Last week's Washington
State Supreme Court ruling on the joint operating agreement (JOA) between The
Seattle Times and Hearst Corp.'s Seattle Post-Intelligencer did
little to resolve whether
But all the ruling means is that there will still be two dailies in
In a statement, Frank Blethen, the Times'
publisher whose family owns the controlling interest in the Seattle Times Co.,
called on Hearst to renegotiate the agreement with the Times to
"reflect today's difficult newspaper economics." The Times has
lost money each year since 2000, including a $12 million loss last year. A Times
spokesperson declined to answer questions about the paper's financial health
this year, which has seen 99 Times employees volunteer to be laid off in
exchange for a severance package.
Hearst fired back in its own statement that "this case is far from
over" and gave no indication that it would sit down with Blethen any time soon. "The fight has just begun," says Kelly Corr, a
Corr says there are
other issues at stake in the 2000 and 2001 losses, and he intends to litigate
every aspect of them to determine whether the Times was acting properly
as the JOA's manager or whether it was out to sink
the P-I. Corr says Blethen's long-known desire
to drown the JOA, which was agreed to in 1983, is proved by a 2002 Times
internal document which states that the paper had articulated a goal of ending
the agreement as far back as 1985. The Times declined to answer
questions beyond Blethen's statement.
The matter fell into the Supreme Court's lap after the Times filed
a "loss notice" with Hearst in 2003, citing losses in 2000, 2001, and
2002. Hearst sued the Times. That fall, King County Superior Court Judge
Greg Canova found that the strike-generated losses in 2000 and 2001 were an
extraordinary event that could not be counted as part of the three years of
losses required to renegotiate or terminate the JOA. The Times appealed
to the state Court of Appeals, which overruled Canova last year. Hearst
appealed that ruling to the state Supreme Court, which heard arguments in
February.
Also at issue in the
case, which now returns to Superior Court, are Times losses in 2002,
which Corr argues may have been the result of the Times purposely trying
to generate losses by hiring some six dozen new editorial staff members. The
Supreme Court did not rule on the 2002 loss.
Lost in the JOA fight is that both papers have seen serious drops in
circulation— for a six-month period ending March 31, the P-I's circulation
dropped 4 percent to 144,836 copies and the Times' dropped 1.7 percent
to 233,268—and that the P-I has taken overt steps to react. In recent
weeks, the P-I has made its paper much more Seattle-focused.
P-I columnist Joel Connelly calls it a "course correction"
and a return to the paper's traditional strength. The strength of the smaller,
plucky P-I (with roughly 150 editorial staff) versus the much-larger Times
(with about 300 ) has been obvious. The P-I
bested the Times on the monorail's financing fiasco and has been
producing smart urban features.
How readers respond remains to be seen, although for now they still have
what they've long had in