By: Paul Foy, Associated Press Writer
(AP) A fight over ownership of The Salt Lake Tribune was partly resolved Monday when a federal judge said he planned to rule that a family that lost ownership of the newspaper can try to exercise an option to buy it back.
The Tribune was merged in a tax-free stock swap with John Malone’s TV cable giant, Telecommunications Inc., in 1997 to satisfy one faction of owners that wanted out. Under the convoluted deal, the McCarthey family kept editorial control of the paper and was to buy it back by this summer.
But the McCarthey family claims it was double-crossed when Telecommunications Inc. successor AT&T Corp. sold the Tribune for $200 million 17 months ago to MediaNews Group Inc., just as the McCartheys thought they were closing a deal to buy it.
U.S. District Judge Ted Stewart said Monday he planned to rule that the McCartheys can try to buy back the paper, but he added a caveat that made it unlikely the family could succeed in doing so.
Stewart said the McCartheys would have to get the consent of a hostile joint operating partner, the Deseret News, an afternoon daily that is already aligned with MediaNews to settle old business grievances against the Tribune‘s former owners.
In court, Stewart urged MediaNews, the Tribune managers, and the Deseret News to settle a cross fire of other claims of mismanagement and contract interference, saying “I don’t know how a jury will deal with all of that.”
Stewart said each side faced considerable risk of damages from the claims. “No one is going to gain by this trial,” he said.
Stewart’s expected rulings could be a setback for the McCarthey family, majority owner of the management group that still controls the editorial content of the Tribune, if the Deseret News withholds permission for the sale.
The Deseret News contends the Tribune‘s historic domination of the Newspaper Agency Corp., which handles business affairs for both papers, has frustrated its plan to switch to morning publication.
Phil McCarthey, chairman of the Tribune‘s management group, said a settlement “for the good of this community” was possible if the Desert News recognized his family’s rights to control the Tribune.
That isn’t certain. The Tribune has had a long history of discord with the Mormon Church-owned Deseret News.
McCarthey said he would not entertain an offer once made by MediaNews to share 49% ownership of the Tribune with his family. MediaNews owns The Denver Post and 48 other dailies and 94 non-dailies across 12 states.
Deseret News executives and lawyers said any settlement talks between the Tribune and Deseret News would have to involve MediaNews — a condition McCarthey has been reluctant to accept. MediaNews is fighting to keep ownership of the paper.
“I’m sure everyone will sit down and reassess their positions and reconsider prospects for a settlement,” Deseret News attorney David Jordan said. “Whether that will bear fruit I cannot say.”