Suit seeks to block Utah newspaper deal, argues it dooms The Tribune
By TONY SEMERAD
The Salt Lake TribuneFirst published Jun 16 2014 12:27PM
The Salt Lake Valley is best served by two daily newspapers but a recent deal threatens to close The Salt Lake Tribune, a lawsuit filed Monday claims.
Former Tribune employees are asking a federal judge to immediately halt financial dealings between the paper and its main rival, the LDS Church-owned Deseret News.
The group, dubbed Citizens for Two Voices, filed its suit Monday morning in U.S. District Court in Salt Lake City, in hopes of quick relief in a controversy that has been building since last fall, when word of the secretly crafted deal between executives of Utah’s two largest dailies first leaked out.
"For more than a century, the News and Tribune have competed for readers in the Salt Lake Valley. The rivalry, while occasionally contentious, has served the community well," argues the suit, which includes supporting statements from a prominent Utah Republican, a leading newspaper advertiser and a former top Tribune editor.
The recently renegotiated Tribune-News business pact violates federal antitrust laws, says the lawsuit, which seeks a preliminary injunction to block the papers’ new profit-sharing split and other key provisions of the partnership.
"We really just couldn’t wait any longer,’’ said Salt Lake City attorney Karra Porter, who represents Citizens for Two Voices. "We’re very concerned that The Tribune could be out of business potentially even by this summer."
Though competitors, The Tribune and News work together on key operations such as advertising and delivery, under a federal law that allows rival newspapers to cooperate on business functions if it helps preserve separate news-gathering operations for the public good.
That law, the Newspaper Preservation Act, gives the U.S. Department of Justice a say in how joint-operating agreements between papers are structured.
A DOJ official confirmed Monday that its lawyers were investigating recent changes to the Tribune-News partnership and said the lawsuit filed Monday was unlikely to affect its ongoing probe.
"We are proceeding separately,’’ the federal official said.
Citizens for Two Voices is another name for the Utah Newspaper Project, which has been pushing since last fall for federal scrutiny of the new joint-operating agreement, signed by top managers at the News and officials working for The Tribune’s corporate owner, New York-based hedge fund Alden Global Capital — without input from local Tribune managers.
Citizens for Two Voices is headed by Joan O’Brien, a former Tribune reporter and editor.
"Over the last three months, we’ve had a lot of response from the community and they feel an ownership in this paper," said O’Brien, who is the daughter of late Tribune Publisher Jerry O’Brien and is married to Tribune reporter Tom Harvey. "Even though they don’t technically own it, they want a place at the table."
The group’s lawsuit targets Deseret News Publishing Co., which runs the News on behalf of The Church of Jesus Christ of Latter-day Saints, and Kearns-Tribune, the company through which The Tribune is owned by Alden.
Deseret News CEO Clark Gilbert did not respond Monday to a request for comment.
John Paton, CEO of Digital First Media, which operates The Tribune and 75 other U.S. dailies on Alden’s behalf, declined to comment for this story.
The suit notes that the papers’ new business deal, which took effect Jan. 1, slashed The Tribune’s revenues from the partnership in half, sold its share in printing facilities and gave the News control over the newspapers’ joint operations.
The new pact also grants managers at the News veto power over anyone interesting in buying The Tribune.(Industrialist and philanthropist Jon Huntsman Sr. has expressed interest.) More crucially, the deal deprives The Tribune of money it needs to survive, the lawsuit claims.
Court-ordered preliminary injunctions are extraordinary, the suit concedes, "but the loss of a daily newspaper, and particularly the Salt Lake Valley’s only secular daily, would result in irreparable and immeasurable harm."
Any actions federal lawyers may eventually take in the case "will be too late," the suit warned.
The Tribune has already laid off about 30 percent of its staff and scaled back key offerings, including its award-winning Faith section, the lawsuit notes. And, with the start of a new budget year approaching July 1, "The Tribune is bleeding out, more layoffs are likely, more reductions in news-gathering and reporting are imminent,’’ it says.
"Utahns understand the need for this balance — for two voices," the 35-page lawsuit contends. "Even thosewho are loyal to the competing News and its owner, or who have been on the receiving end of Tribune barbs or [editorial cartoonist] Pat Bagley caricatures, understand it. So do businesses looking to locate here, and advertisers, and the individuals who formed Citizens for Two Voices."
The suit includes affidavits in support of The Tribune from state Sen. Curt Bramble, R-Provo; leading print advertiser Jeff Miller of Mark Miller Toyota in Salt Lake City; and Don Gale, former longtime editorial voice for LDS Church-owned KSL-TV.
In his affidavit, Bramble said The Tribune’s editorial voice was crucial to maintaining diversity in Utah’s media scene and its broader culture.
"That role cannot be fulfilled by a sectarian source of media such as the Deseret News,’’ the state senator said in his declaration. The Tribune, Bramble said, helped counter the perception of a strong invisible hand of the LDS Church dominating aspects of Utah society.
"When I, as an advocate of business in Utah, can point to The Salt Lake Tribune as a robust independent presence,’’ he said, "the concerns about a monolithic, sectarian culture are largely assuaged."
Bramble called The Tribune’s journalistic pursuits "critical" to Utah. "For example,’’ he said in his affidavit, "it is The Salt Lake Tribune, and The Salt Lake Tribune alone, that has been doggedly pursuing the story surrounding the controversy with former attorneys general of the state of Utah" John Swallow and Mark Shurtleff.
The Tribune ceasing to publish also would substantially damage the ability of major local advertisers to reach customers, Miller said in his affidavit.
A good portion of Salt Lake City readers "absolutely will not consult the Deseret News because of its sectarian nature, either in print or on the Web," Miller said. Loss of the Tribune "would not merely be a shift of advertising presence from one newspaper to another," he said. "[T]here would be a net loss from newspaper advertising, and it would be permanent."
The suit also includes a sworn statement from former Tribune Editor Nancy Conway, who retired in September. Based on nearly a decade of responsibility over the paper’s finances, Conway said the new profit split of 70 percent for the News and 30 percent for The Tribune "more than handicaps The Salt Lake Tribune."
The joint-operating agreement "almost certainly lays the way to The Tribune’s demise," Conway said, "because the JOA will not yield sufficient revenue for The Tribune to cover costs.’’