(AP) The Seattle Times won a key battle Monday in its fight to break a joint operating agreement that has governed publication of the city’s two daily newspapers for 20 years.
A state appeals panel reversed a judge’s decision favoring the Hearst Corp., which owns the Seattle Post-Intelligencer. The three-judge panel unanimously agreed with The Times that the judge erred in deciding not to allow two years of strike-related financial losses by The Times to count toward an escape clause that could end the operating agreement.
“The advantage of two daily newspapers is a rare state of affairs today, and the temptation is great to rewrite the JOA, in the hope we will somehow preserve both. But this we may not do,” Judge Anne L. Ellington wrote for the panel.
The panel directed the lower-court judge to allow losses in 2000 and 2001 to count for the escape clause, which lets either party end the agreement after three years of losses.
“We are gratified by the court’s ruling and remain willing to work with the Hearst Corp. to negotiate a reasonable contract change to sustain two newspapers in Seattle,” Times Publisher Frank Blethen said in a statement.
A spokesman for Hearst said the company was considering an appeal.
“We intend to continue to vigorously resist the efforts of The Seattle Times Co. to turn Seattle into a one-newspaper town,” said the spokesman, Paul Luthringer.
The Times — owned by the Blethen family, with a 49.5 percent share held by Knight Ridder — cited losses in 2000, 2001 and 2002 when it sought to begin negotiations to end the agreement it has had with the Post-Intelligencer since 1983.
Hearst has argued that The Times’ loss in 2000, when both papers were hit by a 49-day strike, should not count toward the three consecutive years. Hearst has also said it will challenge the 2002 loss.
Under the agreement, The Times handles printing, distribution and advertising at both papers in exchange for a greater share of their joint revenues.
The Times says it can’t make a profit under the JOA. Hearst says the Post-Intelligenger can’t survive without it, because it lacks staffing and facilities for key business functions, including printing.