Confirming its previous statement that it is no longer interested in acquiring The Seattle Times, Hearst Corp. said today that it won'êt make a final $1 million payment to the Times'ê majority owners, the Blethen family, for the right to bid first for the Blethens'ê 50.5 percent stake in the company.
In an e-mail to the Committee for a Two-Newspaper Town, the Seattle citizen group that had asked Hearst earlier this week to elaborate on its plans for the Seattle Post-Intelligencer, Hearst declined to give any additional information about the digital future of its own paper, The P-I. But it did say that a digital P-I would operate outside the joint-operating agreement that his linked the two dailies commercially since 1983.
Hearst has said it is considering turning The P-I into an electronic paper when it shuts down the print edition of the 146-year-old paper. 'êWe are still studying that possibility and no decision has been made,'ê Eve Burton, Hearst'ês general counsel, said. Hearst announced Jan. 9 that it lost $14 million on The P-I last year and anticipated an additional loss in 2009. It said it was trying to sell the print P-I and would shut the paper down in 60 days if no buyer is found.
'êWe share your sadness regarding the dramatic changes in the newspaper industry that have necessitated Hearst putting the Seattle Post-Intelligencer up for sale,'ê Burton wrote to the Committee'ês co-chairs, Anne Bremner and Phil Talmadge. 'êAs both of you know, Hearst made every effort to keep the P-I alive.'ê
Burton'ês e-mail said that if The P-I were to become an e-paper it would be outside the joint operating agreement (JOA). But Hearst'ês attorney did not elaborate on how that would be accomplished. A 2007 settlement agreement between Hearst and the Times Co. does not provide for a quick unilateral shutdown of the JOA, even if one paper ceases to publish.
Under the settlement, The Times has to approve any effort by Hearst to default on the JOA and end the agreement. That would take at least 90 days from any move to default by Hearst. 'êThere are various ways to end the JOA,'ê Committee attorney Katherine George told Crosscut. 'êWe don'êt know what discussions have taken place between Hearst and the Times.'ê Another factor might be stipulations by the Department of Justice, which must approve the termination of one of the two dailies in the JOA.
George said the Committee appreciated Hearst'ês response to a list of questions it submitted to the New York-based media company. 'êBut the biggest question for us that is still unanswered is whether the P-I will survive as a Web-only paper,'ê she said. George said the Committee plans to issue a statement later today on what it plans to do next.
Update: The Committee's response can be found here.
