Sale Of Salt Lake City Paper Blocked

By: Paul Foy, Associated Press Writer (AP) Seizing an opportunity to settle old scores, the board of the Deseret News said Wednesday it was denying managers of The Salt Lake Tribune an option to buy the larger newspaper back.

In a messy, bitter and often personal battle between two newspapers unhappily locked in a joint operating agreement, the Deseret News' board of directors invoked a disputed right to help decide ownership of its rival.

For the first time, the News used a clause in the joint operating agreement to veto another sale of the Tribune, which has passed through two corporate owners during the past five years.

The decision leaves the morning paper in the hands of the Denver-based MediaNews Group, a newspaper chain that bought the Tribune in January 2001 from AT&T Corp. even as Tribune managers thought they were closing a deal to reclaim ownership of the paper.

As early as 1997 the Deseret News, an afternoon paper owned by the Mormon Church, had looked into buying the Tribune, a paper often critical of the church.

Back then, the Tribune had been taken over by a cable TV giant it helped establish, John Malone's Telecommunications Inc. The stock swap satisfied some Tribune owners who wanted to cash out while letting other owners control the paper with an option to buy it back by this summer.

But Telecommunications Inc. was sold to AT&T Corp., which was eager to quickly unload the "nonstrategic" Tribune.

AT&T, finding itself caught between threats of litigation from both papers, took an easier way out and sold the Tribune to MediaNews as that company agreed to make the Deseret News a more equal partner in the joint newspaper agency long dominated by the bigger Tribune.

"We had a clear choice: do we want to partner with MediaNews, which is committed to neutral management of the newspaper agency, or do we partner with the managers of the Tribune, who insist on controlling the agency and blocking our move to morning publication?" Deseret News Board Chairman Glenn Snarr told The Associated Press.

"So the choice was pretty easy," he said.

Tribune chief operating officer Randy Frisch said the Deseret News did not have a right to stop the McCarthey family, the Tribune's former majority owners, from buying the Tribune back.

Frisch said the Deseret News was turning its back on a longtime partner that "took in the Deseret News 50 years ago when it was about to go out of business. And then we made them one of the fastest growing afternoon papers in the West."

"It's difficult to understand how you can kick somebody out of a relationship you've had for 50 years," Frisch said.

Even as the Tribune's former owners assert the Deseret News has no right to interfere, they formally asked their partner's consent on Monday for a sale that would return their cherished Tribune.

Snarr said the Deseret News board decided "not to waive its contractual rights" or renounce an agreement with MediaNews that speeds its switch to a timelier morning slot.

The managers of the Tribune still run their paper under a contract tied to the five-year-old option to buy back the Tribune this summer. But the Deseret News is invoking a joint-operating clause prohibiting either paper from transferring stock in the common newspaper agency.