'Seattle Times' Loses Bid to End JOA

By: Updated at 8:15 p.m. Eastern Standard Time

(AP) A King County Superior Court judge ruled Thursday against The Seattle Times, stopping it from dissolving a 20-year-old publishing agreement with its rival, the Seattle Post-Intelligencer.

The ruling means the Times cannot pursue moves that could result in a shutdown of the P-I or an end to the agreement.

"It's a big victory," said Guy Michelson, an attorney for the P-I. "We're very happy."

Seattle Times spokeswoman Kerry Coughlin said the paper will assess its legal position. "We still feel very strongly that the language and the intent of the loss clause is very clear," she said. "The [joint operating agreement] has become a failed business model that threatens the survival of an independent newspaper."

Under the JOA, the Times handles the circulation, distribution and other non-news functions for both papers in exchange for a greater share of their joint profits.

The Times says the agreement is no longer financially viable. It invoked a provision that allows the parties to end joint operations if either sustains three consecutive years of financial losses. The Times said it has lost money in 2000, 2001 and 2002.

Without the JOA, which has governed operations at both papers since 1983, Hearst Corp. attorneys said the P-I could not survive.

Hearst attorneys argued that the Times' loss in 2000, when both papers were hit by a massive strike, should not count toward the three consecutive years of losses required as a condition for ending the operating agreement. They said the strike constituted "force majeure" and triggered a provision that protects both parties from harm in the event of such unusual circumstances that are beyond normal market conditions.

Times Publisher Frank Blethen has repeatedly charged that Hearst is using the JOA to "bleed" his company's assets and force a sale of the Times. Hearst holds a separate agreement that gives it the first opportunity to buy the Times if it is ever sold.

The Times is majority owned by the Blethen family, with Knight Ridder owning the other portion of the paper.