Times: 'Valuable Gift'

From a Jan. 7 memo by Seattle Times Publisher Frank Blethen, in which he assesses 2002 and explains the locally owned paper's finances. The Times lost money for the third straight year, prompting speculation it will pull the plug on its joint operating agreement with the Hearst-owned Seattle Post-Intelligencer.

IT IS A SPECIAL PRIVILEGE for each of us to be in the journalism business and to serve our communities in Washington and Maine. In turn, for our communities, we are a rare and valuable gift as they are now among a handful of communities that still enjoy fiercely independent local journalism. . . . Barely a year ago, we found ourselves . . . in violation of our bank covenants. By then we had already been forced to downsize over 20 percent. Revenues continued to drop. In the face of great skepticism that we could do it, we took substantially more—about $40 million—out of the company's expenses so we could build a 2002 budget that was in compliance with our bank covenants. . . . Gaining compliance with our bank debt covenants ensured our near-term survival by eliminating a potential vulnerability to potential takeover attempts by [minority shareholder] Knight Ridder, Hearst or another chain. Once we cut the budget and gained covenant compliance, without blinking an eye my cousins and I agreed to refinance our debt to provide as much money as we could to begin to rebuild the business to preserve our reader base and protect our franchise. To not refinance debt and begin rebuilding would have been a very foolish business decision. . . . And it would have rendered our commitment to journalism hypocritical. The family never wavered.