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Sale of San Francisco papers surprises experts

By Paul Elias
The Associated Press

	Phil Anschutz
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But in an era where two-newspaper towns are rarities and considering the money-losing Examiner's diminished significance under the tenure of its current owners, Florence Fang and her family, analysts doubted the newspaper could compete effectively in a city dominated by the San Francisco Chronicle. The deal was announced Thursday.

Since taking over the historic Examiner, the Fangs have fired most of the newspaper's staff and transformed it into a free publication distributed at streetside news racks.

"It's not surprising that the Fangs wanted to sell," newspaper analyst John Morton said. "What is a surprise is that someone would want to buy it."

"As an economic investment it doesn't make any sense," Morton said. "You'd do better to go out and buy a (certificate of deposit)."

	Florence Fang

Denver newspaper mogul William Dean Singleton was more blunt. "Phil is a friend so I hate to say this, but I wonder if he had a senile moment or something," said Singleton, who owns 49 dailies including the Daily News in Los Angeles. "One of the rules of living in Colorado is that you never bet against Phil Anschutz, but this one just blows my mind."

Anschutz is paying $20 million for the Examiner and The Independent, a profitable neighborhood giveaway paper, as well as Grant Printing, where the papers are produced, according to a source close to the deal who spoke on condition of anonymity.

Anschutz's holding company owns interests in about 100 companies in a range of industries, including railroads, real estate, oil ventures and professional sports.

An oil and gas billionaire by 1982, Anschutz moved into real estate and railroads, picking up the ailing Denver & Rio Grande Western Railroad and, in 1988, the Southern Pacific Railroad.

Anschutz created SP Telecom as a data-transmission company, installing fiber-optic cable along right-of-way property adjoining Southern Pacific's 18,000 miles of tracks. In 1995, he spun off SP Telecom, renaming it Qwest Communications International. He took it public two years later, keeping 84 percent of the company.

In 2000, Qwest acquired US West, a Baby Bell providing local phone service to 14 Western states, including Washington. Qwest's stock soared during the telecom boom, but the bottom fell out and Anschutz has since sold about $2 billion worth of Qwest stock, whittling his stake to about 16 percent.

This is Anschutz's first foray into publishing.

Robert Starzel, a corporate attorney and an Anschutz confidant, was named chairman of the new publishing group, the SF Newspaper Co.

"We are here to announce a seismic shift in Bay Area journalism," Starzel said at a news conference yesterday. "Phil Anschutz is a long-term investor who wants to strengthen and build the Examiner and the Independent newspapers."

Some 220 workers, 75 of them Examiner employees, will be affected by the sale, but the new owners said they haven't determined if any layoffs will come with the ownership change.

The notoriously publicity-shy Anschutz didn't attend the news conference. He will become just the fourth owner of a paper made famous by William Randolph Hearst, who took control in 1887 after ostensibly winning it on a bet.

Hearst established the Examiner as one of the country's most flamboyant papers. It thrived until switching to afternoons as part of a profit-sharing agreement with the San Francisco Chronicle in 1965. The paper's circulation dropped from 303,000 in 1965 to 96,000, when Hearst turned over the paper to the Fang family in November 2000 in a deal that helped Hearst gain antitrust approval of its $660 million purchase of the much-larger Chronicle.

Material from the Los Angeles Times is included in this report.

Copyright © 2004 The Seattle Times Company