial opinion, particularly on political issues.  Two newspapers very often made a difference.

I strongly believe that newspapers have a dramatic impact in shaping public opinion on critical public policy issues.  Simply by choosing to cover or not to cover specific issues or candidates, the press has enormous power to frame civic debate, and to make or break elected officials, to elect or defeat political candidates. 

Here in San Francisco, for more than 30 years I have dealt with both newspapers, the Chronicle and Examiner, as a civic activist, a political candidate, and as a businessman.  And as a husband, father, and property owner, I have a deep stake in this city emotionally and economically.  Over the years I have not always agreed with our newspapers’ editorial positions, or their endorsements for political office.  My relationship with our two dailies has been far from a thirty-year love affair.

But I have often been very thankful for one thing.  When I disagreed with one paper, I had the other to turn to – and so did everybody else in San Francisco.  Above all, their competition protected us from the tyranny of ideas that the monopoly power of only one newspaper would hold over our city.

This lawsuit began as an antitrust trial and became a trial about the betrayal of the public trust.  Over the past month we saw stark evidence of journalistic ethics devoured by corporate greed.  We saw newspaper executives admit to horse-trading for political support for their merger from a Mayor.  We saw corporate executives consciously plotting to kill a daily newspaper.  We saw a publisher put on indefinite leave by his boss,  the Hearst Newspaper President whose own handwritten notes then confirmed that he too was intimately aware of the very horse-trading that led to the publisher’s demise.

We saw exposed a sham sale of the Examiner to a prospective owner who by his own account would reduce the historic Examiner newspaper’s size by half and its circulation by two-thirds, who would print no real Sunday newspaper, who would take away the workers’ union status, and who most certainly would fail after his $66 million subsidy from Hearst was exhausted.  What an ignominious death for the flagship paper of the Hearst Corporation, handing it over to an owner whose journalistic credibility has sunk so low that not a single journalist out of 210 at the Examiner would even make the choice to work there under that new ownership.

Why would two great newspaper companies stoop to such sordid tactics?  The answer lies in the books and records of the San Francisco Newspaper Agency.  By closing the Examiner and acquiring the Chronicle, the Hearst Corporation will make $120 million per year, and pay less than six times the annual earnings for a paper that will in fact be worth over a billion dollars on the day the transaction would close.

In short, this newspaper trial has been a story of the abandonment of the public trust.  Ironically, if Pulitzer gave awards for trials, this trial itself might qualify for an award for investigative journalism.

The editorial pages of our papers never cease their unremitting criticism of those in public life – nor would we want them to.  But let them also heed the Biblical admonition: “Judge not, lest you be judged.”  In order to have the credibility to judge, the press must have clean hands themselves.  The editorial credibility of the San Francisco Examiner has been fundamentally damaged, and cannot be restored by self-righteous editorials proclaiming innocence and attacking others – nor can it be resurrected by an in-house inquiry paid for by the Hearst Corporation itself.  The editorial fairness of the Examiner’s news coverage will not be restored without a thorough housecleaning at the highest levels of the paper.  And since the Hearst leadership in New York, including the President of Hearst Newspapers George Irish himself, clearly participated in blatant violations of journalistic ethics, that housecleaning should extend from San Francisco to New York. 

If this story has a lesson, it is simply that human beings and human institutions need checks and balances.  No one newspaper can be trusted to decide what is news -- or what is right.  That is why I believe the evidence of this trial proves we need two strong newspapers in San Francisco.

In 1970, Congress passed the Newspaper Preservation Act.  The purpose of this federal law was to preserve newspapers and allow two newspaper voices in cities across America.  In the thirty years since, there have been 28 Joint Operating Agreements, but 15 of those have resulted in the death of a newspaper.  Instead of protecting newspapers, the Newspaper Preservation Act has become a tool for publishers to close down newspapers, not protect them.  

In many cases, profitable newspapers have been shut, and their owners have been paid huge sums not to publish at all.  Monopoly newspapers are earning monopoly profits at the expense of readers, who are at the mercy of a single publisher’s news judgements and political viewpoints.

That’s why I’ve taken the steps I have, when no one else would.  That’s why I have spent nearly a million dollars of my own money on this public-interest lawsuit, and refused to settle for many millions more.  

If my lawsuit prevails, the original intent of the Newspaper Preservation Act can be revived – to protect two voices in a community – to provide checks and balances against editorial tyranny – and as Thomas Jefferson said, to maintain competition in the marketplace of ideas.

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