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Tribune, Deseret News bosses: There are no plans to close The Trib


By TONY SEMERAD

The Salt Lake Tribune

First published Jul 01 2014 10:58AM
Updated Jul 1, 2014 10:07PM

Neither The Salt Lake Tribune’s corporate owners nor top managers at the rival Deseret News have any plans to close The Tribune — "not this week, this month, this year, or ever."

Executives for both companies filed sworn statements late Monday aimed at countering a federal lawsuit that accuses them of crafting a business pact for running Salt Lake City’s daily papers that critics say is unfair, puts The Tribune’s finances at a severe disadvantage and should be reversed.

Assertions about the recently written Tribune-News business plan are "based on little more than conjecture and deep suspicion of the motives" of the parties who rewrote the agreement last fall, they claim in court documents. Instead of mortally wounding The Tribune, the amended joint-operating agreement (JOA) solidifies the newspaper’s future in digital publishing and enshrines special protections of its independent editorial voice, the filings say.

The new documents, filed in Salt Lake City’s U.S. District Court, also deny the revised JOA was crafted in secret and insist the deal cannot be undone, largely because a substantial cash payment the News made to Tribune owners Digital First Media ( DFM) to finalize the accord has been spent on the pension plans of certain employees, to pay down corporate debt and to buttress both papers’ positions in digital publishing.

"Salt Lake needs two newspapers,’’ Clark Gilbert, CEO of the LDS Church-owned Deseret News, said Tuesday on KSL Radio’s "Doug Wright Show." "It needs a diversity of media voices, and we’re committed to that."

The court documents come in response to a lawsuit filed two weeks ago by a group called Citizens for Two Voices, also known as the Utah Newspaper Project, made up of former Tribune employees, community members and others. The suit asks a federal judge to block the latest JOA between the two newspapers, signed in October and put into effect Jan. 1.

The group has also successfully urged antitrust lawyers from the U.S. Department of Justice to scrutinize the newspaper deal and their investigation is ongoing.

Joan O’Brien, who heads Citizens for Two Voices, said the new filings don’t directly address the main claims in the group’s suit — that the revised JOA is legally flawed under federal law. Missing from their case, O’Brien said, is any explanation for dramatic cuts to The Tribune’s share of profits, its loss of operational self-determination in the deal and giving the News veto power over future Tribune owners.

"They don’t offer any justification or legal rationale for three existential flaws in the JOA,’’ said O’Brien, a former editor at the paper who is married to Tribune reporter Tom Harvey.

Among other changes, the JOA cut in half The Tribune’s share of the two newspapers’ profits from advertising and circulation, sold The Tribune’s share in printing facilities in West Valley City and gave the News control over the board governing joint operations. The amended pact cut The Tribune’s share of profits from 58 percent to 30 percent and boosted the News’ from 42 percent to 70 percent.

"How is The Tribune’s viability ensured by a contract that cuts its revenues in half?’’ O’Brien asked. "How is its voice strengthened when the Deseret News has control over the entity that produces and distributes the newspapers? And how can anyone argue The Tribune enjoys editorial independence when the Deseret News holds a unilateral veto power over any ownership change?"

The JOA changes, according to a sworn statement from John Paton, CEO of New York-based Digital First Media, "recognize the reality of the newspaper business and enable it [The Tribune] to compete effectively as readers continue to migrate from print to digital media."

While paying down legacy costs from print, the pact let The Tribune take full control of its digital advertising revenues, Paton said, allowing it to expand those operations and invest in more digital-centric strategies. He and Gilbert claim the pact has strengthened The Tribune’s ability to cope as U.S. newspapers continue to suffer declining advertising revenues from print.

"The Tribune’s owners have no plans to shut down the newspaper," Paton said in a sworn affidavit. "To the contrary, they are working hard to ensure that The Tribune will be able to continue to publish a strong, independent news product."

Claims of a conspiracy between The Tribune’s owners and The Church of Jesus Christ of Latter-day Saints to mute "Salt Lake’s sole daily secular and investigative newspaper," the filings said, are unfounded.

"There have never been any discussions, either at the board level or among the executives of DFM, contemplating closing The Tribune," the companies’ filings say. "Any suggestions to the contrary can only be based on rumor and speculation."

Similarly, the documents say, the News’ leadership "has no plan or desire to cause The Tribune to cease publication." Gilbert said the new JOA was part of its own strategy of "migrating to digital while simultaneously maintaining and expanding its traditional print capabilities."

Undoing the deal now, Gilbert warned on KSL Radio, would do serious damage to The Tribune.

"The Tribune has a strong newspaper but for it to be viable in the future, it has to invest in its digital future,’’ Gilbert told Doug Wright. "But that is hard for people because it means they have to change."

The court filings also blame Citizens for Two Voices for interfering with a possible sale of The Tribune to several parties who have expressed interest in buying it, Utah magnate and philanthropist Jon Huntsman Sr. among them. Those talks have been put on hold, they claim in court documents, because of the lawsuit and scrutiny by federal antitrust attorneys.

In addition to disrupting The Tribune’s ability to do business and generating negative publicity about the revised JOA, the documents claim, "their efforts to inflame public opinion threaten to reduce circulation and advertising revenues by damaging the reputations and good will of both the Tribune and the News."

O’Brien, who is daughter of late Tribune publisher Jerry O’Brien, says the News, instead, has sought to block sale of The Tribune using its veto power over prospective owners, while also making the paper less attractive financially with its diminished profit split.

tsemerad@sltrib.com

Twitter: @Tony_Semerad

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