JOA legal fight officially ends

The legal fight that pitted the owners of Seattle's two daily newspapers against each other for four years is officially over.

King County Superior Court Judge Greg Canova last week dismissed the lawsuit The Hearst Corp., owner of the Seattle Post-Intelligencer, filed against The Seattle Times Co. in April 2003.

Both companies had requested the dismissal.

The Times and Hearst announced this April that they had settled the long-running dispute. But they agreed to delay asking Canova to dismiss the lawsuit until the settlement became final. And they agreed the deal would close only after The Times and its owners did two things.

First, The Times would pay Hearst $24 million. Second, the family-controlled Blethen Corp., The Times' majority owner, would agree to extend — potentially to 2083 — Hearst's previously negotiated first right to buy the Blethens' stake in The Times if the family ever sells.

Both conditions were met and the settlement closed Aug. 1, Times spokeswoman Jill Mackie said in an e-mail.

Times officials had said previously they intended to borrow the money to pay Hearst. Recent federal securities filings by The McClatchy Co., The Times' minority owner, indicate that, when tax impacts are factored in, the net cost of the payment will be about $16 million.

The Times and P-I have been linked since 1983 by a joint-operating agreement (JOA) under which The Times markets, prints and distributes both papers in return for a larger share of the joint proceeds.

The papers still maintain separate, competing news and editorial operations.

Hearst sued in 2003 after The Times moved to trigger an escape clause in the JOA that could have led to the P-I's closure. The April settlement was announced on the eve of a climactic binding-arbitration hearing.

The Times agreed not to trigger the escape clause again until at least 2016. Hearst agreed to give up its previous right to 32 percent of The Times' profits if the P-I ever shuts down.

A revised JOA took effect at closing. It includes a host of changes aimed at boosting the smaller P-I and giving Hearst a bigger voice in decisions affecting the papers.

The Times, for example, is required to provide an executive devoted primarily to building P-I circulation.

P-I Publisher Roger Oglesby said Monday that hadn't happened yet but "something is being worked out," and the executive is likely to be someone already on The Times' payroll.

The Times also must, at its expense, repaint trucks that bear only The Times brand to include the names of both papers. That hasn't been completed yet.

Mackie declined to comment, except to say "the parties are working together to implement the terms of the settlement agreement."

Another change gives Hearst, for the first time, a say in determining the minimum "newshole" — space devoted to news — at both papers. Hearst objected in 2002 when the Times increased the minimum, which is paid for from pooled revenues, for both publications.

At closing, Oglesby said, the minimum was rolled back by nearly 20 percent.

Each paper traditionally has paid for more space from its own coffers, however, and Oglesby said Hearst continues to do that for the P-I. He would not discuss changes in the P-I's total newshole but said the settlement has not affected it.

Mackie wouldn't discuss the impact of the rollback on The Times.

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