Feds Quiz Scribe in Paper Probe

Justice Department asks me: Whither Seattle with one daily newspaper?

JUSTICE DEPARTMENT lawyers and the state attorney general's office are interviewing journalists and other possible witnesses by telephone as part of an investigation into the joint operating agreement (JOA) between the owners of Seattle's two daily newspapers. Face-to-face interviews are to begin here next month, federal officials say, as the U.S. builds a possible case to oppose the breakup of the JOA between The Seattle Times and the Seattle Post-Intelligencer.

The feds' questions, such as those posed to me in a conference call last week, indicate Justice is taking a look at the effects of the JOA approved by the government 20 years ago. The joint publishing pact, in which the Times handles printing, ad sales, and distribution of both papers, was OK'd to save the P-I, then deemed a failing newspaper. The Times wants to end the deal, saying the market now can only support one newspaper under any circumstances, and leave the P-I, which no longer has a printing press, to die. In contrast, the feds appear to be seeking evidence that the marriage has been a successon the public's behalf, at leastand should continue.

Testimony from business experts, the public, and journalists currently or formerly involved in the newspapers' operations could be used by the U.S. to block the Times' attempt to dissolve the agreement and dominate the Seattle daily-newspaper market. Though there are a number of possible outcomes, most point to Seattle becoming a one-daily-newspaper town.

Hoping to prevent the breakup, the P-I, owned by media giant Hearst Corp., is suing the local Blethen family corporation, whose Times is the flagship of a chain of six daily and two weekly newspapers in Washington and Maine. A JOA divorce must be approved by the Justice Department, which is examining at least two antitrust issues: Even if the JOA ends and the P-I closes, Hearst will receive 32 percent of the Times' profit for 80 years. Though it earlier approved that sweetheart arrangement, Justice wants to re-examine its legality. Additionally, the two publishers recently revealed a side agreement that gives Hearst the first option to buy the Times. The papers contend that the agreement is not legally part of the JOA. Hearst is paying $1 million a year over 10 years for that right, the Times says.

Under the JOA, the side pact could be seen as a conspiracy to bar other investors from the free marketplace and to limit opportunities to save the P-I from its presumed grave. The government could use the threat of antitrust action to leverage a settlement and a new, continuing production agreement.

WHAT KIND OF QUESTIONS are investigators asking? I can tell you what they asked me. Two U.S. attorneys and a state assistant attorney general interviewed me by phone last week, ostensibly because I worked at the P-I and then the Times as a news columnist from the 1970s into the 1990s, and because I have friends at both papers. (I don't normally write about the JOA saga for Seattle Weekly.) I agreed to the interview when the Justice official who arranged it said that, while it was confidential, I could write about it. I didn't ask if I could question them about their open investigation, since I knew the answer. I just decided once we got into it, I'd ask anyway.

The attorneys were mostly tight-lipped and my own answers weren't what you'd call earthshaking. I gave them no insider facts, having none, and served up no opinions I haven't expressed or written publicly, most of which my friends in assorted newsrooms and bars are tired of hearing. But their questions were revealing and made one thing clear: They are not simply investigating the JOA, as both newspapers have put it in their news reports. They are investigating the newspapers, specifically the newspapers' owners. Their queries included many that were ownership-specific: corporate policies, staffing and assignment decisions, and news-coverage strategies. It's been a decade, so I know nothing. But these are topics they must be exploring with more-informed witnesses to gauge the JOA's worthiness as well as any corporate collusion.

Among their other questions: What would Seattle be like with one less newspaper? How would quality and quantity of reporting be affected? In what ways would the free flow of information to the public be diminished? And would the gap be sufficiently filled by TV, other publications, and the Internet?

THE PUBLIC, I SAID, "can see the top of the news on TV, and they can certainly see it on the Web, but most of the Web [news] they're reading is probably newspaper-generated." If the P-I folded but Hearst maintained an online presence, the news would likely be provided by a shadow staff, I said, and TV news shows would have only one paper to rip and read. The public, then, will have half the news and opinion options it has now.

I blathered on. As a die-hard newspaper romantic, I did my best to avoid conceding this is ultimately a businessthat, as A. J. Liebling famously said, freedom of the press belongs to those who own one.

"What are the benefits, then, of a one-newspaper town?" one attorney asked.

I thought hard. "I can't think of what that would be," I said. I pondered further as the long-distance line quietly sizzled. I laughed. It was the one question I couldn't answer. I'm still working on it.

randerson@seattleweekly.com

 
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