Watching the region’s two newspaper giants go head-to-head in what is likely to be a ’til-death-do-us-part breakup, one gets a whiff of desperation, and of the sour sweat of fear, from both sides. Times vs. P-I: Who will live, and who will die? Round and round the merry-go-round goes, and where it’ll stop, who the fuck knows.
Here’s what we do know: Both sides have serious Achilles’ heels.
The Seattle Times Company is big, with seven newspapers, including the regionally dominant Seattle Times. The Hearst Corporation, owner of the Seattle Post-Intelligencer, is big on a different scale, owning 12 dailies (and beaucoup other media assets). However, recent developments make it clear that Times publisher Frank Blethen is short on cash, which complicates his hand in his upcoming legal battle with the P-I [“Legal Papers,” Sandeep Kaushik, May 1]. Meanwhile, Hearst’s legal position seems tenuous.
Seattle’s newspaper war, then, is not the story of big taking on huge; rather, it is the weak pummeling the weak.
Frank Blethen’s finances are shaky (he’s all but admitted he’s afraid of being driven under if the P-I survives his effort to kill it). We don’t know exactly how shaky (yet), but there are ominous signs. Recently, he put some Renton land up for sale (asking price: $12 million), canceled a land deal with the city (take: $1 million), announced cutbacks at his Maine papers (about 28 jobs lost), and asked his employees there to take one-week unpaid furloughs (they refused).
In noncompliance on his loans in 2001, he cut $40 million from the budget, before boosting newsroom expenses 17 percent last year as he hired 71 full- and part-time newsroom staffers in a slipping economy. With the economy still weak and facing an ongoing sea of red ink, last month he said he would cut $40 million again if that’s what it takes to preserve his ownership.
But that may be easier said than done. Hearst, in its lawsuit filed last week, accused Blethen of deliberately losing money last year so he could break the joint operating agreement (JOA) between the papers and kill the P-I. If he starts making big cuts now–particularly if he starts laying off last year’s hires–he will make Hearst’s claim appear much stronger, and this is a lawsuit he can’t afford to lose.
Whatever was driving Blethen’s hiring decisions last year, the P-I is going into the legal fray on shaky ground too. Hearst execs signed off on the 1999 JOA, which contains the clause that allowed the Times to call for the closure of the P-I. The document is so shockingly vague that they may have an uphill struggle convincing a judge to put the kibosh on Blethen’s move, especially since their high-powered legal advisors apparently never saw the need to define basic issues, like what constitutes a legitimate editorial expense, in the agreement.
