In an extraordinary sequence last week involving leaked memos and dueling accounts in the Seattle Times and the Post-Intelligencer, the papers staked out different positions on the future of their relationship. The papers exist under a Joint Operating Agreement (JOA), a deal that allows the dailies to compete editorially while sharing business operations.

Two weeks ago, The Stranger broke the story that Times Publisher Frank Blethen had plans to invoke JOA clauses that could kill the P-I ["One-Paper Town?," Sandeep Kaushik, Oct 10]. This week, Blethen publicly backpedaled while simultaneously continuing--in a company memo--to make no bones about his ultimate desire to eliminate the competition. Meanwhile, the Hearst Corporation, the conglomerate that owns the P-I, signaled that they would fight Blethen.

Things heated up on Thursday, October 17, when the Times issued a six-page employee memo. In it, Blethen directly contradicted earlier statements to Times editorial staffers that he was planning to kill the JOA; he insisted he did not know whether his paper would lose money for a third consecutive year, and even if it did, he had not decided whether to invoke the JOA clauses. (Those clauses stipulate that if either paper suffers three consecutive years of loss, it can demand that the papers negotiate over the closure of one paper. Should those negotiations fail, the JOA would dissolve after 18 months, and the P-I would have to survive on its own.)

Yet the memo, which railed against "speculative and inaccurate news stories," unwittingly lent credibility to those accounts. Blethen, congenitally incapable of suppressing what he really thinks, spent the bulk of the memo--under a thin veneer of spin--actually rehearsing his argument for ending the JOA. He claimed that Seattle could not support two dailies, and stated that drops in the P-I's circulation indicated market forces had turned in favor of the Times. "We know of no example in the industry where, once begun, the downward spiral of the second newspaper driven by marketplace choice has been reversed... we are very concerned we may no longer be able to hold P-I circulation levels," Blethen wrote. In his conclusion, Blethen left open the possibility that he might move to end the JOA next year--adding, in apparent acknowledgment of his contradictory statements, "We know this message might leave you still wondering what the talk about the JOA could mean... "

The memo was dutifully followed the next day with a story in the Times contending that "nothing has changed" with respect to the JOA. Though the story articulated the party line, reporter Sharon Chan courageously (and suicidally?) confirmed that Blethen had indeed told staff he would invoke the JOA clauses.

That same day, P-I Publisher and Editor Roger Oglesby finally resigned himself to his appointed role in the Blethen circus and issued his own memo, which, unsurprisingly, took a sharply different tack. Oglesby wrote that Hearst would live up to its obligations under the JOA, "and will insist on the Seattle Times Co. doing the same." He added that Hearst "believes neither party to the agreement has a basis for terminating it." Though a Hearst spokesperson declined to elaborate, some sources interpreted the latter statement as an indication that the Times, which has added nearly 80 staffers in the current economy, is vulnerable to charges that it is deliberately losing money, and risks an ugly court fight. On Saturday, October 19, the P-I reported on Oglesby's memo in a lengthy piece that stressed the Hearst position.

Oglesby also met with P-I staffers on October 18. Sources say he assuaged staffers' concerns, reiterating Hearst's commitment to Seattle and exhorting them not to be distracted by comments emanating from the Times. P-I sources stress that Hearst has spent millions to redo the P-I newsroom, install a new computer system, and bring on additional staff.

Times spokesperson Kerri Coughlin couldn't help firing back. Not only did she deride the Oglesby memo as "carefully worded," but, similarly to Blethen's memo, she left the door open to the possibility that next year Blethen could invoke the clauses. In repeating Oglesby's statement aloud, she stressed its qualified and temporal nature: "Hearst BELIEVES neither party... HAS a basis for terminating it." Still, she insisted, nothing has been decided.