SEATTLE Hearst Corp. files lawsuit over possible closing of newspaper

SEATTLE (AP) -- The Hearst Corp. sued The Seattle Times Co. on Monday, hoping to block any attempt by the Times to shut down its cross-town rival, the Hearst-owned Seattle Post-Intelligencer.
In its filing, Hearst and the Post-Intelligencer argued that the Times should not be allowed to dissolve an agreement that combines the two papers' advertising, production and circulation departments.
The Times said over the weekend that it no longer considered the agreement financially viable. Publisher Frank Blethen said his newspaper was prepared to invoke a clause in the agreement that could lead to its termination.
The clause says that if one paper loses money for three consecutive years, it can begin an 18-month negotiating period during which the two sides can try to come to terms on publishing one newspaper. The Times announced in January that it had lost money for three straight years.
But in papers filed with King County Superior Court, Hearst said another clause should prevent the Times from beginning the negotiating period. According to that clause, neither paper can claim losses caused by extraordinary circumstances -- including, Hearst says, such events as the Sept. 11 attacks; the prolonged recession; or the strike at both papers in late 2000 and early 2001.
"We believe that the past three years don't constitute a fair test of this [joint operating agreement's] continued economic viability," said Victor F. Ganzi, Hearst's president and chief executive.