S.F. Chronicle Cuts Price of Paper to 25

The San Francisco Chronicle, accused in federal court of seeking a monopoly under new ownership, announced Thursday that it is slashing its newsstand price in response to tough competition in the city.

The reduction from 50 cents to 25 cents is designed “to make us more competitive with other newspapers,” said Patricia Hoyt, marketing manager for the San Francisco Newspaper Agency.

She said one factor was last month’s decision by the San Jose Mercury News to expand its San Francisco staff, publish a daily section devoted to the city and cut its San Francisco price from 35 cents to 25 cents.

News of the Chronicle’s action quickly reached the witness stand in U.S. District Court, where Clint Reilly, a former mayoral candidate, is suing to block Hearst Corp.’s purchase of the San Francisco Chronicle.

Under the proposed $660-million deal, Hearst would take over the Chronicle and sell its existing newspaper, The San Francisco Examiner.

Reilly contends that the acquisition of California’s second-largest newspaper would give Hearst an illegal monopoly, despite approval of the sale by the Justice Department’s Antitrust Division. The civil trial began Monday.

“This shows there’s some competition,” James Asher, a Hearst vice president who was in charge of the effort to sell the Examiner, said of the Chronicle’s price cut.

“Or a case,” replied Reilly’s lawyer, Joseph M. Alioto.

Reilly contends that Hearst and the Chronicle destroyed the prospect of head-to-head competition by preempting other potential Chronicle buyers and paying a local publisher to take over the Examiner in a deal designed to ensure the paper’s failure.

The trial already complicates Hearst’s plans to merge the staffs of the Chronicle and Examiner by August, when Ted Fang is to take over publication of the Examiner using a staff that has yet to be hired.

The two newsrooms were shaken further by Monday’s testimony by Examiner publisher Timothy White, who acknowledged offering Mayor Willie Brown favorable editorial coverage last August in exchange for Brown’s support of Hearst’s plans.