Hearst Corp. has been paying The Seattle Times $1 million a year since 1999 for the right to buy the newspaper first should it be put up for sale, according to documents released Tuesday.
Hearst owns The Times’ smaller rival, the Seattle Post-Intelligencer, and has been feuding with The Times since 2003, when The Times tried to dissolve a joint operating agreement between the papers. Last week, the sides announced that they had settled their legal fight, with The Times paying $24 million to continue the JOA until 2016 at least.
The documents released by the companies Tuesday pertained to that settlement as well as a 1999 agreement giving Hearst the first right to buy The Times. The newly disclosed details included the deadline for The Times’ $24 million payment — Aug. 15 — and how much Hearst has been paying for the right of first refusal.
While the 1999 agreement called for Hearst to make $1 million payments over nine years, the company agreed to make two more payments — next year and in 2009 — as part of this month’s settlement. It was not immediately clear how long Hearst retains the right of first refusal.
Under the JOA, The Times has handled business functions such as advertising, circulation and printing for both papers since 1983. In exchange, The Times keeps 60 percent of their joint profits.
Times Publisher Frank Blethen has said, however, that the arrangement is no longer financially viable in a declining newspaper market. The Times gave notice in 2003 that it had lost money for three consecutive years, triggering a JOA provision that required Hearst to close the P-I or print it on its own.
Hearst sued to challenge The Times’ right to end the JOA.
Under the agreement announced last week, The Times is paying a net $24 million: $49 million to settle Hearst’s legal claims and buy Hearst’s right to collect 32 percent of The Times’ profits through 2083 should the P-I close, offset by the $25 million Hearst is paying for The Times not to try to end the JOA before 2016.
Redacted from the documents released Tuesday was a breakdown of how much of the $49 million is going toward settling the legal claims and how much is going to buy back Hearst’s 32 percent interest in The Times’ future profits should the P-I close.
The Committee for a Two-Newspaper Town, which intervened in the lawsuit in hopes of ensuring both papers keep publishing, has praised the agreement. But co-chairwoman Anne Bremner said Tuesday the committee wanted to review the newly released documents before determining whether to dismiss its legal claims.