Back in May, McClatchy issued an SEC filing in which it had written down its 49% ownership stake in the Seattle Times from $102 million in 2006 to just $12 million, a drop of nearly 90%. McClatchy acquired the minority stake in its purchase of Knight Ridder and the Blethen family owns the remaining 51% stake. Seattle’s other major daily, the Seattle Post-Intelligencer, is owned by Hearst, and the two papers operate under a joint operating agreement (JOA), albeit with a lot of bad blood and squabbling. McClatchy has also announced that it is very interested in selling its stake in the Seattle Times, even at the current, ridiculously depressed price.
The situation in Seattle is not only indicative of what is happening to daily newspapers around the country, but it’s also particularly relevant to the Twin Cities, which by all accounts is too small a media market to support two daily newspapers, especially in the current environment. The bickering, lawsuits, and troubles surrounding the Hearst/McClatchy relationship in Seattle raises substantial questions about the likelihood of Avista and MediaNews ever reaching an agreement about establishing a JOA or even combining the two dailies in Minneapolis and St. Paul. I cannot imagine that discussions between the two companies are not taking place, but the longer they wait, the more likely it is that the already depressed valuations of both papers are going to be further annihilated. At a valuation of $25 million like the Seattle Times, it hardly becomes worth the effort to try to salvage anything from the business.