News BREAKING: Seattle Times and P-I Settle Their Joint Operating Agreement Dispute
posted by on April 16 at 9:03 AM
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 CommunicationsSent: 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.
Warmly,
Frank Blethen
Carolyn Kelly
What "transformation" is he talking about - the one where his paper becomes a shill for the far right? Cause I think they've done a pretty good job of that so far.
Now maybe they'll start reporting objectively about the statist fucks on the Supreme Court.
Say goodbye to the P-I in 2016.
Warmly?
can't they both just go away?
they're killing trees for nothing.
Without that big 32% albatross hanging around the Times' neck, I imagine the value of the Seattle Times Company has just skyrocketed. Would Frank sell the paper in 2010, when the estate tax has been repealed?
I haven't read anything here or at Crosscut that leads me to believe that Hearst has surrendered its right of first refusal should the Blethens ever sell.
So in other words, $74 million was exchanged to continue the same fractured arrangement for the next 9 years?
This sort of crap is why the nation laughs at Seattle.
My aren't you all clever with your pissy negative comments. I for one think this is great news -- I love the P.I. and am thrilled it's beloved neon globe will continue to revolve on the Seattle skyline for years to come. And no one I know laughs at Seattle. Curses its traffic yes, laughs at it, no. Have you seen the mountains lately? This is an awesome place to live.
Well, the international press for one laughs at Seattle. This excerpt is from a story in The Economist magazine a couple of months ago:
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Mr Nickels, who adamantly opposes a new viaduct, has countered Ms Gregoire with his last-minute suggestion for a downsized tunnel. He has arranged an “advisory” city vote, due on March 13th, in which city residents will say whether they support a tunnel or a new viaduct (or, amazingly, both). And he has all but said that if he doesn't get a tunnel Ms Gregoire and her $2.4 billion can take a hike.
The spectacle of the bulky, dark-haired Mr Nickels mud-wrestling with the diminutive, honey-haired Ms Gregoire has not been edifying. “These people are going to go down as some of the worst urban leaders in America,” comments Bryan Jones, an expert on public policy at the University of Washington. At present Ms Gregoire is coming off worse.
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That, my dear, is a big-time rage on the leadership around here.
And neither the PI nor the Times calls out these political leaders nearly enough on their bumbling ineptitude when it comes to transportation planning. Sad, really. We are the ones suffering under their ineffective and downright stupid planning.
Hearst has the better lawyers.
Ah, that's nice. I like the P-I.
So, if I sub to the daily PI now, does that mean less of my money goes to the Blethen family?
This will give Crosscut more time to devote to covering stranger vs. weekly.
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