Will Seattle End Up as Another One-Newspaper Town?

By: Joe Strupp

It?s appropriate that the nation?s top newspaper editors are meeting here to discuss the industry?s future. That?s because this two-newspaper town is facing one of the most uncertain futures of all.

After nearly three years of a bitter joint operating agreement battle that has included everything from accusations of misleading financial reports to lawsuits, employees and readers of The Seattle Times and Seattle Post-Intelligencer are about ready for it to end. Although some closure is in sight, with a recent agreement by both sides to go to an arbitrator, the tension and suspense have taken their toll.

?It?s on the minds of people on our staff,? admits Ken Bunting, a former P-I editor, who now serves as associate publisher there. ?You can?t have a situation where someone is trying to run you out of business and not be concerned about it.? Admitting that the P-I could not exist outside the JOA, Bunting said his paper remains dedicated to keeping it going. ?Nothing has changed in terms of the P-I and Hearst wanting to keep Seattle a two-newspaper town,? Bunting said.

A lot of people “just want some finality here,? said Steve Miletich, a seven-year Times reporter and former P-I scribe who also serves as vice president of the local Newspaper Guild. ?We don?t know how it is going to go. There is some acceptance that there will be one newspaper, so just have some settlement.?

The fight began almost exactly three years go when Frank Blethen, owner of The Seattle Times, sought to exercise a provision in the JOA that allows either paper to seek an end to the agreement if it suffers three straight years of losses. Blethen contends that his paper had lost money from 2000 to 2002, and has since claimed further annual losses.

Hearst Corp., which owns the P-I, disputed the charge and has since filed suit to stop the JOA dissolution. For three years, both parties have battled in the courts and in the realm of public opinion.

Under the JOA, the Times controls the business side of both morning newspapers? operations, splitting all profits, with the Times taking 60% and the P-I 40% The JOA is not set to expire until 2083.

Several weeks ago, however, the two parties appeared ready to end the bloodshed with a surprise announcement that they would seek an arbitrator to settle the matter. That proposal has faced opposition from at least one group, the Committee for a Two Newspaper Town, which has sought to keep both papers operating and has filed to block the arbitration effort. A hearing on that request is set for Thursday.

To add more intrigue to the situation, The McClatchy Company, which recently bought Knight Ridder, also took that company?s 49.5% share in the Times. While McClatchy is set to sell 12 of the former Knight Ridder papers, it has made no plans yet to sell its interest in the Times.

Meanwhile, in both newsrooms, coverage continues, but with an eye toward having some finality.

At the Times, Miletich sees a definite impact of the ongoing dispute, but nothing that stops work in its tracks. ?It has caused anxiety and apprehension,? he told E&P. ?It is also remarkable how some people just go about their work. In a way, you are powerless, so you just have to go about your business.?

But what about readers? Several who spoke with E&P at Monday night?s Seattle Mariners game appeared up-to-date on the battle, but with mixed views on what a one-newspaper town would mean.

Gordon Johnson, of nearby Kent, Wash, said he would miss his P-I in the morning if it closed, but would just go to the Times. ?I would not prefer it,? he said. ?I would rather see the P-I be the one.?

But for others, such as Toby Barnett of Kirkland, Wash. and Travis Nelson of Everett. Wash, either paper would suffice, or other Web options. ?I?m not partial to either one,? said Barnett. ?I go online quite a bit.?

Blethen, who has declined to comment on the specific JOA dispute, said his family, which also runs several other newspapers in Washington state and Maine, expects a positive outcome. ?We are energized about the future,? Blethen said just prior to a scheduled companywide gathering Monday night. ?We are very cognizant of the revenue challenges and we are not unmindful of those challenges.?

He added that he does not believe most of Seattle is as focused on the dispute as the newspapers or the industry. ?I think the general public has an interest in this, but not a blow-by-blow,? he said.

If the arbitration occurs, it may still take up to a year for a final decision to be made, according to those involved. That could mean another year of uncertainty and stress for both newsrooms, especially those in the P-I, which would be the most likely to fold if the JOA is ended.

?The newspaper business in Seattle has been flipped on its head in the three years that this has been going on,? said Bill Richards, a freelancer who had covered the JOA under an unusual three-year contract with the Times that ended in late 2005. ?Three years ago, each paper was fighting for the dominant print paper. It is now clear that that is not the growth area ? it is migrating to the Web.?

That Web migration has prompted speculation on several fronts that the P-I may well go Web-only if the JOA ends. ?The P-I has an in-place news staff, no overhead and the masthead,? Richards explained. ?Both papers are gathering more Web viewers. If you think about it, there is probably no place in the country with a better set-up to try it. It has a very Web-savvy audience and a fairly Web-savvy advertising base.?

The P-I?s Bunting calls such a scenario a ?non-starter.? ?There is no advertising on the Web to sustain a news operation of the quality and size that puts out a daily newspaper,? he said.

Other scenarios, obviously, would be that the P-I folds or merges, but continues to receive its 32% JOA cut, which would occur under one element of the agreement.

Nothing, however, is certain until the agreement, whatever it is, is signed. ?I think everyone is so worn down that they?re just kind of numb,? Richards, who has continued to cover the JOA for the alternative Seattle Weekly, said. ?There is some puzzlement over why Hearst has agreed to go into this mediation. What is their game plan??

Hearst officials have declined to comment on the reasons for their decision.

Meanwhile, the two staffs, who have an inherited animosity as rivals anyway, go about their daily business with a touch more friction. ?There is a certain amount of tension,? Miletich said. ?We are all under the guild, but some people believe Blethen is trying to undermine the P-I or that Hearst is trying to bleed the Times into selling.? But, he said, when it comes to having either paper fold, ?no one is going to casually say goodbye.?

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