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Deadline Passes Without a Deal for Tribune Ownership

Deadline Passes Without a Deal for Tribune Ownership

Posted - Oct. 10, 2003 at 10:26 p.m.



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SALT LAKE CITY (AP) -- Former owners of The Salt Lake Tribune skipped a deadline Friday in their attempt to buy back the newspaper, insisting they will ask an appeals court to scale down the daily's disputed appraisal.

A judge had given Salt Lake Tribune Publishing Co. until 8 p.m. MDT Friday to hand over $355.5 million to MediaNews Group Inc. in exchange for the Tribune, Utah's largest daily newspaper.

No attempt was made to pay the newspaper's asking price by the time the deadline passed.

"It's over," Tribune publisher Dean Singleton said. "The day we have been waiting for has arrived."

U.S. District Court Judge Ted Stewart ordered Tribune Publishing -- the ousted management group led by Salt Lake City's wealthy McCarthey family -- to pay the money by Friday night or lose its option to regain the newspaper that it sold in 1997.

But a letter delivered to MediaNews lawyers late Thursday signaled the family had no plans to buy the newspaper for the appraisal price, which it claims was reached artificially to put the Tribune out of reach. The letter said an appeal of the appraisal to the 10th U.S. Circuit Court of Appeals is imminent.

"Tribune Publishing believes it will be able to show entitlement to a new appraisal," attorney Glynn Key says in the letter.

A Salt Lake City-based attorney for Tribune Publishing did not return calls seeking comment Friday. Tribune Publishing chairman Phil McCarthey also did not return calls, and his sister, Sarah McCarthey, an education professor at the University of Illinois at Urbana-Champagne, said the family would have no comment.

The McCartheys claim the Tribune's appraised value of $355.5 million is $100 million or more too high and that the valuation process was fraudulent.

The appraisal issue is key, given doubts raised by many that the McCartheys don't have the money to buy the Tribune at the appraisal price. The family has claimed MediaNews hasn't given a complete listing of the newspaper's assets -- a list that's crucial for lenders considering whether to commit the millions in financing the McCartheys may need to buy the paper.

Should Tribune Publishing manage to get the appraisal overturned -- a long shot, legal experts say, given that the latest appraisal was performed on terms agreed to by the family -- Stewart's Friday sale deadline would become moot and a new date would be set.

MediaNews is led by Singleton and operates 47 daily newspapers in the U.S. The Tribune's joint operating agreement partner and rival, Deseret Morning News, is owned by The Church of Jesus Christ of Latter-day Saints.

The McCarthey family contends it has a contractual option to buy back the Tribune five years after selling it in 1997 to John Malone's cable-television giant, Telecommunications Inc.

Family members say that when AT&T acquired TCI in 1999, it promised to honor the option, but AT&T instead sold it to MediaNews for $200 million in January 2001.

MediaNews and AT&T said the Deseret News Publishing Co. vetoed the family's purchase under its rights as a partner in the joint operating agreement.

Under that agreement, the Morning News and Tribune are partners in the Newspaper Agency Corp., which prints, distributes and sells advertising for both papers. The Tribune's circulation is nearly twice that of the Morning News, and the Tribune generates nearly 70 percent of NAC profits that are shared by the two papers.

(Copyright 2003 by The Associated Press. All Rights Reserved.)

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