Longtime Seattle Times chronicler Bill Richards has the cover story of monthly Seattle Business. In it he reveals some interesting new details behind the turbulent past decade of the newspaper company and has an unflattering assessment of CEO and Publisher Frank Blethen.
In "Blethen's Choice: Decisions made to pull the family together have weakened the Seattle Times," Richards suggests that a deep history of dysfunction among members of the Seattle-area Blethen family, which has controlled the privately held Seattle Times Co. since 1896, shaped the small newspaper chain's character in good and bad ways.
Frank Blethen, Richards reports, saw the company as something of a salve for familial wounds. But while the family's growing emotional attachment to the newspaper company resulted in kinship and good journalism, that passion also led to a number of bad business decisions that hurt the company's chances for survival in the digital age. Says Tony Ridder, the former Knight Ridder CEO whose company owned 49.5 percent of the Seattle Times Co.'s voting stock: "The Seattle Times was a good newspaper. But Frank absolutely did not make good business decisions."
Three decisions in particular cost the company dearly, Richards says:
The 1999 purchase of three daily newspapers in Maine, the family's ancestral home, for $230 million, which Ridder says was far more than they were worth. The Seattle Times Co. is just now poised to sell those papers — the Portland Press Herald and Maine Sunday Telegram, the Kennebec Journal in Augusta, the Morning Sentinel in Waterville — at a deep loss after carrying crushing debt for a decade.
Ridder, who closely monitored the transaction, both as a member of the Times' board and as CEO of Knight Ridder, says that while several other newspaper companies expressed interest in the Maine chain, none but the Times Co. actually made a formal bid. Guy Gannett's investment bankers convinced the other companies to discuss what they might bid, Ridder says, and the bankers relayed the information to Blethen. "The Blethens ended up bidding against themselves," says Ridder.
Refusal in 2000 to negotiate with the Newspaper Guild, which led to a 49-day strike.
A month before the Newspaper Guild struck the Times, Frank Blethen told the company's board he was preparing for a confrontation. "The company will hold to its values and will not capitulate to the unions' demands or rhetoric," Blethen promised the board. (After the strike was settled, Chris Biencourt, the Times' labor relations director, prepared a PowerPoint recap for the Blethen Corp., calling the strike "inevitable.")
The Times kept Blethen's promise and didn't raise its offer. But the showdown cost the Times $19 million in direct strike expenses, company officials later calculated, plus the $13 million in lost ad revenue.
Ridder says that for once he and his contingent on the Times Co. board backed Blethen. The Times Co. CEO, he says, assured the board that the assault on the JOA and P-I was legally sound and that Hearst would capitulate if the three-year-loss clause was triggered. Not only would the P-I be gone, Ridder says Blethen told the board, but also the Times would no longer be obligated to pay Hearst 32 percent of its profit until 2083.
Also, writes Richards, Knight Ridder twice offered to buy out the Blethens but was rebuffed — in 2000 for $750 million and in 2005 for $500 million.
Richards is a veteran journalist who has worked for The Wall Street Journal, The Washington Post, the P-I, and The Seattle Times, where he covered the JOA under unique circmstances. He also wrote for Seattle Weekly and Crosscut when I was editing at those two publications. He quotes me briefly in this article, regarding the strike:
Chuck Taylor, a former Times reporter and one of the strike leaders, says the Times "absolutely" could have avoided the showdown if it had shown a willingness to negotiate. "If this had not been a locally-owned paper, someone from corporate would have done a cold, cost-benefit analysis and concluded it wasn't worth it," says Taylor, who ended up editing the union's strike paper and did not return to his Times job after the strike. "They would have said, 'Let's give them a little and avoid a strike.' But Frank and others didn't want to hear that."
I would like to clarify a couple of points there. First, and this one seems to have dogged me for eight years, I was not a "strike leader." I did organize and lead the Seattle Union Record, the joint Web site and newspaper published by striking workers of the Times and P-I. In fact, I gently butted heads with local and national union leaders on occasion in my role as editor of a paper that covered the strike as news. But I was not involved in strike strategy or organization beyond my role with the Union Record.
Second, I did return to The Seattle Times after the strike — for a month. The atmosphere was nothing short of bizarre, and I couldn't get my head back into the game, so I decided to volunteer to be laid off and find something else.
I have many good friends still working at the Times, and I hope the company can pull through this tough economy and get out from under all that debt and get back to being the seven-time Pulitzer winner I fondly recall working for. (The 1980s and '90s were an exciting time to be there, and almost all of us drank the Blethen Kool-Aid.) But Richards makes a compelling case that Frank Blethen, in 24 years of leadership, has placed the company and its legacy in peril.