SALT LAKE CITY – Executives of Salt Lake City’s two daily newspapers say in new court filings that changes to terms of a joint operating agreement between The Salt Lake Tribune and Deseret News aren’t intended to put the Tribune out of business.
The agreement is designed to save the paper, not lead to its demise, John Paton, CEO of Tribune owner Digital First Media, wrote in response to a lawsuit filed last month by a group of former Tribune employees. They argue the deal’s terms violate federal antitrust laws and undermine the newspaper’s role as an independent voice.
“There are no plans to cease publication of the Tribune today, tomorrow, next week, next month, next year or ever,” Paton said in filings Monday.
The U.S. Justice Department is reviewing the changes made in October to the six-decade-old agreement, and the newspapers’ parent companies say they are co-operating with federal officials, though the investigation and lawsuit are delaying talks with possible Tribune buyers.
Deseret News CEO Clark Gilbert said going back to the old terms of the deal would not be “commercially practicable nor reasonably possible.” The new agreement preserves both newspapers and was entered into in good faith, he said.
It shouldn’t be scrapped because of groups “who do not understand the financial and managerial challenges of print and digital publishing in today’s Salt Lake City environment,” Gilbert wrote.
The group bringing the lawsuit, Utah Newspaper Project, argued that the revised agreement gives too much control to the Deseret News, which is owned by a for-profit arm of The Church of Jesus Christ of Latter-day Saints.
Under the new terms, the Deseret News purchased the Tribune’s share of a printing plant and gets 70 per cent of the profits from the newspapers’ joint print advertising and circulation businesses. The old profit split was 58 per cent for the Tribune and 42 per cent for the Deseret News.
The group said the agreement gives the Tribune too little revenue to publish its print edition long term and also jeopardizes its website, which relies on print revenue.
The deal also threatens the newspaper’s independence by giving the Deseret News veto power over any potential purchaser of the Tribune, the group said.
In a joint filing Monday by the newspapers’ parent companies, attorneys say the veto has been in the joint operating agreement since 2001.
The attorneys say the lawsuit and federal inquiry are delaying discussions with possible Tribune buyers, including Jon Huntsman Sr. The industrialist and philanthropist says he’s a “strong member” of the Mormon church but believes it would not be in the best interests of Utah residents if a church-owned newspaper dominated state news.
Paton said dissolving the new terms would be “potentially fatal” to the Tribune, forcing disruptions to a new strategy that has put the emphasis on making profits from digital advertising.