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P-I gets a ‘new beginning’ as Seattle papers settle

Tue., April 17, 2007

SEATTLE — Seattle’s two daily newspapers have agreed to settle a legal dispute that threatened to close the Seattle Post-Intelligencer, lifting a cloud that has hung over the city’s journalism industry for four years.

The Seattle Times Co. and Hearst Corp., which publishes the P-I, announced the settlement in separate statements. The two had been headed for binding, closed-door arbitration to settle disagreements over their joint operating agreement, which The Times contended was no longer financially viable.

“It’s a new beginning for the P-I,” said Hearst spokesman Paul Luthringer.

Under the agreement, which took effect in 1983 to save the P-I, The Times handles printing, circulation and advertising for both papers, and keeps 60 percent of their joint profits.

Hearst will pay The Times $25 million in exchange for not seeking to end the agreement before 2016. The Times, meanwhile, will pay Hearst $49 million to settle the litigation and buy Hearst’s right to collect 32 percent of their joint profits through 2083 if the P-I closes — “Now no one can argue that Hearst might have a financial interest in seeing the P-I fold,” Luthringer said.

“We are happy to have found common ground,” Times Chief Executive and Publisher Frank Blethen said. “Both newspapers were at risk due to the dramatic erosion of the newspaper revenue model in this decade. Now we can each focus on publishing newspapers that are relevant to our community while we work at adjusting the old business model to the new realities.”

Reporters and editors at the P-I, some of whom had taken side jobs as professors or bartenders in case the paper closed, greeted the news with relief. They burst into applause when Publisher Roger Oglesby walked into the newsroom with several lawyers who worked on the settlement.

“It’s just great to be able to plan a summer vacation and not worry that we’re going to come back and find the key doesn’t work in the door,” said P-I reporter Chris McGann.

“We’re pleased. This is at least a 10-year reprieve” for the joint operating agreement, said Phil Talmadge, a former state Supreme Court justice who co-chairs the Committee for a Two-Newspaper Town, which intervened in the legal dispute. “The people of Seattle will be well-served, and the Times and Hearst will have an opportunity to prove that the JOA can be profitable for both newspapers.”

Also as part of the agreement, The Times agreed to name an executive to oversee the P-I’s circulation, which has dropped dramatically in recent years; to guarantee the P-I equal color production quality and color printing capacity; to let the P-I handle its own image promotion; to repaint circulation trucks with equal branding for the two newspapers. The P-I had long complained that The Times promoted its own circulation at the P-I’s expense.

Times spokeswoman Jill Mackie said the JOA will be amended with the settlement, which will become public after it is reviewed by the Department of Justice.

The P-I’s average weekday circulation is 126,225; The Times’ is 212,691, according to the most recent figures from the Audit Bureau of Circulations.


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