Seattle Times Company helps Hearst with P-I's online successor

The Seattle Times Co. is providing some help to its longtime rival, The Hearst Corp., as Hearst launches an online successor to its shuttered Seattle Post-Intelligencer.

For its first 30 days, the revamped Seattlepi.com will receive "consulting and transition services" from The Times as part of an accord terminating the joint-operating agreement (JOA) that had linked the two newspapers for 26 years.

The companies have not made the three-page "termination and settlement agreement" public, but a copy was obtained from the office of Washington Attorney General Rob McKenna. Among other things, it says The Times and Hearst won't sue each other in the future over any matter arising from the JOA.

The agreement took effect Tuesday, the same day the P-I's final print edition was published.

The JOA had been scheduled to run until 2083.

The termination agreement doesn't spell out exactly what services The Times is providing to the overhauled Seattlepi.com, which Hearst launched Tuesday with a news staff a fraction the size of its defunct newspaper's.

The Times ran the business side of the Post-Intelligencer's Web site under the JOA. A new Hearst subsidiary assumed those responsibilities this week.

The termination agreement says some of the services The Times is providing are listed in a March 3 memorandum from P-I Publisher Roger Oglesby to Times Co. President Carolyn Kelly.

Neither Oglesby nor The Times would provide a copy of that memo, and a spokeswoman for McKenna said his office didn't have it.

Under the JOA, which provided a partial exemption from federal antitrust laws, The Times and P-I maintained separate news and editorial operations, while The Times handled advertising, circulation, production and other non-news functions for both papers — print and online.

In return, The Times kept 60 percent and gave Hearst 40 percent of any money remaining after The Times was compensated for the papers' combined non-news expenses.

According to the termination agreement, no more cash will change hands between the one-time partners.

The Times will keep any JOA money still owed to Hearst, pay all the costs it incurs related to termination and provide assistance to Hearst's new Web operation until mid-April without charge.

No dollar figures are provided for any of those expenses.

Earlier this decade, The Times invoked an "escape clause" in the JOA contract, which could have led to the P-I's closure. Hearst filed a lawsuit in response, touching off a four-year legal battle that the companies settled in 2007, with the P-I remaining alive.

A group called the Committee for a Two-Newspaper Town intervened in that fight, and later expressed concern that — despite the settlement — the two companies actually had struck a deal to close the P-I in the future. Both companies denied any such arrangement.

Kathy George, the committee's lawyer, said the group "will be taking a close look at the legal implications of this new [termination] agreement with antitrust concerns in mind."

But the committee also wants the financially troubled Times to survive, she added.

Both McKenna's office and the U.S. Justice Department said earlier this week that the P-I's shutdown and the JOA termination do not violate antitrust laws.

Joint-operating agreements were authorized by Congress in 1970 to keep two or more newspaper voices alive in markets that could support just one.

A total of 27 JOAs have operated since then. With the Seattle contract's termination, six remain that still publish two newspapers.

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