News BREAKING: Seattle Times and P-I Settle Their Joint Operating Agreement Dispute
posted by April 16 at 9:03 AMon
Under the terms of the agreement, announced this morning, the Seattle Times Company will pay $49 million to the Hearst Corporation, which owns the Seattle Post-Intelligencer, in order to end Hearst’s right to collect a percentage of Seattle Times revenues in the event that Hearst closes the P-I.
In addition, Hearst will pay $25 million to the Times Co. to guarantee that until 2016, the Times Co. will not try to end the papers’ Joint Operating Agreement due to the Times losing money under the arrangement.
That means two daily newspapers will continue to publish in Seattle, for now. At first glance, it also means that Hearst has lost one of its incentives to close the P-I (the guaranteed share of Times revenue) while the Times Co. has lost one its easy ways to slip out of the JOA (claiming the JOA needs to be ended because the Times is losing money under the arrangement), at least until 2016.
Here’s a memo that just went out to Seattle Times employees:
From: Company Communications
Sent: Monday, April 16, 2007 8:45 AM
To: All Seattle Times
Subject: Message from Frank Blethen and Carolyn Kelly
We are pleased to announce our long legal battle with the Hearst Corporation has been settled. Today Hearst and The Seattle Times Company signed a settlement agreement that ends four long years of litigation. A copy of the press announcement and a summary of the key elements of the agreement are attached.
The settlement is a good outcome for the Times, Hearst and the community. The JOA will continue with both papers continuing to publish for now. This allows us to refocus on the transformation we have talked about as we try to establish the business model for the future and deal with our continuing revenue problems.
Serious market challenges remain. Ultimately, advertising revenue and readership will determine our success and whether this market can continue to support two daily publications. Both parties want to preserve multiple metro newspaper voices in this market, but there are no guarantees. Going forward, our ability at the Times to adapt to marketplace changes, to innovate and to manage the business effectively will be critical to returning this paper to stability and profitability.
In this time of great uncertainty, the legal challenges have been an additional burden. Your support as we have worked through these complex legal matters has been essential and immensely gratifying. Thanks to each of you for your focus, commitment and hard work during this challenging time.
For now, celebrate with us that we can stop diverting precious resources to legal expenses and return our full attention and resources back to journalistic and business excellence, working toward the transformation necessary to compete in this new and changing climate for newspapers.