Group will continue challenge to Seattle newspapers

The committee that says it represents the public in Seattle's long-running newspaper dispute signaled Wednesday it intends to keep fighting the owners of the city's two dailies indefinitely, despite a setback in court.

The Committee for a Two-Newspaper Town (CTNT) said it won't drop its antitrust claims against The Seattle Times Co. and The Hearst Corp. unless they promise to keep publishing both The Times and Hearst's Seattle Post-Intelligencer for at least the next 12 years.

The group also indicated it hasn't been convinced that a recent settlement between the companies will keep both papers alive for the foreseeable future, despite the companies' assurances that it will.

The committee issued its statement hours after King County Superior Court Judge Greg Canova rejected its bid for more information about the settlement, which ended a four-year lawsuit between the Hearst and The Times.

CTNT is an intervener in the suit but not a party to the settlement. In court papers, it has raised the possibility the companies might have a secret understanding to close one paper, a suggestion The Times and Hearst have angrily denied.

The companies say the settlement, announced April 16, makes the committee's antitrust claims against them moot, and that they will move for dismissal. Canova is scheduled to hear those motions July 20.

"CTNT is wasting everyone's time and money by needlessly prolonging this litigation," Hearst lawyer Kelly Corr said in an e-mail Wednesday.

But the committee indicated it will appeal if it loses before Canova. Its co-chairs did not return calls seeking additional comment.

The Times and P-I maintain competing news operations, but The Times handles the business side for both under a federally approved joint-operating agreement (JOA). In return, it gets a larger share of the combined proceeds.

The companies' legal wrangling began in 2003 when The Times moved to trigger an escape clause in the JOA contract that could have led to closure of the smaller P-I.

The settlement consists of two documents, a six-page settlement agreement and a 53-page revised JOA contract.

It calls for Hearst to pay The Times $25 million in return for a Times commitment not to trigger the escape clause again until at least 2016.

It also requires The Times to pay Hearst $49 million. The settlement agreement says some is for Hearst dropping its legal claims against The Times, and the rest for Hearst giving up its right to 32 percent of The Times' profits until 2083 if the P-I ever closes.

But the precise breakdown has been redacted — edited out — of the versions of the agreement provided to the public and the committee.

In the motion Canova rejected Wednesday, the committee said it wanted those numbers to help determine the companies' intentions.

A large payment to Hearst for the 32 percent now might be intended as compensation for the New York-based company to voluntarily close the P-I later, the group suggested.

The committee on Wednesday called on Hearst to promise not to voluntarily close the P-I before 2019. While the settlement bars The Times from taking steps to shut down the P-I until 2016, that prohibition doesn't apply to Hearst.

Corr would not comment on CTNT's request. But P-I Publisher Roger Oglesby said April 16 that the newspaper industry was too volatile now for Hearst to say unequivocally the P-I would continue to publish until 2016.

CTNT also said the newspapers' settlement should be revised to extend from 18 months to three years the time both papers would continue to publish should one paper trigger the JOA's escape clause.

Times spokeswoman Jill Mackie said the committee's decision to keep fighting in court threatens both papers economically.

"Our long and ongoing financial challenges demand we focus all our attention on efforts to increase revenue and overall audience... ," she said in an e-mail. "CTNT's continued efforts to litigate jeopardize that."

Corr agreed. "The P-I and Times settlement achieved what CTNT wanted," he said. "CTNT wanted Seattle to remain a two-newspaper town — that has happened."

Both companies said they were pleased with Canova's refusal to give the committee access to more information about the settlement.

CTNT said it now may be forced to defend itself July 20 "without access to the relevant information that is being withheld by the newspapers."

The breakdown of the $49 million Times payment to Hearst is the only detail that has been censored from the settlement documents. The companies have consistently refused to say why it's important to them to keep that information confidential.

On the day the settlement was announced — before the documents had been released — Times executives were asked at a news conference how much of the $49 million was for Hearst's right to 32 percent, and how much was for Hearst dropping its claims.

"We haven't allocated it that way," Times President Carolyn Kelly answered.

When the settlement agreement was made public eight days later, however, it revealed there was such a breakdown.

Mackie said last week that Kelly was speaking not of the $49 million, but of the settlement in its entirety.

The Times and Hearst originally intended to keep the settlement agreement confidential. Its existence was acknowledged, and it was finally made public, after observers noticed the revised JOA made no mention of the $49 million payment, which the companies had said from the start was part of the deal.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com