Seattle JOA Blasts Citizen Group Seeking Settlement Details

By: E&P Staff The owners of Seattle's daily newspapers are unloading with both barrels on a citizens group that wants to know the details of the deal that ended the once-unhappy partners' four years of squabbling.

The Committee for a Two-Newspaper Town (CTNT) last week asked a judge to order the disclosure of some confidential details in the agreement that ended the litigation between The Seattle Times Co. and Hearst Corp., publisher of the Seattle Post-Intelligencer. CTNT in papers filed last week in King County (Wash.) Superior Court said they fear the JOA partners may have a side deal that could lead to one paper closing voluntarily at some point.

Reacting in separate court documents filed Monday, Hearst and the Blethen family-controlled Times call the CTNT's suggestion "scurrilous," "reckless and false," and "irresponsible."

A Hearst Corp. filing said the settlement gives CTNT what it wants -- a two-newspaper Seattle -- until at least 2016. "CTNT has needlessly chosen to extend this costly litigation rather than celebrate the settlement and enjoy the continuation of Seattle's two editorial voices," the filing said.

The court documents were reported Tuesday by Eric Pryne in The Seattle Times and Dan Richman in the P-I.

Judge Greg Canova could rule on the CTNT motion, technically extending discovery in the litigation, as soon as Wednesday. But Hearst and the Times Co. are asking him to make no decision until July 20, when they will formally ask him to dismiss the committee's lawsuit.

In April, just before closed-door hearings in private binding arbitration, the two publishing companies announced they had reached a settlement that would end the Times' effort to force a dissolution of the JOA or folding of the P-I or both by triggering a "loss-notice" clause because, it said, the partnership had suffered three consecutive years of financial losses. The P-I had filed a preemptory lawsuit seeking to prevent the loss-notice trigger.

In the settlement, the Times Co. will pay Hearst $49 million for dropping all legal claims against the company, and for giving up its 32% "contingent interest" in the JOA. Under the current agreement, if the P-I were folded, Hearst would be entitled to 32% of all profits of the JOA through 2083.

Exactly how that $49 million is divided as payment for each action has been redacted from the publicly disclosed agreement, however. CTNT said last week it "good reason to fear that the new, instant payoff might simply be compensation in advance for voluntary closure" of the P-I."

Also under the settlement, Hearst will pay the Times Co. $25 million in exchange for an agreement by the Times not to trigger the loss-notice until at least 2016.