Seattle newspapers arbitration proceeding postponed

With little explanation, the Seattle Times Co. and Hearst, owner of the Seattle Post-Intelligencer, have postponed a private arbitration proceeding that was to begin Monday, April 9. The new start date will be Monday, April 16. The trial-like arbitration is to settle a Hearst lawsuit regarding the two papers' federally sanctioned joint operating agreement (JOA).

The office of mediator Larry Jordan, Judicial Dispute Resolutions in Seattle, declined to comment. Hearst in New York confirmed the delay but declined to elaborate. A Seattle Times Co. spokesperson could not be reached, but company President Carolyn Kelly was quoted in the Times as saying the delay involved "some scheduling issues and complexity."

Here's the P-I report of this. Earlier, I wrote about the key issues at stake and about how the market value of the Times could be shrinking.

The JOA, which was signed in 1981 and implemented in 1983, is essentially a legal monopoly allowed by the Newspaper Preservation Act of 1970 and was approved by the U.S. Justice Department. The privately held and locally controlled Times and Hearst's P-I maintain separate newsrooms and compete for readers. But the Times gets a greater share of profit and handles the business side – selling advertising and printing, circulating, and marketing both papers.

The Times Co. has been trying since 2003 to shut down the P-I, claiming that the fading circulation of its smaller partner and editorial rival is a financial burden on The Seattle Times. In 2003, it invoked a JOA provision requiring Hearst to negotiate an end to the agreement and close the P-I if the Times Co. could prove three consecutive years of losses under the JOA. Hearst disputed the Times' loss claims and sued in King County Superior Court to block the P-I's closure.

Pretrial disputes dragged on until last year, when both parties agreed to a confidential, secret, binding arbitration. In addition to asking arbitrator Jordan to reject the Times loss claims, Hearst is expected to ask Jordan to rule separately on a claim that the Times favored itself under the JOA, costing the P-I millions of dollars in unrealized revenue.