L.A.'s newspaper market in transition.

Never mind the musical chairs at the Los Angeles Times. Pending ownership changes at two of the three biggest papers in L.A. County could make for a sea change in the local newspaper market.

It might even result in one company owning nearly all the suburban newspapers in L.A. - thus creating a challenge for the Times.

Dean Singleton, whose MediaNews Group bought the San Gabriel Valley Tribune, the Pasadena Star-News and the Whittier Daily News last year, was considered as of late last week a likely bidder for both the Los Angeles Daily News and the Long Beach Press-Telegram.

While parties close to the sale are not identifying possible bidders, analysts say that the opportunistic Singleton may use one or both papers to dramatically raise his L.A. profile.

"The Daily News fits in well with Singleton's clustering of properties," said John Morton, media analyst and president of Morton Research. "If he gets the Press-Telegram as well, he would have a strong hold on the L.A. suburban market."

Experts say that the changes in L.A. are part of a nationwide trend in the industry of "clustering" papers geographically to reduce costs and boost profits.

"The technique newspaper owners have been using recently is to group papers geographically so they can consolidate mechanical facilities and management," said Mel Opotowsky, managing editor of the Riverside Press-Enterprise.

"I believe that this is a motivating factor behind Knight-Ridder putting the Press Telegram up for sale. It had no synergy with other local papers," he said.

Carol Weber, director of publications for Knight-Ridder Inc., said the company is selling the Long Beach paper because it did not meet its profit expectations.

In addition, the company is moving into larger markets and recently purchased four Wait Disney Co. papers, including the Kansas City Star and the Fort Worth Star-Telegram. To cover the $1.65-billion debt incurred by the sale. Knight-Ridder announced in June it was selling the Press-Telegram as well as four other publications.

"While we regret to let the paper go, it did not post the profit margins we needed to see," Weber said.

Knight Ridder closed bids for the Press-Telegram in September. Weber and Press-Telegram general manager Raymond MacLeon say an announcement regarding the buyer is close.

"There are a lot of interested companies since good-sized papers like this don't come on the market often," said Douglas Arthur, a Morgan Stanley analyst. He estimates that the paper will fetch at least $100 million.

Meanwhile, the Woodland-Hills-based Daily News was recently put up for sale following the death of owner Jack Kent Cooke. It had been on the block in 1994 - only to be taken off months later, reportedly because none of the offers passed muster.

One of the challenges confronting the new owner of the Daily News will be the Times, which publishes a Valley edition that provides the kind of community news that used to give the Daily News a niche audience.

The Dally News has limped along for several years, cutting back in staff and operations to improve the bottom line. Most recently, the paper made the pages smaller to save newsprint costs. Readers were told the change was made to make the paper "easier to handle."

"The paper is much more profitable now," Morton said. "But the sales price will be a lot less than what is on the book. It will be under $200 million - possibly a lot under."

Cooke acquired the paper in 1985 for about $176 million.

Several names have surfaced as possible bidders, including Singleton, A.H. Belo, the Dallas-based chain that recently purchased a controlling interest in the Riverside Press-Enterprise and even Rupert Murdoch's News Corp.

Also believed to be interested is Daily News Publisher Larry Beasley, though it's not known if he has made progress in lining up an investment group. Beasley did not return calls seeking comment.

"Dean Singleton is the most logical candidate," said Morton. "He already has papers to the north. This purchase would fit in well with the clustering he is developing."

The Cooke estate is now considering offers for the paper. No closure date for bids has been set. One of the attorneys handling the sale declined all comment.

The impact of consolidation can be mixed for advertisers, said Charles Baker, an analyst with Salomon Brothers, On the one hand, advertising is sold as a block to papers in the group - increasing saturation. But that can also lead to higher costs.

"We'll probably see a model develop similar to Contra Costa's," he said, referring to a chain of suburban papers in the San Francisco Bay area. "Advertising runs across all of the local papers in the group. It's the opposite of zoned advertising (where ads just run in community sections)."

As for readers, the number of editorial voices may be diminished, he said. A chain of small to mid-size suburban papers, for example, might share the same reporter to cover the Dodgers or county government. Editorials might be written at the flagship newspaper of the chain and distributed to the others.

"Trends in ownership and management in the newspaper industry are changing," said Bryce Nelson, chair of the graduate school in journalism at the University of Southern California. "Chains are buying up more papers and traditional newspaper families are pulling their assets out of the industry. As the shuffling continues, paper owners logically want their return to be greater and their investments to be worth more. The changes we're seeing in Southern California reflect this goal."