Gates lends money to MediaNews

A Toasted Postie in Florida sends this in:

Gates Foundation among MediaNews lenders (Aug. 21)

SEATTLE (AP) - The Bill & Melinda Gates Foundation was among a few dozen banks, insurance companies, mutual funds and others entities that loaned $350 million to MediaNews Group Inc. for its purchase of four newspapers from publisher McClatchy Co.
The Seattle-based Gates Foundation, the world's largest philanthropy with an endowment of about $30 billion, contributed an unspecified amount of money toward the transaction, according to an Aug. 8 filing with the Securities and Exchange Commission by MediaNews Group. Others listed as contributors include General Electric Capital Corp. and Blue Shield of California.
Spokeswoman Monica Harrington said she could not confirm how much the foundation had contributed to the loan. A message left with the foundation's investment team Monday was not immediately returned.
Jody Lodovic, president of Denver-based MediaNews, said he did not know how much of the loan came from the Gates Foundation, but was pleased it had contributed. "It seems like even new media people understand and believe in the value of traditional media, so we're certainly happy to see them participate," Lodovic said.
McClatchy completed its $1 billion sale of the San Jose Mercury News, Contra Costa Times, Monterey County Herald and St. Paul Pioneer Press earlier this month, finishing its disposal of a dozen newspapers picked up in its recent acquisition of Knight Ridder Inc.
Denver-based MediaNews, a privately held company headed by William Dean Singleton, bought the Mercury News and Contra Costa Times to establish itself as the largest newspaper publisher in the San Francisco Bay area. Hearst Corp. bought the Monterey and Minnesota papers but is turning both over to MediaNews in exchange for a stake in MediaNews' operations outside the Bay Area.
MediaNews already owns the Oakland Tribune and a cluster of suburban papers in the Bay Area. Its other properties include The Denver Post, The Salt Lake Tribune and The Detroit News.
The Gates Foundation awarded about $1.36 billion in grants last year, much of it for public health initiatives in developing countries. In the United States, its donations focus on education and technology in public libraries.
The foundation's loan to MediaNews is part of a broad investment portfolio designed to fund the endowment. The foundation's assets include more than $4 billion in stock in companies including oil behemoths BP PLC and Exxon Mobil Corp., club warehouse chain Costco Wholesale Corp., and pharmaceutical makers Merck and Co. and Schering Plough Corp., according to a recent SEC filing.
Most of the foundation's money came from donations of Microsoft Corp. stock from Bill Gates, the software maker's co-founder and chairman.
In June, billionaire investor Warren Buffett, the world's second-richest man behind Gates, announced that he would begin giving about $1.5 billion a year to the Gates Foundation, essentially doubling the pot of money the philanthropy doles out each year.

MediaNews eyes the Internet

Melanie Hauser passed this along about three weeks ago. Sorry ...

MediaNews looks to set standard for papers online (Aug. 1)
By John Simerman
CONTRA COSTA TIMES
MediaNews Group Inc., the pending owner of the Times, hopes to harness its newfound Bay Area newspaper dominance on the Internet with a regional Web site that aims to be a model for how old-guard newspapers can work and make money online.
Denver-based MediaNews and its owner, William Dean Singleton, are discussing a regional Internet collaboration among its 11 Bay Area newspapers and possibly its lone regional rival, the San Francisco Chronicle.
Joseph Lodovic, the company's president, told the Times last month that the company was in "very preliminary" talks with Hearst Corp., owner of the Chronicle and SFGate.com, about a joint Internet venture that could be run under the BayArea.com name.
It was not clear whether the Web site would replace any of the individual newspaper sites or direct Internet users to the existing sites.
Hearst has helped finance the MediaNews purchase of the Times, the San Jose Mercury News, the Monterey Herald and the St. Paul Pioneer Press in Minnesota from McClatchy Co., but it will not have any direct ownership of those papers. A Department of Justice decision Monday cleared the way for the sale later this week.
Singleton has noted the region's technology strengths and said there is "no better place in the country to come up with new ideas and new plans in melding online and print than in the Bay Area."
But Singleton has been reluctant to discuss details of those ambitions and was tight-lipped about his plans Monday, calling any talk about them "premature."
"I didn't say we didn't have a vision," Singleton said. "We haven't formulated it into a plan yet. We'll begin exploring those issues this week."
That kind of collaboration would be aimed at stanching the tide of readers who gravitate to Yahoo, Google News and other news aggregators that dominate the Internet market. A survey released Sunday by the Pew Research Center found that MSNBC, Yahoo, CNN, Google and AOL crush even the biggest national newspapers.
The same survey found that while newspapers' online editions have helped stem more severe losses in readership, they have not done much to add an audience or compete effectively with their online rivals. Very few people read the local newspaper online only, and when they do, they do not read very long, mostly scanning headlines.
That has made it difficult for newspapers to make money from online advertising. Just 5.5 percent of newspaper industry revenue comes from online sources, according to the Newspaper Association of America.
To draw more traffic, some newspapers have begun to team up with traditional online rivals and develop search engines that let readers easily link to related stories, pictures and video from outside sources.
Local news and information are not enough, said Greg Sterling, an Oakland-based media analyst.
"Google and Yahoo have conditioned people. They're overwhelmed by the amount of information online. Search engines have been the only way to manage information," he said.
"If newspapers in a local market can effectively do the same thing, they will have an opportunity really to generate revenue. I think now the recognition is they need to offer more value, better functionality, more content."
Ultimately, the goal is to entice readers and add to the "clicks" upon which ad sales are based.
Some publishers see a future in which readers make "micro-payments," a few pennies each time they click on a story, picture or video.
Ultimately, online newspapers will need more than one way to tease money from the Internet, said Bill Mitchell, online editor of the Poynter Institute, a Florida-based journalism think tank.
"The idea of news organizations coming to grips with the reality of their readers relying on a variety of news sources and figuring out a way to generate revenue from that reality seems to me to be smart on both counts," he said.
A collaborative Bay Area news site could be "far more comprehensive than anything provided by any one of the newspapers," said Mitchell.
It also may help cut costs, through economies of scale. The dark side, some fear, is that it becomes a justification for cutting back on newsrooms and competition among local papers.
"The question that's raised by the economies of scale is, what percentage of them would be poured back into the journalism, and what share would be saved for the owners?" said Mitchell.
Newspapers are also seeking more from the big Internet news sites.
Singleton acknowledged that MediaNews was in ongoing talks with Yahoo. Such a deal reportedly would package newspaper content from MediaNews and other newspaper companies; the papers could get a cut of the revenue from ads tailored to news searches.
Both Yahoo and Google have recently agreed to "pay-per-click" deals with the Associated Press and other big newspaper companies, marking a shift in how newspapers collaborate with the big Internet firms that have siphoned away readers and revenue.
Brian Nelson, a spokesman for Yahoo, declined to discuss the negotiations or the pay-per-click model. He said the company has long struck deals to drive more Web traffic to newspapers or other content providers, or for recognition alongside a story.
"Every deal is different and every partner wants something different," he said.