Your News, Their Secrets

An ex–P-I reporter, now a practicing attorney, aims to open up the closed-door negotiations that could close her former paper.

The Seattle Times' 2006 investigative series called "Your Courts, Their Secrets" has already won a National Headliner Award, came close last week to winning a celebrated Goldsmith Prize for Investigative Reporting, and is said to be a finalist for a Pulitzer Prize next month. Using lawsuits to force local courts to open case files previously sealed by judges, the paper uncovered stories about a 13-year-old girl raped while in the state's care, school principals who ignored a teacher's fondling of students, and a medical malpractice suit that cost the University of Washington more than $3 million, to mention a few. In a pat on its own back, the Times said the series changed the way the courts operate and that the practice of file sealing "has evaporated."

Good for the Times. But when it comes to its own legal affairs on matters of public import, the newspaper has taken the opposite tack. The Seattle Times Co. is refusing to allow a citizens' group to view legal documents or sit in on a key arbitration hearing next month on its 24-year-old joint operating agreement (JOA) with the Hearst Corp.'s Seattle Post-Intelligencer—a session that could determine whether the city of Seattle continues to have two daily newspapers.

"Ironic, isn't it," attorney Kathy George says with a wry smile. "We raised a similar point [about the Times' hypocrisy] in our arguments." A former P-I reporter, George is hoping to save her old newspaper in the courtroom, acting as legal counsel for the Committee for a Two-Newspaper Town (CTNT).

In court papers, George noted that "the Times and Hearst have been leading advocates in our state and federal courts for openness in the civil and criminal justice systems," even going to court, as the Times did, for example, in the file-sealing series last year, to pry out secrets. "In light of the considerable body of case law that the Times and Hearst have developed in an open justice system, it is ethically and legally indefensible for them to insist upon secrecy in their own legal dispute."

King County Superior Court Judge Greg Canova wasn't moved. He agreed with the two publishers' attorneys that they didn't have time to share their arbitration documents with CTNT, and told the citizens' group it will have to wait until the papers conclude their private talks before he rules on CTNT's arguments. But by then, George worries, "ours may be a moot point."

In a closed-door, legally binding arbitration hearing set to start April 9—effectively, a hush-hush civil trial—the Times will be secretly negotiating the future of local journalism with the P-I, its news rival and business partner. Despite their regular crusades for the public's right to know, neither paper is willing to hand over any of the documents requested by CTNT, which is trying to intervene in the public interest. Nor do the papers want any outside observers at the table as they decide which one of the century-old papers, most likely the P-I, might be put to death. A ruling is expected by the end of May.

In print, neither the Times nor the P-I editorial pages—the playground of their publishers—have felt compelled to rail about the legal blackout imposed by the owners or about the papers' attempts to stifle citizen intervention in the talks. Yet, "Both sides have agreed to not appeal the decision—once that decision comes down, it's an irreversible process," says George. (Though new scenarios could emerge later.)

George sees this as more than just a business decision. She was a P-I reporter and editor for 15 years, while she also went to law school. She was admitted to the bar in 2005 and was a state Supreme Court law clerk before joining the Gendler & Mann law firm. "I loved newspapering," she says. "But law is exciting, and you can have a more direct effect than journalism."

Now 45, the journalist within her doesn't want her last newspaper to end up like her first, the Birmingham, Ala., Post-Herald. After 55 years, it closed its doors in 2005, another victim of newspaper economics in an online era. George got her start as a reporter there two decades back.

"A newspaper can be a great force for making a difference in a positive way in government and politics," she says. And two papers obviously are a greater force. "I think everyone understands that. Their competition makes us all better off."

Her rowdy group, CTNT, includes retired P-I reporter Jane Hadley, Seattle attorney Anne Bremner, and ex–Supreme Court Justice Phil Talmadge. They fear the effects of a Times news, editorial, and advertising print monopoly on Seattle if the P-I, the "Voice of the Northwest," is silenced. CTNT is challenging the Times' effort to kill off the P-I and also contends that the papers' business partnership violates antitrust laws.

George is filing briefs and making arguments along with attorneys and fellow idealists Mickey Gendler and James Lobsenz, greatly outnumbered by the well-paid newspaper law firms. "We hope and expect to get paid, someday," George says, "if someone raises some funds." (Someone did, two days after we talked.) Board member Bremner says donors aren't giving a lot—she gave $800 herself. "But," says Bremner, "no one's in this for the money. It's about civic preservation and not waking up some morning with one newspaper."

"I'm emotionally attached to the people" at the P-I, George says. "We're not dismayed. There's still a lot that can happen."

Should the Times emerge victorious from the arbitration, and pull out of the JOA, the P-I would begin to die in installments, George notes. A full shutdown could come as early as Nov. 31 this year, the newspapers' attorneys have told her, although that could be extended by four months or longer.

If the P-I prevails in arbitration, the JOA—which allowed the papers to merge printing, advertising, and circulation departments under the Times but to retain competing news and editorial departments—is expected to continue indefinitely and could be renegotiated or evolve into a new legal battle.

Among other scenarios, deep-pocketed Hearst, which has first option of buying the Times, could take over that paper and close the smaller P-I, as it did in San Francisco when it bought the dominant Chronicle and sold off the dying Examiner in 1999.

Even if it folds the 144-year-old P-I and pulls out of Seattle, Hearst could still be in the catbird seat: Under the JOA, Hearst would get 32 percent of the Times' profits until 2083—going from printing newspapers to printing money.

"The effect of a business deal," when involving a community's newspapers, "shouldn't be decided behind closed doors," says George.

Times corporate spokesperson Jill Mackie says closed-door arbitration is "routinely used" in business disputes and both the Times and P-I agreed it was the quickest way to settle a battle that's now in its fourth year. "Time is a driving factor," she says. Hearst corporate spokesperson Paul Luthringer did not respond to requests for comment.

The Times Co. and Hearst are expected to argue over economic factors and failed promises. Arbitrator Larry Jordan, a former judge, likely will decide whether or not the Times Co. can legally pull out of the JOA, created in 1983 and amended in 1999. Though the Times Co. takes some of its production costs off the top and gets to keep 60 percent of what's left over, the Blethen family ownership claims the Hearst-owned P-I has become a heavy burden, sapping money from the joint operation and imperiling the Times, too.

Times publisher Frank Blethen says that losses for up to six years in a row entitle the paper to exercise a JOA escape clause. Among other effects, that would leave the P-I without a press to print on.

Hearst contends that the Blethens haven't suffered the financial losses they claim. For that matter, Hearst feels the P-I's continued circulation free-fall, losing about 60,000 subscribers since 2000 (and standing at 125,000 today), resulted in part from poor promotion and distribution practices by the Times (circulation about 212,000). However, critics say Hearst should take the blame for historically underfunding an inconsistent product.

Insiders believe the New York publishing giant may also try to prove that some of the P-I's readership slide was deliberately caused by the Times.

One P-I executive says privately that the Times' decision in recent years to pull back home delivery and local distribution from the far reaches of Western Washington hit the P-I the hardest. "We were the regional paper; the Times was the Seattle paper. Pulling out of those small towns was a dagger in the P-I, in my view, and they [the Times] knew it," the executive says.

Actually, if the P-I stops printing one of these days, George doesn't think that's all bad—not if it continues publishing online.

With Hearst pulling in about a third of the profit from the Times under the rewritten JOA, the publishing giant could see fit to invest in an electronic edition of the P-I, relying on a downsized newsroom. To some publishing experts, that's the newspaper of the future anyway: Web only.

"You know," George says, "I don't think we'd oppose that." By her count, that's still two newspapers.

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