By: Paul Foy, AP Business Writer
(AP) Former owners of The Salt Lake Tribune were rebuffed Monday in their effort to buy back the newspaper after an appeals court affirmed the right of the Deseret News to pick another buyer for the Tribune.
A three-judge panel of the 10th Circuit Court of Appeals ruled valid a stock restriction that gave the Deseret News a right to reject the McCarthey family’s bid to buy back the Tribune. Instead, the Deseret News approved a sale to MediaNews Group Inc., which bought the Tribune in January 2001.
Asked for his interpretation of the ruling, MediaNews president Dean Singleton was blunt: “It means we’re going to keep the Tribune.”
Singleton said the McCartheys didn’t have enough money to buy the paper anyway. The latest appraisal puts the value of the Tribune at $352.5 million, even though Singleton paid only $200 million barely three years ago.
The appeals court left open the McCarthey family’s claim that it had an ironclad right to regain Utah’s largest newspaper. The panel said that question can be decided only at trial. The McCartheys contend they had an option to buy back the paper when they sold it to John Malone’s Telecommunications Inc.
That option was disregarded by AT&T Corp. when it bought TCI and inherited the Tribune.
At a November hearing in Denver, the appeals panel appeared to view the rights of the McCartheys as anything but clear, given the complicated relationship between the Tribune and the Deseret News, its joint-operating business partner and chief rival.
“That principle of good faith and fair dealing cannot trump legal principles, can it?” asked Judge David Ebel of Denver, who led the questioning of three sides in the dispute.
The appeals panel said U.S. District Court Judge Ted Stewart had jurisdiction when he decided in favor of the Deseret News and the stock restriction in the joint Newspaper Agency Corp., which handles printing and business affairs for both papers.
The panel said Stewart was right to deny a preliminary injunction that would have kept the McCartheys in control of the paper until the case is finally decided.
The McCartheys sued MediaNews and the Deseret News almost two years ago, hoping to block MediaNews’ purchase, but Stewart ruled against them, saying the Deseret News had the right of consent.
McCarthey family members have insisted their ownership is vital to maintaining an editorial balance in Salt Lake City, where the Deseret News is owned by The Church of Jesus Christ of Latter-day Saints.
Singleton has vowed to maintain editorial independence, and said he made no deal with the church or the Deseret News to gain its approval for owning the Tribune.
MediaNews owns The Denver Post and 49 other dailies and bought The Salt Lake Tribune to complete its Rocky Mountain news empire. The Tribune takeover was completed Aug. 1.