Citizen Kane Mutiny

The Seattle newspaper chase.

With the Newspaper Association of America conference and The Associated Press annual meeting in town, there could be no better week for The Seattle Times and the Seattle Post-Intelligencer to commence the final, public rounds of their fight to the death. If the timing of recent events is any indication, it's going to be a doozy, like that movie Memento, with everything happening backward.

On Saturday, Frank Blethen, the Times publisher whose family owns 50.5 percent of the Seattle Times Co., put out a news release saying that P-I owner Hearst Corp. planned to sue the Times Co. because the Times intended to end a federally sanctioned joint operating agreement that lets the two papers function as a business monopoly. Sure enough, on Monday, Hearst sued in King County Superior Court, saying there's no way the agreement can be scuttled under the circumstances. Hearst sought "declaratory and injunctive relief." On Tuesday, the Times formally notified Hearst that, indeed, it wishes to negotiate the end of the JOA, as it's called, under a clause that allows escape by one party if it loses money for three consecutive years. In its lawsuit, Hearst had said the three-year-loss clause didn't apply because of a strike and the post-9/11 economic downturnforce majeure, in legalese, meaning unexpected events. Moreover, Hearst claimed, the Times spent more money covering news in 2002 than it should have.

It's in court now, but this contentious relationship has been deteriorating for some time. In Hearst's filing this week, one can read a lengthy letter by Blethen to Hearst more than a year ago, responding to complaints by the P-I's owners of "punitive and disproportionate" treatment by the Times under the JOA. Wrote Blethen: "It is the P-I itself, and not our lack of marketing diligence or other alleged management shortcoming, that is making our job of selling the P-I so difficult." The first court date is May 6.

At this point, there are two things to keep in mind:

*While megacorporate citizen Hearst has lots of cash, the relatively small Times Co. owns the papers' Bothell printing plant and, in Seattle, has the advertising and distribution organization that supports both papers. As a practical matter, Hearst can't walk away from the JOA and keep publishing the P-I with ink without major investment.

*All of this will be sorted out by Oct. 29, 2004the end of an 18-month window of negotiation under the JOA. We'll either have two daily papers with a new agreement, or one. If it's one, it might be the larger Times, which might still be owned by the Blethens. But maybe not. If this fight gets costly and the Blethens decide to sell, Hearst has right of first refusal. Twice already, Hearst has discarded its own paper and bought a bigger competitor in the same city.

Editor's note: Chuck Taylor, Seattle Weekly's managing editor, worked for 16 years at The Seattle Times.

ctaylor@seattleweekly.com

 
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