Even if they win the JOA case, if the Blethens suddenly unveil hidden riches, they will only be inviting another legal battle over allegations they misled everyone in the dispute. And if they lose, with no land left to sell to raise money and limited prospects for improving newspaper revenue, their options will be limited.
One of those options — indeed, one of the best — is to sell a newspaper or a group of papers. Frank Blethen has repeatedly said he would not sell the Seattle Times or the Maine newspapers, citing family connections to the two regions.
The family can’t — or won’t — sell the Times, mainly because Hearst has a right-of-first-refusal agreement to buy it if the paper ever goes on the block. Frank in particular has spent years of time and gallons of ink badmouthing big-corporation ownership of media companies. (And in 2001, the family turned down a buyout offer of $750 million from Knight Ridder, including assuming $250 million in company debt. The family must have known it was the best offer they would see for many years to come.)
The Blethens’ reputation in Seattle is in part based in its opposition to companies such as Hearst. The family “literally think that everybody is out to crush them and their legacy of family ownership,” says Elizabethe Brown, administrative officer of the Pacific Northwest Newspaper Guild, which represents employees at both Seattle dailies. To sell their flagship newspaper to the company they have accused for years of being an “absentee owner” would be a dramatic reversal of course
He could sell some of the smaller papers in Washington, but if he’s keeping the Times, it would certainly be useful to have some regional partners with which to share news and advertising.
What’s left are the papers in Maine, to which the family has sentimental (and thin historical) ties. The Blethen family is well ensconced in the Seattle area; it seems unlikely they would all uproot and move east, though one of the rumors in Seattle is that “Maine is the exit strategy,” according to Brown.
The family has been reducing its presence in Maine of late. The only Blethen family member still working in Maine is Robert Blethen Jr., a member of the “fifth generation” who works in circulation at the Press Herald. (There are other members of the family on the board of directors of Blethen Maine Newspapers, but they are required to come to Maine only once a year, for the company’s annual meeting.)
What then?
Though it would be hard to recoup the $200 million purchase price of the Maine papers, some estimates peg the McClatchy stake in the Seattle Times Company at $300 million, and one analyst has estimated McClatchy paid $150 million for that share, based on accepted formulas for calculating the purchase price of a newspaper asset.
If McClatchy sold its 49.5-percent share of the Seattle Times Company to the Blethens in exchange for the family’s Maine dailies, the Blethens would win on two counts. Not only would they have disentangled themselves from the Maine papers’ union fights and uncertain financial futures, but they would also fulfill a longstanding plan regarding the Seattle paper — namely, to be its sole owner. In March, the Press Herald reported, Blethen executive Chuck Cochrane said in a memo to that company’s Maine employees, “The Blethen Family is committed to retaining its majority ownership of the Seattle Times Company . . . and, if the opportunity ever presented itself, to acquire the minority interest.”
But McClatchy, which kept from the Knight Ridder deal papers in markets averaging 11.1 percent growth in number of households, would likely look at Maine’s projected population growth of 0.5 percent through 2020, and refuse a trade, preferring either to sell its share outright, or keep drawing meager dividends (which in 2005 gave Knight Ridder $3.7 million). That would leave the Blethens to find another buyer.
A self-congratulatory editorial on August 13 in the Maine Sunday Telegram paraphrased Frank Blethen as saying his family will not “take part” in the “jostling and realignment” of newspapers that has come after the Knight Ridder sale, suggesting the papers are not for sale.
On the same day (and also inspired by the 110th anniversary of the Seattle Times), Guttman wrote in her column that the family ownership of the Maine papers is the reason “so many of our journalists and employees have chosen to be at the newspaper.” She did not address the ongoing and looming labor disputes, but paraphrased Cochrane telling staffers “there is no corporate office in our company. There are no corporate directives or missives. At our newspaper, Maine people call the shots.” (That, presumably, includes such “Maine people” as Cochrane, who came here from Washington when the Blethens bought the papers, and Guttman, who started her career in California and came to Maine in 1994.)