Hearst CEO Says He Knew Nothing About Editorial Offer to Mayor

Hearst Corp. CEO Frank Bennack Jr. testified Friday that he had no knowledge of an offer to give Mayor Willie Brown favorable editorials in the San Francisco Examiner in exchange for his support of Hearst’s purchase of the rival Chronicle.

“I was horrified,” Bennack said. “If true, it is clearly outside and contrary to our policies . . . and Journalism 101.”

Hearst is being sued by Clint Reilly, a former mayoral candidate, on antitrust grounds to block its purchase of the Chronicle and the subsidized transfer of the Examiner to a company set up by local publisher Ted Fang.

Critics of the deal have said Hearst executives knew last year about the offer to Brown by now-suspended Publisher Timothy White. Hearst officials also were accused of taking action against White only because he disclosed the offer publicly.

Bennack said he was unaware of the offer until White testified about it in court May 1. He said he would have disciplined White earlier if he had known about the publisher’s similar testimony in a deposition in December.

Brown has said he can’t recall whether such an offer was made.

The Chronicle and Examiner are jointly run, except for editorial functions, under a federal antitrust exemption. The owners of both papers want to terminate the joint operating agreement five years early.

On the trial’s first day, White testified that he made the offer to Brown. He later recanted in a written statement to the media, saying the editorial independence of the paper was never in jeopardy. No attempt has been made in court to retract or contradict his testimony.

Bennack also testified about his negotiations for the Chronicle, saying Hearst’s first offer of $565 million was met with the Chronicle Publishing Co.’s counteroffer of $700 million. The companies eventually settled on $660 million.

Bennack said he plans to improve the Chronicle editorially, using increased profits he anticipates from shedding the Examiner, which has about one-fourth as many readers as the Chronicle.

“I think we have the opportunity to give this region the kind of world-class newspaper it is entitled to,” he testified.