JOA hearing date upheld; plans to sell P-I reiterated

Tuesday, July 22, 2003

By DAN RICHMAN
SEATTLE POST-INTELLIGENCER REPORTER

A judge yesterday declined to accelerate proceedings in The Hearst Corp.'s legal dispute with The Seattle Times Co., prompting Hearst to reiterate that it must put the Seattle Post-Intelligencer up for sale.

"As stated in previous papers filed in court, we will be required to find a buyer for the Seattle Post-Intelligencer as a result of a provision triggered by The Seattle Times Company," said Debra Shriver, Hearst's chief communications officer, in an e-mail to a P-I reporter yesterday.

She didn't return calls seeking details.

The e-mail was sent after a decision by King County Superior Judge Greg Canova setting Sept. 12 as the first hearing in Hearst's suit, which seeks to block an attempt by The Seattle Times Co. to unravel the joint operating agreement under which both papers are produced.

Hearst, which says the P-I can't survive without the JOA, had been seeking an earlier date for that hearing. It had twice said in court filings that it would be compelled to put the paper up for sale if Canova didn't speed up the suit.

The JOA requires one newspaper to move "as expeditiously as possible" to close once either paper says it has incurred three consecutive years of losses, as the Times has done. It doesn't specify which paper must close, but only Hearst is taking steps to do so.

Hearst's chief executive, Victor Ganzi, said in May that in order to close the P-I, Hearst must move quickly to demonstrate that the P-I is failing, which requires putting it up for sale and finding either no buyer or a buyer willing to publish it outside the JOA.

The JOA works under an exemption to antitrust laws created by the federal Newspaper Preservation Act, which promotes multiple editorial voices in a community by allowing competing papers to cooperate in ways otherwise unlawful. Ending such an arrangement hands a monopoly to the surviving newspaper, drawing close scrutiny from antitrust enforcers.

When JOAs have ended in some other cities, the U.S. Justice Department has required the closing newspaper to be put up for sale, to either find a new owner willing to operate it or to prove by the lack of willing buyers that the paper wasn't a viable business.

The first hearing in the Seattle case was initially scheduled for July 18 but was postponed to give a citizens group, The Committee for a Two-Newspaper Town, time to write briefs and prepare. P-I transportation reporter Kery Murakami, 37, said that beginning next week, he'll take a four-week unpaid leave from the paper to become a committee coordinator.

Murakami said the Pacific Northwest Newspaper Guild, which represents employees at the P-I and the Times and is underwriting the committee's lawsuit, will pay him the equivalent of his regular P-I salary for the month while he organizes volunteers and works to raise money for the 130-member group.

P-I reporter Dan Richman can be reached at 206-448-8032 or danrichman@seattlepi.com P-I reporter Todd Bishop contributed to this report.

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