Group drops JOA lawsuit

The last remaining legal conflict over whether Seattle will retain two daily newspapers ended Wednesday when a citizens group voluntarily ended its lawsuit against the papers' owners.

The Committee for a Two-Newspaper Town said it withdrew its 2003 complaint against The Seattle Times Co. and The Hearst Corp., which owns the Seattle P-I. But the group warned that it might intervene again in the matter.

"If it turns out that the newspapers, who have withheld information about their recent settlement, do not intend to maintain the separate editorial voices that have served Seattle well, CTNT stands ready to represent the interests of readers as needed," the group said in a statement.

Hearst pre-emptively sued The Times Co. in April 2003 to prevent its rival from withdrawing from a joint operating agreement, or JOA, governing their business relationship. Under the JOA, The Times Co. handles key business functions for Hearst in exchange for a larger share of the joint profits.

Hearst claimed it couldn't keep publishing the P-I outside the JOA, while The Times Co. said the agreement was ruining it financially.

The owners settled the dispute in April. Hearst agreed to pay The Times Co. $25 million for The Times Co.'s agreement to stop trying to end the JOA until at least 2016. Hearst also said it would drop all legal claims against The Times Co., including allegations of circulation- and promotion-related abuses of the JOA.

And, in exchange for a $49 million payment from The Times Co., Hearst agreed to give up the 32 percent interest in The Seattle Times' future profits or losses it had stood to receive if it folded the P-I.

The Times Co.'s payment to Hearst is due in August, and the new 53-page JOA -- which imposes several new limits and requirements on The Times Co. -- doesn't begin until the payment is received.