Details regarding The Seattle Times and Seattle Post-Intelligencer settlement are to be released

The Committee for a Two-Newspaper Town has persuaded the two companies to release key documents.
The Committee for a Two-Newspaper Town has persuaded the two companies to release key documents.

In a move that could clarify who won last week's cliffhanger settlement of the joint operating agreement (JOA) fight between Hearst Corp. and the Seattle Times Co., the companies agreed late Monday, April 23, to release previously undisclosed details of the settlement to a Seattle-based citizens' group. Hearst, owner of the Seattle Post-Intelligencer, and the Times Co., which owns The Seattle Times, also plan to make public related documents from their last JOA revision in 1999, outlining how they structured their online news operations and providing for the first time information about a side deal that gives Hearst the first bid if the Times Co.'s majority owners, the Seattle-area Blethen family, decide to sell their stake in the company. The Committee for a Two-Newspaper Town, a group that opposes the Times Co.'s efforts to shut down the P-I and an intervener in a lawsuit filed by Hearst to block the shutdown, said it will get the documents Tuesday and release them to the public. Jim Lobsenz, an attorney for the committee, said the organization's lawyers had been negotiating for the documents with the Times and P-I since the settlement announcement last week. The committee is seeking the information to decide whether to proceed with a legal challenge of the 1999 amended JOA, which it thinks is anti-competitive and in violation of the state of Washington constitution. The committee is scheduled to argue the case before King County Superior Court Judge Greg Canova on July 20. In addition to a pledge by Hearst and the Seattle Times Co. to make the settlement documents available, "We have been led to believe that there is no agreement to shut down either paper," Lobsenz said. But he said the Committee wanted "to avoid the mistake of accepting that representation at face value without examining it closely." Hearst and the Times Co. had originally agreed to hand over the settlement documents to the committee but only if they were kept secret. "We refused to be a party to any agreement to hide the facts from the public," said Lonsenz. "We urged the papers to simply give us as much information as they possible could." Lobsenz declined to speculate on what action the committee will take until it has had a chance to examine the documents. "It seems to me they are almost certain to affect things in some way," he said. "We just don't know what way that will be." Hearst and the Times Co. have been battling through the state court system since April 2003, when Hearst sued in King County Superior Court to block the Times from shutting the P-I. Under the JOA, the two papers are edited separately, but the Times handles printing, distribution, and marketing for both papers. If one paper loses money for three consecutive years, it can move to end the JOA and shut down the other paper. Times officials have said circulation losses at the P-I had caused the Times to lose money under the JOA from 2000 to 2002. Under the previous agreement, if Hearst voluntarily shut the P-I, it would receive 32 percent of Seattle Times profits until 2083. But Hearst said it wanted to keep operating the P-I, and it challenged the validity of the Times loss claims in the lawsuit. It also charged that the Times mismanaged the non-news operations of the JOA, costing the P-I millions of dollars in damages. The two companies took their fight behind closed doors last year, agreeing to binding arbitration before former Superior Court Judge Larry Jordan. They were scheduled to begin a final showdown – a private trial, in essence – when they reached their settlement April 15. Under the settlement, Hearst will pay the Times Co. $25 million to drop efforts to shut down the P-I until at least 2016. The Times Co. agreed to pay Hearst $49 million to end the lawsuit and give up any claim to future Times profits if the P-I is closed. While Hearst and the Times Co. made public the amended JOA last week, they balked at disclosing many details, touching off widespread speculation over who was actually the winner of the dispute. In addition to making public new details from last week's settlement, the 1999 deal between Hearst and the Blethens could shed light on the relationship between the two companies. Both are privately held and rarely disclose financial information. The existence of the arrangement between the Blethens and Hearst was apparently a key demand by Hearst but became known only through documents disclosed during Hearst's lawsuit. A Times Co. spokesperson said the company would have no comment until the settlement documents were turned over to the committee. A Hearst spokesperson could not be reached for comment.


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