By: Gene Johnson, Associated Press Writer
(AP) The Seattle Times said Saturday that talks to restructure an agreement between the newspaper and the Seattle Post-Intelligencer have reached an impasse, setting up a likely court battle.
Under the agreement, first reached in 1983, the Times handles advertising, production, circulation, and marketing for both papers, while they maintain separate newsrooms. The pact gives the Times 60% of the papers’ joint revenues. The other 40% goes to Hearst.
The Times has contended recently that the agreement has proven costly, and that the market is becoming less able to support two newspapers, as has happened in many other cities.
In a statement Saturday night, Times Publisher Frank Blethen said talks since late last year to restructure the deal have stalled. The Times told Hearst it was prepared to negotiate an agreement by which the two could publish one newspaper, as allowed the operating agreement.
Hearst informed the Times it planned to take the matter to King County Superior Court on Monday, the Times said Saturday. Hearst spokesman Paul Luthringer in New York confirmed Saturday night that legal action was imminent.
“The Hearst Corp. has been publishing the Post-Intelligencer in Seattle since 1921 and intends to continue to do so,” Luthringer said. “We do not believe either party has a basis for terminating the Seattle joint-operating agreement.”
Blethen disagreed, noting that the Times has lost money in each of the last three years. Under the agreement, if either paper loses money for three straight years, that paper can start an 18-month negotiating period to come to terms on publishing one paper.
If those negotiations fail, the operating agreement ends, and the P-I would have to begin doing its own advertising, marketing, circulation and production.
“Our goal is not to kill the P-I,” Blethen said. “In fact, we believe it’s Hearst’s strategy to kill The Seattle Times. We believe they are well aware that the current agreement will yield substantial losses for the foreseeable future. “It is not our intent to let the Hearst Corp. bleed one of the few remaining independent newspapers out of existence.”
The Seattle Times is owned 50.5% by the Blethen family and 49.5% by San Jose, Calif.-based Knight Ridder.
The 140-year-old P-I has roughly 200 reporters, photographers, editors, graphic artists, and other news and editorial employees.
The Times, founded in 1896, has about 350 news and editorial employees among its 2,200-person staff, including more than 60 news people hired last year.
Last month, the Times announced plans for cutbacks, citing a dour economy and its own financial problems. It did not specify how many people might lose their jobs.