News & Views from 465 California Street

Hearst & History

Clint Reilly
Aug
14
2007

In 1887, The Hearst Corporation was born with William Randolph Hearst’s purchase of the San Francisco Examiner. That small investment is now a sprawling international empire. Today, the Hearst Corporation owns 14 daily newspapers including the San Francisco Chronicle, a chain of Hearst Argyle television stations, a thriving magazine company, internet investments, 20% of ESPN, and stakes in A&E and Lifetime cable television. The company generates huge profits.

In 2006, the Hearst Corporation officially cut the ribbon on its new headquarters – Hearst Tower in New York City. The New York Times architectural critic Nicolai Ouroussoff wrote that “this 46-story tower may be the most muscular symbol of corporate self-confidence to rise in New York since the 1960′s, when modernism was in full bloom and most Americans embraced technological daring as a sure route to social progress.” Hearst Tower was designed by British Architect Sir Norman Foster who is responsible for such global icons as the Hong Kong Shanghai Bank Building in Hong Kong, the Reichstag renovation in Berlin, and the British Museum in London.

William Randolph Hearst himself had a strong interest in architecture and real estate. He worked closely with California’s first female architect, Julia Morgan, to build the Hearst Castle, his renowned estate in San Simeon.

Julia Morgan had her offices at the Merchants Exchange Building in San Francisco for 45 years. I own the Merchants Exchange Building where Hearst was a frequent visitor to Morgan’s office during his heyday. Julia Morgan designed many buildings for Hearst, including the Hearst Building at 3rd and Market Streets in San Francisco, once home of the Examiner, and the Herald Examiner office in downtown Los Angeles.

In 1999 the Hearst Corporation bought the San Francisco Chronicle and closed the Examiner. I filed an anti-trust lawsuit asserting that this transaction lessened competition and created a daily newspaper monopoly for the Hearst Corporation in San Francisco. In that suit, Hearst scored a phyrric victory. Federal Judge Vaughan Walker declared the Chronicle/Examiner purchase legal. But during an embarrassing trial for Hearst, The Examiner publisher was fired for acknowledging that he traded the paper’s editorial endorsement in the mayoral election for the Justice Department’s approval of the Chronicle purchase. Walker called the Hearst Corporation’s activities “malodorous” and accused top Hearst Executives of not telling the truth. The most important impact of the case was that the San Francisco Examiner survived. Today the Examiner is owned by Denver billionaire, Philip Anschutz, who publishes the Examiner as a tabloid six days per week.

In 2006 I filed a second anti-trust suit against the Hearst Corporation. My suit accused Hearst of trying to jointly operate with MediaNews, owner of every paid circulation daily newspaper in the Bay Area except the Hearst Chronicle. As a strong advocate for newspaper competition, I opposed efforts by the Hearst Chronicle to combine national advertising sales, distribution, and Internet sales with their only Bay Area competitor. I felt these actions were preludes to creating one Bay Area newspaper partnership that controlled news gathering and ad sales for daily newspapers. The purpose of my lawsuit was to ensure that we will not have one company or one partnership owning every paid subscription daily newspaper in the Bay Area. Fortunately that will not happen. The lawsuit was settled before trial when the Hearst Corporation agreed to sever all connections with Media News in the Bay Area and to compete vigorously.

Recently I read a story in the business press that the original New York Times Building in New York City was sold. It seems that the New York Times, like the Hearst Corporation, is constructing a new Headquarters building designed by their own star global architect Renzo Piano, which will open later this year. Hearst and the New York Times will both have signature high-rises on the New York skyline. Hearst is known for its Tower. The New York Times is known for the quality of its journalism.

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