You still can read all about it twice in Seattle as deal retains 2 papers

This city will remain a two-newspaper town -- for now -- under a deal reached Monday by the Blethen family, which controls the Seattle Times, and the Hearst Corp., publishers of the smaller Seattle Post-Intelligencer.

But even as Times publisher Frank Blethen announced a settlement in a bitter 4-year-old legal dispute over the papers’ joint operating agreement, he said he doubted the deal would be a permanent solution to keep both papers operating.

“I’m still very skeptical it’ll work,” Blethen said at a news conference. “I don’t know if newspapers will survive, period.”

On the other hand, the publisher praised the deal for keeping both newspapers alive.

“My guess,” he said, “is that we’ll have two newspapers longer than just about any other city.”

Under the deal, the Times will pay a net $24 million to Hearst, while Hearst will give up a provision of the joint operating agreement that entitled it to collect 32% of any future profits for the next 79 years if the Post-Intelligencer were closed.

The deal must still be approved by the Justice Department, which oversees joint operating agreements -- or JOAs -- that allow newspapers to offer distinct editorial voices even as they pool their printing, advertising, circulation and other departments.

In Seattle, the Times handles those duties and keeps 60% of the joint profits, under a JOA dating to 1983.

But the company said there were no profits in recent years, a condition that would allow it to withdraw from the JOA -- and almost certainly leave the P-I to die, since Hearst would be unlikely to invest the money needed to start publishing on its own.

Hearst disputed the Times’ contention of unprofitability, and the two papers were headed toward binding arbitration as Monday’s deal was announced.

It was a “new beginning for the P-I,” a Hearst spokesman said.

The Times’ average weekday circulation is about 212,000, according to the most recent figures from the Audit Bureau of Circulations, while the P-I’s is 126,000.

For the Times, the deal appears to head off a longer-term threat that Hearst, with deeper pockets, might mount a drive to take over the family-owned company and thus wind up with the dominant newspaper in town. (In San Antonio, Hearst acquired a larger rival, the Express-News, and then closed down its own paper, the Light; in San Francisco, it acquired the Chronicle and sold the smaller paper it had owned there, the Examiner.)

The Times is one of a dwindling number of U.S. daily papers controlled by a local family.

The Blethens are held in generally high regard among industry watchdogs for having “demonstrated a willingness not just to talk the talk but walk the walk when it comes to investing in the newspaper,” said Alex Jones, director of Harvard’s Joan Shorenstein Center on the Press, Politics and Public Policy.

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sam.verhovek@latimes.com