On Tuesday the Deseret News board of directors declined to give managers of the Salt Lake Tribune consent to buy the Tribune from Denver-based MediaNews Group. The board vote was unanimous.
This brings to a climax the months-long dispute between the News and Tribune managers, the remainder of which will be played out in the courts.
Though the legal process has been chronicled at length in both newspapers, many Utahns remain confused about the basic facts. What follows is an attempt to minimize that confusion by responding to the 20 most frequently asked questions reaching the Deseret News.
The information has been compiled from interviews, past news stories, histories of the two papers and available court documents.
Question:Does the Deseret News own the Tribune?
Answer: No. The two papers are editorial competitors, but share production, advertising and circulation operations in the Newspaper Agency Corp., which they own as business partners.
Question:Does the Deseret News want to own the Tribune?
Answer: Absolutely not, in the words of L. Glen Snarr, chairman of the Deseret News board of directors. The News, he says, believes Salt Lake City should have two competing newspapers, independent of each other.
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June 3, 2001: McCartheys: Carrying the torch?
Question:Did the News ever seek to buy the Tribune?
Answer: The management of the News has never sought to control the editorial voice of the Tribune. In seeking a more equitable position in the NAC, which it believes the Tribune has dominated to the detriment of the News, it did try to buy the business operations, but failed. When the Tribune was sold in 2001 by AT&T to MediaNews Group, the Deseret News was invited to be a bidder, along with the McCarthey family, descendants of an early Tribune owner, but declined to bid.
Question:How did the Tribune and News become business partners?
Answer: After an intense five-year circulation battle after World War II, the Deseret News, Salt Lake Tribune and Salt Lake Telegram were all struggling financially. Owners met in 1952 to discuss a deal that would keep the News and Tribune in business.
The deal allowed both the Tribune and News to sign a "joint operating agreement" to maintain separate editorial voices while sharing business operations and costs. The Deseret News agreed to purchase the afternoon Salt Lake Telegram from the Salt Lake Tribune, thereby giving Tribune owners much-needed cash. The Telegram was discontinued, and into the mid-1960s, the afternoon paper's masthead read: "The Deseret News and Salt Lake Telegram."
Question:What is a "joint operating agreement"?
Answer: Congress decided more than a half century ago that communities are better served by having two competing editorial voices. So it created an exemption to federal antitrust laws whereby two newspapers could create a third company to provide production, advertising and circulation, thereby sharing costs and increasing the financial viability of both newspapers. The federal law governing such agreements was fine-tuned in 1970 as the Newspaper Preservation Act.
In Salt Lake City, this financial arrangement, commonly called a JOA, resulted in the creation of the Newspaper Agency Corp.
 | Deseret News graphic Utah population growth and newspaper circulationRequires Adobe Acrobat. |
The Tribune publisher is the president and the Tribune also names the treasurer; the Deseret News selects the vice president and secretary.
Question:Who owns the Salt Lake Tribune now?
Answer: MediaNews Group of Denver, which operates an empire of 46 daily and many weekly papers. The group's CEO is William Dean Singleton.
Question:Who is Dean Singleton?
Answer: Singleton is a Texas-born newspaperman who rose from humble beginnings to build and head one of the country's biggest media empires. A tough bargainer, with a sharp eye for the bottom line, he has become a significant figure in the history of American journalism. His flagship newspaper is the Denver Post, and he is currently chairman of the Newspaper Association of America, the voice of the industry's publishers.
Question:So how did Singleton come to own the Tribune?
Answer: Founded in 1871, the Tribune was acquired in 1901 by U.S. Sen. Thomas Kearns. Historians agree that Kearns used the paper primarily to further his political agenda before it was later steered by non-family members. The McCarthey family members who figure in today's dispute are great-grandchildren of Sen. Kearns. Along with other Kearns descendants and a handful of stockholders, they agreed to sell the Tribune in 1997 as part of a $731 million stock swap with cable giant TCI but with the caveat the family could seek to buy the newspaper back after five years, a time period needed to avoid tax liabilities.
Through careful structuring of the merger, Kearns-Tribune shareholders saved an estimated $152 million in tax liability, according to an August 1995 attorneys' memorandum. In February 1997 correspondence to the McCarthey family, former Tribune publisher Jack Gallivan called the deal "perhaps the richest family financial deal in Utah history."
The family negotiated a clause so interested members and their associates could continue to manage the Tribune until the 2002 purchase option came due. Organized as Salt Lake Tribune Publishing Co., they have been doing so for the past five years.
The Tribune changed hands once again in March 1999, when TCI merged with another telecommunications giant, AT&T Corp.
AT&T, which was not interested in newspaper ownership, began shopping the Tribune around, courting both the Deseret News and the Tribune managers, apparently among others. In the end, AT&T chose to sell the paper to Singleton's MediaNews, rejecting a lower bid from the Tribune managers.
MediaNews officially purchased Kearns-Tribune, the holding company of the Salt Lake Tribune, on Jan. 2, 2001. However, managers of the Tribune filed a federal lawsuit seeking to block the sale on Dec. 1, 2000, the day the deal was first announced.
U.S. District Judge Tena Campbell refused to block the sale. She did, however, issue an injunction barring any significant changes to the daily operations of the newspaper until the option was exercisable in July 2002.
Salt Lake Tribune Publishing Co. will continue running the newspaper until July 31. At that time, MediaNews is expected to take control of the Tribune, although the managers are seeking an injunction to retain control throughout an appeal of their lawsuit.
Question:Who are the McCartheys?
Answer: Two McCartheys, brothers Phil and Tom, are the principal players in today's proceedings, although other McCarthey siblings play minor roles. Originally minority shareholders in the ownership of the Tribune, they have gradually come to control 90 percent of the company that manages the paper and claims an option to buy it. Phil is currently in the insurance business and has played no role in the newspaper's day-to-day management over the years but apparently aspires to be publisher. Tom has made a career at the Tribune but appears to be disengaged.
Question:Why did the JOA relationship between the News and the Tribune sour?
Answer: Deseret News circulation slid between 1952 and 1982, part of a drastic nationwide decline in afternoon newspaper readership and rise in morning readership during the intervening decades. Tribune owners wanted to re-evaluate the original agreement's 50/50 profit split. After negotiations, the two sides compromised in 1982, agreeing to a 58/42 split in the Tribune's favor in exchange for several concessions afforded the News. Among these, the Deseret News reserved the right to publish a morning newspaper if its circulation fell below 35 percent of the Tribune's for two consecutive years.
Snarr first announced the News' intention to move to morning publication on Jan. 7, 1997. The letter was met with strong resistance from Tribune publisher Dominic Welch, who is also NAC president.
In his Feb. 19, 1997, reply letter, Welch informed Snarr that "The move cannot adversely affect The Tribune's operations in any way." Specifically, he said, the Tribune would not share its carrier or distribution force with the News. And, he said, the News must purchase a new $25 million press on which to print its papers.
Speaking on behalf of both the Tribune and the NAC, Welch wrote that the two organizations "will continue to view the morning field as primarily the Tribune's under the JOA. In the event that only one paper can go out — it will be the Tribune."
From that point on, the paper's relationship became contentious, and the issue of morning publication remained a hot-button issue on both sides.
Question:What are some of the Deseret News' main complaints with how the NAC is run?
Answer: The News believes the current NAC management, under the direction of Tribune publisher Welch and chief financial officer Randy Frisch, has repeatedly tried to "stifle competition" by delaying the News' move to morning publication. The perceived obstruction is the cornerstone of the Deseret News' complaints.
A November filing in the ongoing federal lawsuit outlines additional allegations. It alleges Tribune managers have mismanaged the NAC to the financial disadvantage of the News by limiting advertising and circulation promotions for the News, a requirement under the JOA.
Welch's longtime refusal to appoint an independent manager of the NAC — a post that had existed before he headed both the NAC and Tribune — has also been a sticking point. Shortly after entering the scene, Singleton brought in Joseph Zerbey as NAC general manager. However, Welch fired Zerbey after just six months.
In an August letter to NAC employees, Welch said the firing was done for financial reasons. Zerbey's $350,000 annual salary was too much at a time when NAC profits were down, he said.
Question:Why does the Deseret News want to become a morning paper?
Answer: Because the reading habits of Americans have changed dramatically in the past 50 years.
In 1950, 1,450 U.S. newspapers were published in the evening, and 322 were published in the morning, according to the Newspaper Association of America.
By the year 2000, the number of morning newspapers in the country had more than doubled, while almost half of the evening newspapers had switched to morning publication or folded. Today there are virtually no major metropolitan dailies publishing in the evening. Utah, for example, no longer has any other afternoon dailies.
"With the differences in people's schedules and lifestyles, (they) need to get their information earlier in the day," Deseret News general manager Fred Temby says. "They don't have time to spend with an evening paper as they once did."
The Tribune and Deseret News were essentially equals in terms of circulation in 1952. Fifty years later, the Tribune has increased its circulation by 41,677 readers, while the Deseret News has lost 27,112 readers. That at a time when the population of Utah has more than tripled.
The Deseret News wishes to publish in the morning as a matter of survival.
Question:When will the switch to morning publication happen?
Answer: Temby believes the Deseret News can be published in the morning by June of next year.
Question:How will the publication of two morning newspapers work?
Answer: Sometime late in 2004 the NAC will move to a new production facility; until then both papers will be "put out of the Regent Street plant" downtown, Temby says.
"There's no problem with printing the papers, but the distribution is challenging," he added. "We are working out some . . . logistics that will be a temporary process leading up to when the new facility is opened."
Moving the Deseret News to morning will even help the Tribune, according to MediaNews' Singleton. The change would "increase NAC revenues, facilitate better penetration in the market for both newspapers and . . . allow the NAC to use its presses for profitable printing in the afternoon," he said in a court affidavit last year.
Question:Why does the Deseret News get a say over who owns the Tribune?
Answer: An "anti-alienation" provision in the joint operating agreement between the two newspapers provides that no party may transfer their stock in the Newspaper Agency Corp. without the consent of the other party. The provision was included in the 1952 JOA and reaffirmed in the 1982 agreement.
The 1997 option agreement that allows Salt Lake Tribune Publishing Co. to purchase the Tribune after July 31 provides that the sale include "all, and not less than all," of Kearns-Tribune assets. In May, U.S. District Judge Ted Stewart ruled that NAC stock is a Kearns-Tribune asset and any sale of the Salt Lake Tribune could not go through without the consent of the Deseret News.
In his ruling, Stewart determined that "Kearns-Tribune and Deseret News Publishing are sophisticated business organizations that twice negotiated and agreed to the anti-alienation provision." The clause is not ambiguous, he ruled, and completely enforceable.
If the roles were reversed, any potential purchaser of the Deseret News NAC stock would also have to secure the consent of Tribune owners.
Question:Does the Deseret News have any say over the Tribune staff and reporting?
Answer: No. The offices for the employees involved in the reportorial and opinion content of the newspapers — reporters, editors, photographers, page designers, etc. — are in different buildings. There is absolutely no cooperation between the Tribune and the Deseret News on story selection, editing, hiring or firing.
Question:Why didn't the Deseret News object to the 1997 TCI merger?
Answer: The Deseret News did not become aware of the TCI merger until after the deal was finalized. Additionally, it wasn't until 1998 that the News received copies of the option and management agreements.
Snarr voiced his objections in an April 9, 1998, letter to TCI President Leo Hindery Jr.
Snarr wrote that Kearns-Tribune, by way of TCI, could not under the JOA sell any of its NAC shares or stock, delegate a third party to participate in NAC management or sell its assets, which are jointly held by the Tribune and Deseret News.
"Any purported agreements to the contrary are and will be deemed by DNPC (Deseret News Publishing Co.) to be invalid and unenforceable because DNPC has not given any such consents nor waived any of its rights under the JOA," Snarr wrote.
Prior to purchasing the Tribune from AT&T, MediaNews sought and received the consent of the Deseret News.
Question:Do concerns about out-of-state ownership of the Tribune have any merit?
Answer: The Salt Lake Tribune has had several out-of-state owners over the years.
Even Sen. Kearns, who secretly bought the paper in 1901 and turned it toward his own political purposes, was not a native Utahn. He was an itinerant miner who struck it rich in the Park City silver mines and then decided to stay.
Newspapering has been a wild and woolly business endeavor in Salt Lake City, a place where no fewer than eight major dailies have graced city streets at one time or another. Some were locally owned, others were not.
The voice of the Tribune evolved over the course of the past century under various publishers and editors. MediaNews, owner of the Tribune for the past 16 months but not the paper's manager, is a respected force in modern American journalism, and the Salt Lake paper's independence is not expected to be compromised under its direction.
Question:When will this all be over?
Answer: It is hard to determine when any lawsuit will be resolved, since there is always the option to appeal any past or future rulings.
But there are some pivotal dates in this case that may shed some light on the situation.
Obviously, July 31 is key because that is when the management agreement allowing Salt Lake Tribune Publishing Co. to run the day-to-day operations of the Tribune expires.
MediaNews President Dean Singleton has said, "We expect to take management at the end of the day on the 31st." However, Tribune managers have asked U.S. District Judge Ted Stewart to allow them to continue managing the Tribune pending their appeal to the 10th Circuit Court of Appeals. Stewart will hear arguments on that motion on July 17.
Also, a jury trial is scheduled to begin Sept. 9. The trial will tackle remaining issues in the case, such as MediaNews and Deseret News claims that Tribune managers have mismanaged the NAC and the Tribune's claims that the Deseret News and MediaNews conspired to deprive them of their rights under the option and management agreements. Each party will ask jurors to award money damages for the claims.
Following the jury trial, it could take some time for the case to be fully resolved. Appeals to the 10th Circuit often take months, even years. And there is always the chance that the federal appellate court could send the case back to Utah's federal court for more hearings.
Question:In the end, how will this "newspaper war" affect Tribune and Deseret News readers?
Answer: Except for unfortunate confusion, very little is going to change for readers, no matter what the outcome of the litigation may be.
The Deseret News will move to morning publication next year, regardless of what happens in court.
If the lawsuits result in a more equitable balance of power between the two newspapers in the NAC, then the Deseret News will do away with early-publication editions distributed to some parts of the state and expand its reach outside of its core circulation area along the central Wasatch Front.
And the Tribune will undoubtedly maintain its strong voice in community affairs and coverage.
As Deseret News editor John Hughes says: "This community is well served by two fiercely competitive newspapers, independent of each other."
Sale of the Salt Lake Tribune - Read Deseret News' archive stories and see related links about the sale of the Tribune.
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