Barring any last-minute delay or settlement, executives of the Seattle Times Co. will take the stand behind closed courtroom doors next week and under oath>"/>
Barring any last-minute delay or settlement, executives of the Seattle Times Co. will take the stand behind closed courtroom doors next week and under oath try to prove they have failed miserably at running their newspaper. They will present charts, graphs, financial documents and testimony to show the Seattle Times has lost money for three and as many as six years. This happened despite being handed the opportunity to print money - something called the Joint Operating Agreement, an exception to the laws against corporate monopolies.
It has turned out to be, however, the joint operating disagreement: Execs of the Hearst Corp., owner of the Seattle Post-Intelligencer that is printed, sold and distributed by the Times, will also be under oath next week at the private binding arbitration trial - that's the correct word - trying to prove the Times has not lost money under the 24-year-long pact and in fact intentionally squandered operating revenue in an attempt to bust up the JOA and put its corporate partner, the P-I, out of business.
"The Times will try to prove the JOA is a failed business model," says a participant in the trial with direct knowledge of the secret proceedings (participants are under court order not to discuss evidence until after a decision is rendered, perhaps by June). "But there has never been a morning paper that went out of business under the JOA. And the fact is, this town can support two newspapers as long as one isn't overly greedy."
Testimony and evidence will have everything to do with financials, the insider says, and little to do with journalism, which is nonetheless the real bottom line at stake here. "The arbitrator is not going to split the baby. He'll decide if the Times has met the criteria" of losing money in a three-year period to force a JOA breakup and turn the P-I into a newspaper without a printing press. "Where it goes from there is anyone's guess," he says, although the P-I is not necessarily dead. It could reacquire presses, go Web only or force a JOA rewrite, among many scenarios.
The moment all await, the insider says, is the appearance on the stand of Times publisher Frank Blethen, promising to tell the truth. "He has a practiced mantra that he has constantly repeated: Yes, the Times hired a lot of people and drove up costs but no, it wasn't done to intentionally lose money and worm out of the JOA."
And that's what he's expected to say again next week - that the Blethen family didn't lose money on purpose, they lost it through incompetence. Either way, if the Times prevails, it will mark a great moment in corporate strategy, says the insider. "They'll have succeeded by failing."