Chattanooga Papers Extend JOA p.14

By: Tony Case

THE CHATTANOOGA FREE Press and Chattanooga Times, which made headlines 15 years ago after they defied the federal government and went into business together, have extended their joint-operating agreement through the year 2015.
The Tennessee dailies share production, advertising and circulation operations but are separately owned and have independent news operations. Their JOA was set to expire in November 2000.
Times chairman Ruth Holmberg owns the daily with her three siblings: New York Times Co. chairman and former New York Times publisher Arthur O. Sulzberger, Marian S. Heiskell and Judith P. Sulzberger.
The Free Press is run by the family of the late Roy McDonald, who founded the paper in 1935, and by the family of the late Everett Allen, who was the paper's senior vice president.
The Times and Free Press joined forces in the spring of 1980 without waiting for the government's blessing.
The Antitrust Division of the Justice Department, citing the Newspaper Preservation Act of 1970, recommended that then-U.S. Attorney General Benjamin Civiletti deny the papers' JOA application, which he did.
The government doubted the Times' claim that it would have to shut down if it weren't allowed to go into the agreement. The Newspaper Preservation Act allows newspapers to take the first steps toward entering a JOA only if one of the properties is in danger of failing.
The Times, insisting it couldn't meet its payroll without joining the Free Press, went ahead with the JOA. The Times, after entering into the deal, fired over 100 production employees and discontinued its 111-year-old Sunday edition.
The papers continued their quest for JOA approval. But Acting Assistant Attorney General Richard Favretto implored Civiletti to rule against them.
"The applicants cannot at the same time pursue an application to the Attorney General for an antitrust exemption and ignore the procedures set forth in the regulations governing such applications," he said in a letter.
By late summer, the Justice Department and Civiletti had agreed that the Times and Free Press were eligible for antitrust immunity under the Newspaper Preservation Act.