Continuation of The Battle Of the Bay   

Scott Newhall quit the Chronicle in 1971. People said the JOA had taken the fun out of it for him. His replacement was one of the Chronicle heirs, a distinctly uneditorly party named Richard Thieriot, and here we enter what in most Chronicle memories plays as the keep-your-head-down-and-try-not-to-think-about-it years, with the guiding light coming not from a brilliant wacko but instead from the designated scion in a family generally regarded as eccentric Republican skinflints. The Chronicle had been founded in the 19th century by DeYoungs--the brothers Charles, Michael and Gustavus started the Daily Dramatic Chronicle in 1865 (the title was prophetic; Charles was shot to death 15 years later by the son of a politician his newspaper had assailed in print)--and when ownership passed in the early 1900s to the four DeYoung daughters, the family tree crowded up with their married names: Cameron, Tucker, Tobin, Thieriot.

Richard Thieriot was Michael DeYoung's great-grandson. When he arrived as editor, the publisher was still Richard's father, Charles DeYoung Thieriot, whose thinly smiling countenance still gazes out disapprovingly from an enormous portrait on the Chronicle boardroom wall. After his father died in 1977 Richard took over as publisher, too, which from the newsroom perspective seems to have replaced a mean, cheap, politically conservative boss with a cheap, politically conservative boss of largely undetectable personality. (The Chronicle was locally famous for its endorsements, which always appeared to have been shipped in en masse from the Twilight Zone: amusing liberal-leaning news content, deeply Democratic town, and every November you'd look for the CHRONICLE ENDORSES column and see this top-to-bottom lineup of right-wing Republicans.) Richard Thieriot rarely spent much time in the newsroom; his appointed overseer was Bill German, a veteran of the Newhall era, whose title was executive editor but whose job required a great deal of what one Chronicle writer described to me as "getting in the cage with Dick."

Since the metaphorical Richard Thieriot cage also contained the rest of the Chronicle heirs, who controlled the fortunes of the paper through both a seven-member board and what appeared to be a lot of heated family argument, this was regarded around the newsroom as deeply unpleasant duty. German was a gifted, incisive editor when he had actual copy in his hands, but the principal message he carried out of the cage, the sort of leitmotif of the post-wacko paper, was: No. No, too much money. No, we can get that from the wires. No, let's wait to see if the New York Times thinks it's a story. In a sense the Send it to the Chronicle insult--Jason Robards playing the Washington Post's Ben Bradlee as Bradlee dismisses one exceptionally silly news feature proposal by snorting, "Send it out to the San Francisco Chronicle"--was misdirected, as German likes to point out: By the time this line was being repeated in movie theaters around the country, the Chronicle had given most of Bob Woodward and Carl Bernstein's Watergate stories almost exactly the same play the Post did. German is right about that; the paper wasn't silly anymore. It just wasn't very good. From time to time a new hire would arrive and take uneasy measure of the newsroom pallor: reporters writing novels at their desks, minimal enterprise, listless local government coverage, and the big No from the carpeted office in the corner. "On my first day, in my perky little AP way, I looked at the man at the next desk and said, 'What do you do here?' " Susan Sward told me; she'd come to the paper in 1979 from the AP bureau in Sacramento. "And he said: 'I'm waiting to retire.' "

Nonetheless the circulation figures stayed high for the Chronicle, propped firmly in place by the JOA. The Chronicle's average daily circulation hovered around 500,000, while the Examiner struggled to maintain the 150,000 or so that seemed to be the most an afternoon paper could manage here even if it was subsidized by its own competition. (The Chronicle and Examiner shared a single circulation director, under the elegantly self-defeating terms of the JOA; technically this person was an employee of the San Francisco Newspaper Agency, which meant he was instructed, as former circulation director Steve Hearst put it, "to make sure one didn't grow at the expense of the other.") The readership territory spread out around the nine Bay Area counties and considerably beyond, as far as the circulation department was concerned: Every morning Chronicles were trucked east to Nevada and flown west to Hawaii, where it was a point of company pride to have the paper available at the finer Honolulu newsstands.

But that didn't mean the Chronicle covered the nine Bay Area counties, nor even that a working Chronicle reporter could necessarily have located them all on a map. Susan Sward has described the institutional ethos, during her inaugural years at the Chronicle, as Bored Urban Chic: We write about The City, which is all any sensible person could possibly wish to read. Herb Caen was the Chronicle's anchor, for most people the merriest and most important read in the morning paper; his column created a mythic, gossipy, insular little town in which the suburbs--distant places like Contra Costa County's Pleasant Hill, or San Jose, which was growing so fast that its population would eventually overtake San Francisco's--were reserved for the occasional doofus joke. There were newspapers out in those suburbs, but they were rarely seen to matter, except as local shoppers or Chronicle farm clubs, and in the corporate offices at Fifth and Mission nobody seemed to be paying much attention to the growth itself, which was remaking the economic future both of the Bay Area and of its newspapers. The San Francisco Newspaper Agency, to put it in newsroom parlance, was missing the story.

"Slow down, John," David Rounds said from the rear seat of the black Mercedes in which three of us, me and two mid-level officials of the Evil Empire, were driving around the back roads of Contra Costa County. Rounds, a tall pale-haired man whose long legs made him look somewhat cramped even in the back of such a fancy car, is vice president for circulation for the Contra Costa Newspapers. John Armstrong, who was driving, is editor of the Contra Costa papers, and as he slowed down Armstrong nodded for my benefit toward the hills that stretched out to either side of his car.

These were bare hills, still, and quite beautiful in the Tuscan colors of northern California autumn: dry golden grasses, weathered fences, live oak trees, birds. Some beehive boxes stood unattended in an open field. In the distance, across the crest of the farthest hill, a convoy of construction vehicles stretched in silhouette against the sky. I was trying to come up with a word besides "gash" to describe the newly cut pit just visible at the far curve of the road, where a backhoe was spewing and lengths of thick sewage pipe lay stacked on the flattened dirt, but Armstrong had a more practical view of things. "Think of Danville," Armstrong said helpfully, which I knew, having spent some time earlier in the day with his newspapers' chief market researcher, meant: Think upscale suburban, college educated, both parents work, kids play team sports, Dad commutes, Mom is 35 to 54 years old and drives a Suburban (this is detailed market research; Knight Ridder paid for it). "Think of that mother with two point five kids," Armstrong said. "Lot of soccer moms in Explorers."

"Suburbans," I said.

"Suburbans," Armstrong said. He drove the Mercedes in silence for a moment, contemplating the imaginary newspaper readers crowding up both sides of the road. Rounds pointed out from the back that the plans for this particular section of the county call for 14,000 new residents, which all of us agreed would be hell on the local freeway but was the kind of number circulation directors pay a lot of attention to. "They're going to care about schools," Armstrong said, envisioning the newspaper pages opened in front of 14,000 breakfasts. "They're going to care about the environment. They're going to care about traffic, they're going to care about crime. But in addition to that, these are people who are going to want something more sophisticated."

They were going to want, in other words, The Only Paper You Need. This is the marketing slogan now driving the Contra Costa Newspapers, which have managed while the Chronicle's back was turned to morph from sprightly but unthreatening little suburban papers into big good-looking dailies with sharp color and strong graphics and bylines out of Washington and Moscow and Tokyo. Some of these bylines now go on to read Knight Ridder Newspapers in tiny typeface, a detail that is likely to escape most of the morning BART commuters with their papers on their laps; all they see is a perfectly grownup-looking page one, probably a national story in the lead, one or two more Washington or international datelines somewhere on the page, and inside the kind of metro stories that suggest a staff doing conscientious local city council and zoning board duty: Antioch-Area Golf Course Proposal Put on Hold. Pinole Is Used to Study Hercules Police Merger. The papers have as much heft as the daily Chronicle; they use color photography more lavishly on every section front; they come with separate sections for business and features; they produce sober, beautifully illustrated pullouts on national topics like the Summer Olympics and the Starr report; and their sports staff follows major Bay Area teams around the country and pays serious attention to local high school athletics.

It's enough to give a Chronicle editor heartburn, which is a source of considerable pleasure for John Armstrong, who keeps on his office wall a large lapel button that displays the Chronicle logo beneath a bright red slash and the capitalized letters WE'RE GONNA EAT THEIR LUNCH. What looks at first to be a company poster on the opposite wall reads, "San Franciscans Don't Get It," but the epigram turns out to be lifted for amusement purpose from the competition: Armstrong had it copied from a Chronicle newsrack card, where the phrase was being used as part of the Chronicle's ad campaign for its specialized new Contra Costa edition.

"It's a slogan I happen to agree with," Armstrong told me when we were back in his office at the Contra Costa Times, the flagship paper in the four-daily chain. He meant San Franciscans Don't Get It, which Armstrong had noticed me dutifully copying into my notebook, but he also meant The Only Paper You Need and We're Gonna Eat Their Lunch--it's been a slogany season at the Contra Costa Newspapers, where every reported slump in the Chronicle's local circulation is regarded as uplifting news. The Chronicle's much-vaunted Contra Costa County bureau, with its advertising campaign promising "news tailored to your hometown," is shrugged off by Armstrong as a hapless last-ditch effort by the bully across the Bay: San Franciscans, you will recall, Don't..et cetera. "They're late to the party," Armstrong said. "They're late to a market they've ignored forever. Now that the market's grown up, they want a piece of it."

A brief geographical digression is in order here, to explain more fully both the regional war maps and the significance of the territory at stake. San Francisco, as most people are aware, is positioned directly between the Pacific Ocean and a huge but narrow-mouthed saltwater bay. The city itself occupies the hilly northern end of one of the two coastal peninsulas that face each other at the entrance to this bay, which accounts for the fine urban vistas--grand expanses of water all over the damn place--but gives the resident population nowhere to go, should it wish to grow or give its kids a lawn to play on or shell out less than eight zillion bucks a month in rent, except out. Out means south, down the Peninsula (it's capitalized in the local argot) through Palo Alto and on toward San Jose; or north, across the Golden Gate Bridge and up into Marin County; or east, across the Bay Bridge, where the two big counties that fan back from the bridge's eastern end are called Alameda and Contra Costa.

Some of the most enticing Bay Area newspaper demographics, by which we mean not only large numbers of reasonably well-off people but more importantly growing numbers of reasonably well-off people, are in those last two counties. Growth studies around here are loaded with promising data about this particular swath of the East Bay: During the 1980s, for example, Contra Costa County added 103,000 new jobs, which put its job growth rate at 51 percent, more than twice that of the overall Bay Area economy. And in Alameda County, patches to the southeast along the Contra Costa border are among the fastest-growing population centers in northern California. It was the particular genius of Dean Lesher, the man who built the Contra Costa Newspapers chain, to see these demographics coming; indeed, Lesher had enough to do with creating these demographics, rampant pro-development boosterism and so on, that his newspapers came in for some vigorous drubbing even as they were raking in very considerable quantities of money. (The late C.K. McClatchy, of McClatchy Newspapers, once singled out the Lesher newspapers as one of the three worst chains in the United States. "The primary purpose of these newspapers," McClatchy declared in a 1988 lecture on the ways ownership can affect the quality of newspapers, "is to be ever-faithful cash cows for the owners.")

The Lesher corporate offices fired off an angry retort to that McClatchy remark in the form of a three-page small-type advertisement in Editor & Publisher, but on the evidence it would be hard to disagree with the cash-cow part. By the time Dean Lesher died in 1993 he had lived to be 90 and had made a Forbes magazine wealthiest-persons-in-California list, on which Lesher was ranked number four: estimated net worth, $360 million. He was a Maryland-born Harvard Law School graduate who made his newspaper money by homing in first on small, unglamorous California towns--the Merced Sun-Star, in the San Joaquin Valley, was Lesher's initial newspaper purchase--and then on small, unglamorous California towns that were about to make the transformation to San Francisco suburb. Eleven years after the 1936 opening of the bridge linking San Francisco to the East Bay, Lesher bought the Walnut Creek Courier-Times, a bi-weekly in a Contra Costa County town where walnuts really were the principal cash crop. Over the postwar decades the walnut groves gave way to suburban housing, and the Contra Costa Times, as Lesher renamed his little Walnut Creek paper, became the largest-circulation daily in a chain of Northern California newspaper acquisitions that at one point included 90 different publications, from suburban dailies to small-town weeklies to free shopping inserts.

Some of Lesher's newspaper purchases were less successful than others; his efforts to build a strong regional group around Sacramento never quite coalesced, for example, because he couldn't get his hands on the papers in certain key towns. But in Contra Costa County, where two commuter highways funneled people and jobs and developer money out to the land around Walnut Creek, Lesher bought up nearly every local paper inside county borders. His local dailies, weeklies and shoppers kept a firm lock on newspaper advertising in this increasingly robust market, and by the '80s Lesher's Contra Costa newspapers had begun attracting suitors, none more keenly interested than P. Anthony Ridder, the future CEO of Knight Ridder Inc.

Tony Ridder had put in his serious training years in newspaper publishing less than an hour's drive south of Contra Costa County, down at the San Jose Mercury News. Ridder had started in San Jose in 1964, when the Mercury and News were still separate morning and evening Ridder papers; he was only 24 then, an heir apparent moving his way along in the chain his great-grandfather Herman Ridder had founded at the turn of the century. During his first years out of college Tony Ridder had worked at company papers in Pasadena, California, and Aberdeen, South Dakota, and when he was posted to San Jose, the Mercury and News were still the lackluster dailies in a small city that considered itself the poor relation to the famous place up north. ("Even here," Tony Ridder told me, 'The City' meant San Francisco.")

But Ridder stayed on in San Jose, becoming business manager and eventually publisher of the Mercury and News operation. And as the city flourished--not the capital-C city, but the city of San Jose, which had the good fortune to be located at one edge of the fledgling industrial area nicknamed "Silicon Valley"--so did the papers. In 1977, three years after Ridder Publications merged with Knight Newspapers, the new Knight Ridder headquarters in Miami sent San Jose one of its heavyweights, the former executive editor of the Miami Herald, Larry Jinks. With Jinks as editor, Ridder as publisher and the San Francisco Chronicle still gazing at its own navel--"I wish I really knew why we were so damn stupid about San Jose," the Chronicle's Bill German told me somewhat mournfully--the Mercury and News coalesced into what just about everybody around here agreed was the best paper in Northern California, lavishing attention and editorial resources on the high-tech phenomenon, which of course turned out to be, as they say, a story with legs. There was serious foreign and investigative reporting, too; the first of two Pulitzers came in 1986, for reporting from the Philippines (the second was to come four years later, for coverage of the Loma Prieta earthquake), and the paper opened bureaus in Mexico City and Tokyo, a signal of its swelling ambitions. And as the Merc's circulation increased--200,000 in 1976 to 260,000 a decade later--the paper's readership area began pushing north up both sides of San Francisco Bay.

To the west, that meant steady encroachment up the Peninsula, into territory that had traditionally belonged to the Chronicle. To the east, it meant bumping up into southern Alameda County, where the Mercury News' circulation quadrupled over that same decade. And although he told everybody who asked that he had no interest in attacking the Chronicle head-on in San Francisco, Ridder had been keeping a close eye both on Lesher's Contra Costa papers, which he coveted for Knight Ridder, and on the neighboring Alameda County chain that belonged to the other irascible old man of East Bay publishing, Lesher's arch-rival, Floyd Sparks.

Between the two of them, Dean Lesher and Floyd Sparks had carved up most of the East Bay's local newspaper readership--and fairly neatly, at that, although Sparks and Lesher were said to loathe one another and perpetually snapped at each other's heels at the border towns. Sparks' empire was smaller than Lesher's, four dailies and a semiweekly shopper. Ridder liked them as potential buys, but not quite as much as he liked the Lesher papers; on their southern end the Sparks papers competed directly with the Mercury News, for one thing, inviting antitrust trouble. And Lesher's territory had more readers with the kind of income and education levels that look great on demographic brag sheets. ("These are the kind of people advertisers lust after," says one former Contra Costa Times editor. "These are people who can walk into the Jaguar dealer and write a check.") Sparks had a few pockets of the Jaguar people, but his papers also serviced a lot of the grittier working-class neighborhoods of Alameda County, and when Sparks finally sold his chain in 1985 to Garden State Newspapers, the cost-slashing group owned by W. Dean Singleton, Ridder shrugged off the loss and redoubled his attention to the elder Dean.

"I would go up and meet Dean Lesher from time to time, as the publisher, without any corporate people," Ridder told me. "He'd talk about his plans to sell. He would tell me that if he ever got ready to sell, he'd contact me. And I would just stay in touch with him."

In 1986 Tony Ridder joined the Knight Ridder corporate operation in Miami, but his interest in the Contra Costa papers never flagged. The word "synergy" was not yet in vogue among newspaper people, but that was more or less what Ridder had in mind: a profitable Knight Ridder-owned chain in Contra Costa County, a profitable Knight Ridder-owned paper in San Jose, and between the two a pooling of resources that might make more money for both even though Singleton's Alameda papers formed a kind of down-market buffer in the middle. "I knew enough about newspapers, and enough about markets, to think we could all work together," Ridder said. "We could sort of take one plus one, and get it to add up to three."

In 1989, when he was 87 years old, Lesher appeared finally to have made up his mind. He called Tony Ridder in Miami, Ridder said. "And Dean says, 'Tony, I've decided to sell the paper.' Just out of the blue. 'I've decided to sell the paper. And you need to come out right away.' He wanted a bid from us in a week or something."

It was a terrible time for a rushed bid; a board meeting was coming up, Ridder had a thousand things to do, and he pleaded with Lesher for a delay. "But he said, 'Tony, I'm sorry. That's my deadline.' " So Ridder collected a half-dozen corporate guys, worked up a plausible purchase proposal, and flew out to Walnut Creek to spend the whole day talking to Lesher and studying the numbers. "The next morning Dean says, 'I need to talk to you alone,' " Ridder said. "He said, 'I couldn't sleep last night because I kept thinking about what life would be like after I sold it.' And he said, 'You know, Floyd Sparks died six months or so after he sold the papers.' He said, 'I'm convinced he died because he sold the papers. I'm afraid if I sell it, I'm going to die.' "

Actually Floyd Sparks had hung on for three years after selling his papers--Sparks died of cancer in 1988, at the age of 87--but Lesher's distress was palpable, Ridder recalled. Ridder tried to assure Lesher that Knight Ridder would welcome his involvement even after a sale, but that wasn't enough: "He said, 'No, I wouldn't have total control, it wouldn't be the same.' So we packed up and went back to Miami. And that was the end of that."

Dean Lesher never did let go of his newspapers. It was his widow, Margaret, and the Lesher trustees who finally clinched the sale, in the summer of 1995, after a prolonged in-house drama that included inquiries from the New York Times Co., Dean Singleton, Central Newspapers, and a group of Contra Costa Times editors who tried to buy the papers themselves and were left convinced that the deal had been greased for Knight Ridder from the start. "Knight Ridder was my first choice," says George Riggs, who has been publisher and CEO of the Contra Costa Newspapers--now organized as the Contra Costa Times, the Valley Times, the San Ramon Valley Times, the West County Times, and a one-region-only daily Contra Costa Times insert called the Ledger Dispatch--since Lesher's death in 1993. "When I first told the board it was time to sell, I said, 'I think Knight Ridder is far and away the best potential buyer.' "

The reasons should be apparent to anyone, Riggs says: generous offer, highly reputable newspaper chain, and the powerhouse potential of a Contra Costa Newspapers-Mercury News alliance. This is the synergy of which people now speak with such reverence, and news coverage has something to do with it--the Contra Costa papers surely do look more comprehensive with those far-flung Knight Ridder stories out front. But when Tony Ridder talks about adding one plus one to get three, he has more in mind than joint reporting projects or shared news budgets; he's also talking about how much money you can make when numbers that once looked just okay can suddenly be added to each other to produce an entirely different effect. Here's one example: In 1995, as the Knight Ridder purchase was winding up in Walnut Creek, the Contra Costa papers were running at about 190,000 total daily circulation. The Mercury News was at about 280,000, and climbing. Add those totals together, draw a single gerrymandered boundary around both readership areas, jog the western border east and south to exclude the lumpen cities serviced by Singleton's Alameda papers, and you have suddenly produced a new creation entitled the San Jose-Contra Costa Market, which comes with some very sexy Bay Area statistics when the calculating is done the right way.

To those of us who grew up around here, the concept of something called a San Jose-Contra Costa Market is mildly jarring: One is a former scruffy town way down south, one is suburbs in the golden hills, and on a bad freeway day it takes an hour and a half to make the passage in between. But the synergy people think bigger than that. They see housing developments at one end, housing developments at the other, and the aforementioned freeway sprouting phylogenetically similar telecommunications and software companies to either side. More to the point, they see one massive if weirdly shaped chunk of spending money. The city of San Jose is in Santa Clara County, which the high-tech industry has lofted to demographic prominence; there's plenty of poverty in Santa Clara County, but there's also enough money and new business to pull up those averages, and it's the big numbers that turn the heads of ad customers, both national and classified, who can see the usefulness of paying for one profligate group of newspaper readers instead of two or three.

Try this: Of the six most populous counties around the Bay, the San Jose-Contra Costa Market accounts for more than half the total population, more than half the total retail sales, and--marketspeak alert!--57 percent of Households w/EBI $50,000+. That's Effective Buying Income, for those of us who don't know advertising shorthand, and the statistic is from the current San Jose Mercury News & Contra Costa Times market presentation book, a spiral-bound volume whose illustration displays a Merc and a Times folded side by side but sort of overlapping, if you see what we mean. It's an expensive-looking booklet, on thick shiny pages, and the subtext is evident in its every graphic and demographic chart: "Separating the truth from the fog." "The Heart of High Tech." "The Industrial Exodus to Contra Costa County."