JOA in York, Pa., Has a Different Twist

By: Joe Strupp Don't think Seattle is the only place where a joint operating agreement is making news. In much smaller, and calmer, York, Pa., one of the more unusual JOA stories is emerging.

In this blue-collar town of 40,000, located about 30 miles south of Harrisburg, the York Daily Record and The York Dispatch have operated under a typical JOA since 1990. But this setup has one interesting wrinkle: Under a provision added in 1996, the MediaNews Group -- owners of the afternoon York Dispatch -- have an option to buy the morning York Daily Record for a previously agreed upon price of about $32 million beginning Jan. 1, 2004. That option can be exercised at anytime during 2004, but runs out on the last day of the year.

If MediaNews Group does not choose to buy the Daily Record during 2004, a second provision kicks in beginning Jan.1, 2005. That option allows the Daily Record's owners, Buckner News Alliance, to force Media News to buy the Daily Record for a lower, previously agreed upon price of about $25 million. Under the JOA, Buckner has three years from Jan. 1, 2005, in which to exercise the option.

If neither side takes advantage of either of the provisions, the JOA, which runs out in 2090, would simply continue.

"Everyone here is preparing for whatever comes," said Shawn Ledington, Daily Record unit chair for the Communication Workers of America Local 38218, which represents most of the workers at both papers. "We are trying to be very positive."

William Dean Singleton, vice chairman and CEO of MediaNews Group, told E&P last week he had not decided whether to exercise his option to buy the Daily Record, but stressed that he did not believe his purchase of the paper would mean either publication would fold. "York is a unique market where each newspaper has a very strong following," he said. "Both newspapers can exist."

Dennis Hetzel, editor and publisher of the Daily Record, would not release detailed profit figures for the JOA, but said each paper is profitable. "This is a JOA that has worked," he said. "Both papers are much stronger financially and both are better than they were 13 years ago."

The unusual windows of opportunity for buyouts were added after Singleton offered to buy the Daily Record in 1996, according to Philip F. Buckner, owner of Buckner News Alliance, who said he did not want to sell the paper in 1996, but decided to allow Singleton the option later on. "I felt that by 2004 the responsible thing would be to create a succession to keep it going," said Buckner, now 73. "I made the agreement in anticipation of being a senior citizen and possibly not wanting to be involved anymore."

If Singleton chooses to buy the Daily Record, or is later forced to buy it, several things could occur. He could seek U.S. Justice Department approval to operate both papers under the JOA, which seems unlikely given the history of JOA decisions; sell one of the papers to another owner and have both continue publishing either under a JOA or separately; or close one of the papers, a move that also seems unlikely if both papers are making money. A shutdown also would require Justice Department approval, and would probably only be allowed if no buyers could be found.

"It is an option we will evaluate," Singleton said about his looming decision. "We will decide what we want to do when we get there."