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Posted 24 Feb 2001   For week ended October 13, 2000
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Sent on Mormon-News: 10Oct00

Summarized by Kent Larsen

LDS Church, Deseret News Deny Rumors of Salt Lake Tribune Takeover

SALT LAKE CITY, UTAH -- Salt Lake City TV station KUTV Channel 2 reported last Tuesday on rumors that the LDS Church was seeking to purchase the Salt Lake Tribune or the Newspaper Agency Corporation that controls the business operations of both the Tribune and the Deseret News, in the process unleashing a simmering dispute between the two papers over control of the agency under their 1952 join operating agreement. The dispute also raised fears that the Tribune's independent voice would somehow become controlled or silenced in the process.

The KUTV report on the rumors led to a petition by Tribune reporters asking the paper's management to publicly disclose any negotiations with the Deseret News. The response led to a front page story in the Tribune about negotiations between the Deseret News and AT&T, which owns the Tribune, over control of the Newspaper Agency Corporation.

The source of the dispute is almost as old as the 1952 Joint Operating Agreement that has preserved the status between the two papers. The Kearns family, which had owned the Tribune since it was purchased by Thomas Kearns in 1900, became joint owners of several cable systems in the 1950s and 1960s. These interests eventually became stock in cable giant TCI, which bought-out the family in 1997, in the process also becoming the owner of the Salt Lake Tribune. TCI was then merged into AT&T in April 1999, making it the owner of the Tribune.

But the Kearns family tried to preserve its interests in an independent Tribune through two contracts, one giving management of the paper to the family-controlled Salt Lake Tribune Publishing Company, and the other giving the family an option to purchase the paper again in August 2002.

Meanwhile, the Deseret News began to suffer under the agreement, as national tastes preferred a morning newspaper over an evening paper. Where other afternoon newspapers have shifted circulation from afternoon to morning, the Deseret News hasn't yet done so because the Newspaper Agency Corporation that prints the newspaper for them and for the Tribune doesn't have the printing capacity to print both newspapers in the morning. The Deseret News also claims that the Newspaper Agency Corporation's decisions have been detrimental, one source telling Mormon News that the NAC's policies limited the News' circulation outside of Salt Lake City.

After TCI became owner of the Tribune, the Deseret News tried to negotiate with TCI to purchase a majority interest in the NAC, eventually reaching an oral agreement for the sale. However, TCI was acquired by AT&T in April 1999, before a deal could be reached.

But apparently negotiations didn't stop then, and a Deseret News consultant, Gary Gomm, asked US Senator Orrin Hatch to call AT&T to assure them that he had no trouble with the Deseret News acquiring a controlling interest in the Newspaper Agency Corporation. Hatch's opinion is important because he heads the US Senate Judiciary Committee, which oversee's anti-trust legislation. Any agreement by the Deseret News or the LDS Church to purchase the Tribune or the Newspaper Agency Corporation could need to pass anti-trust muster.

Hatch, an LDS Church member, says he now regrets making the phone call to AT&T for the Deseret News. He says he didn't realize that a merger would give the Deseret News' parent, Deseret Management, control of 2/3rds of Utah's newspaper circulation as well as the state's largest TV and radio stations. "Now, I didn't understand that and probably should not have gotten involved. Let me tell you what happened. Some people came to me and said: 'Since AT&T doesn't understand the newspaper business, would you tell them you have no objection to the Deseret News doing this.' In this case, I probably shouldn't have done it."

The Deseret News' Chairman and Publisher, L. Glenn Snarr, told the Salt Lake Tribune on Wednesday that the Deseret News had no comment on the rumors. He did say, however, "We have made no bid and we have not solicited that property," referring to the Salt Lake Tribune itself. But he did concede, "We've discussed with AT&T a number of subjects related to our interest in NAC, and I don't want to go beyond that. The Deseret News favors having two newspapers under separate ownership serving the community. We have no desire to change that situation."

Following the Salt Lake Tribune's article on the rumors and dispute on Thursday, other news organizations have picked up the story. Both the Wall Street Journal and the New York Times ran stories on the dispute, with the Wall Street Journal giving a history of the dispute and claiming that the Tribune's relationship with the LDS Church had deteriorated in recent years, due to its coverage of subjects like polygamy and the Mountain Meadows Massacre, which the Church would rather not have discussed.

The Church-owned Deseret News responded to the story by denying any attempt to "edit, own or control the voice and content of the Salt Lake Tribune." It followed up that denial on Friday with an article admitting that it had discussed the Joint Operating Agreement and NAC with AT&T and with TCI, claiming that it only wanted to get a "level playing field," allowing the Deseret News to increase its circulation.

But in the end, the news stories haven't resolved the dispute over the control of the NAC and the Deseret News' attempts to increase circulation. Both sides say that they are continuing negotiations over the NAC and the News' desire to move to morning circulation, with Dominic Welch, Publisher of the Tribune and President of the Newspaper Agency Corporation claiming that the Deseret News hasn't yet made a formal proposal to increase circulation to the NAC board. But a Saturday Salt Lake Tribune article says a NAC committee is looking at the costs involved with such a change, eventually estimated at $15 to $18 million. However, it is still not clear who would pay this cost.


LDS Church, Deseret News Deny Rumors of Salt Lake Tribune Takeover
Wall Street Journal 6Oct00 B4
Peter Waldman: Wall Street Journal 6Oct00 B4

Tribune-Deseret News Fight Generates Sonic Booms, Party-Line Reports
Salt Lake Tribune 7Oct00 B4
By Martin Renzhofer: Salt Lake Tribune Columnist

News has no intent to buy Tribune
Deseret News 5Oct00 B3

Tribune Seeks To Keep Paper From D-News
Salt Lake Tribune 5Oct00 B4
By Sheila R. McCann: Salt Lake Tribune

Deseret News seeks 'level playing field'
Deseret News 6Oct00 B3
By Max Knudson: Deseret News business editor

Salt Lake Paper Wants To Buy Itself
Excite News (AP) 5Oct00 B4
By Hannah Wolfson: AP Business Writer

Tribune's Fate Still Unknow
Salt Lake Tribune (Wall Street Journal) 7Oct00 B4
By Peter Waldman: Wall Street Journal
AT&T mum on rumors of talks with D-News

News Admits It Negotiated With AT&T, LDS
Salt Lake Tribune 7Oct00 B4
By Sheila R. McCann: Salt Lake Tribune
Church only wanted a 'level playing field,' says paper's chairman


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