What does it say about the dinosaur newspaper industry that the world's richest man is investing in it? According to an Aug. 8 filing with

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Bill Gates, Newspaper Guy

His foundation underwrites Bay Arena news deal.

What does it say about the dinosaur newspaper industry that the world's richest man is investing in it? According to an Aug. 8 filing with the Securities and Exchange Commission, MediaNews Group Inc. has a $597.3 million line of credit from the Bill & Melinda Gates Foundation and other members of a lending consortium to finance its purchase of several San Francisco Bay Area newspapers. The filing does not specify exact amounts invested by the foundation or others consortium members which include banks and insurance companies. MediaNews, which publishes the Detroit News, Denver Post, and other dailies, recently bought four papers from the McClatchy Co. for $1 billion. The deal was part of McClatchy's larger takeover of the now-defunct Knight-Ridder chain, buying 32 papers and selling off 11 of them. (KR was the minority, 49.5 percent, owner of The Seattle Times, a stake now held by McClatchy, which also owns the Tacoma News Tribune, Bellingham Herald, Tri-City Herald and The Olympian). The Gates/consortium financing enabled MediaNews to complete its purchases of two of the largest Bay Area papers, the San Jose Mercury News and Contra Costa Times. The Hearst Corp., owner of the Seattle P-I and the San Francisco Chronicle, also jumped into the deal. It now has a $299 million equity investment in MediaNews, according to the SEC, in return for a 30 percent stake in the company. It's an unusual alliance among publishers who compete on the same turf, but both corporations could benefit by squeezing out smaller area publications—assuming the coziness passes antitrust muster. For the Gates Foundation, it's just another day at the bank. It currently has $4 billion in holdings, according to a separate SEC filing the foundation made this week. The holdings include a $312 million stake in petroleum giant BP (and $217 million in Exxon), $259 million in Costco, $222 million in Waste Management and a new, $32 million stake in Wal-Mart. The lingering question: Does it matter how you make it, if you give it away?   

 
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