Newspaper watchdog is examining newly released Seattle Times and Seattle Post-Intelligencer documents

Redactions are a potential issue for the Committee for a Two-Newspaper Town.
Redactions are a potential issue for the Committee for a Two-Newspaper Town.

Seattle's long-running newspaper war drew another step closer to a conclusion Tuesday, April 24, when the Seattle Times Co. and Hearst Corp., owner of the Seattle Post-Intelligencer, made public more documents detailing last week's settlement of their legal fight over their joint operating agreement (JOA). The agreement won't be finalized until the two companies swap cash, with Hearst coming out ahead by $24 million. Under terms of the settlement, the payments must be made by Aug. 15, but a spokeswoman for the Times Co. said no date had been set. The document release covered terms of the JOA settlement, most of which were disclosed last week, and two related documents – a 1999 agreement allowing the P-I and Times to set up their own Web sites under the JOA and a separate agreement, also struck in 1999, that gives Hearst the right to bid first for controlling interest in the Times Co. now held by the Seattle-area Blethen family. Kathy George, an attorney for the Committee for a Two-Newspaper Town, a citizens group that had sought the settlement documents, said her group planned to review them. The group is scheduled to make its case in King County Superior Court on July 20 that the JOA is anti-competitive and violates the state constitution. "We're going to be carefully reviewing all these agreements before we decide what to do next," said George. She said the Committee would also press the Seattle Times Co. and Hearst to make available parts of the settlement that were redacted from the public versions of the documents. Perhaps the most critical piece that was omitted from the settlement documents the papers released was a breakdown of the Times Co.'s $49 million payment to Hearst. The settlement simply says the payment covers Hearst's agreement to give up a 77-year payout under the JOA of 32 percent of the Seattle Times profit if it voluntarily shuts the P-I and unspecified damage claims from the Times for alleged mismanagement of the JOA. The committee has challenged the constitutionality of long-term payout, charging that it is an illegal inducement by the Times to get rid of the P-I. It isn't clear whether the settlement drops the long-term payout language but substitutes a large front-end payout in its place to avoid the Committee's charge. George said the breakdown of the Times payment would be one of the redacted settlement items it would be seeking. Times spokeswoman Jill Mackie declined to give details of the payment. "We're not focusing on the past," Mackie said. "We're looking toward the future." A Hearst spokesman said breakdowns of the amounts paid to settle litigation "is typically not made public." The release of the settlement documents ended four years of public squabbling between the Times Co. and Hearst. In 2003 Times Publisher Frank Blethen notified Hearst that The Seattle Times had lost money from 2000 to 2002, triggering a JOA provision that allows the Times to end the agreement and force Hearst to shut down the P-I. Hearst sued in King County Superior court to block the Times, and the case has run through the state courts ever since. The two sides agreed to take their fight to binding arbitration last year. Last week, on the eve of a showdown hearing before arbitrator Larry Jordan, Hearst and the Times Co. announced their settlement, which allows Hearst to continue publishing the P-I until at least 2017. "We are very excited about our continuing relationship with the Blethens, the Seattle Times Co., and retaining an interest in the Seattle P-I," a Hearst spokesman said Tuesday. The documents made public Tuesday included the first look at the Blethens' side deal with Hearst, struck when the JOA was last amended in 1999. Hearst disclosed that it has paid the Blethens $8 million since 1999 for the right to bid first on the Blethen's 50.5 percent of Seattle Times Co. voting stock. The remaining 49.5 percent is held by McClatchy Co., the nation's second-largest media company, which owns the Tacoma News Tribune, the Idaho Statesman in Boise, the Tri-City Herald, The Olympian, and the Bellingham Herald. In a federal securities filing last month, McClatchy put the worth of its Seattle Times Co. holding at $102.2 million. Mackie said Hearst had sought the first-purchase rights before the JOA was amended in 1999. Under the deal, Hearst will make additional $1 million payments to the Blethens in 2008 and 2009. Hearst's right to bid first for the Blethen's stake remains in effect until 2083, whether or not the JOA ends before that, a Hearst spokesman said.


Please support independent local news for all.

We rely on donations from readers like you to sustain Crosscut's in-depth reporting on issues critical to the PNW.


About the Authors & Contributors