'Seattle Times' to Appeal Court Decision

By: Peggy Andersen, Associated Press Writer (AP) The Seattle Times said Tuesday it will appeal a judge's decision halting its efforts to dissolve a 20-year-old joint operating agreement (JOA) with the Seattle Post-Intelligencer.

"We have no choice but to appeal because the ruling threatens the economic health of our newspaper," Times Publisher Frank Blethen said in a statement.

There was no immediate comment from attorneys for the Post-Intelligencer or representatives of the P-I's owner, Hearst Corp. of New York.

Blethen, whose family owns 50.5% of the Times with the balance owned by Knight Ridder of San Jose, Calif., said local ownership of his newspaper would be threatened unless the newspapers' JOA is modified quickly. Under that pact, the Times handles the circulation, distribution, and other non-news functions for both papers in exchange for a greater share of their joint profits.

Earlier this year, the Times, which contends the agreement is no longer financially viable, tried to enact a provision that would allow it to terminate the deal after three consecutive years of financial losses -- in 2000, 2001, and 2002.

But last month, King County Superior Court Judge Greg Canova sided with Hearst in finding that the Times' losses in 2000 resulted from "an extraordinary event" -- a 49-day strike that year -- and thus didn't meet requirements of the provision.

The Times is seeking an expedited review of that ruling from the state Court of Appeals.

"This issue has been terribly mischaracterized," Blethen said. "It is not a dispute between The Seattle Times and the P-I, but a dispute between the multibillion-dollar Hearst Corp. and the much smaller, independent Seattle Times."

The Times' goal is not to shut down the P-I but to preserve the Times as an independent local voice, he said.

"We're fine with competition," Blethen said. "But the entire media landscape has changed dramatically from when the JOA was formed 20 years ago and we shouldn't now be forced to subsidize a huge conglomerate that has far more resources than we do."

Times spokeswoman Kerry Coughlin has said it appears the Times will lose money again this year, which could prompt invocation of the loss clause for the years 2001-2003.

JOAs, an exception to federal antitrust law, are allowed by the Newspaper Preservation Act of 1970. The law was designed to maintain multiple editorial voices in markets that might not otherwise support more than one major newspaper.

Hearst attorneys contend the same logic that barred the 2000 losses would bar the Times from claiming losses in 2001. They suggest the 2002 losses were caused in part by a Times hiring binge that inflated expenses.

Blethen contends 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.