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Judge Hears Salt Lake Tribune Case

July 17, 2002

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SALT LAKE CITY (AP) _ The Salt Lake Tribune’s managers asked a federal judge on Wednesday to let them keep running the paper while they continue their legal fight to repurchase it.

U.S. District Court Judge Ted Stewart said he would rule quickly on the request for an injunction but didn’t say exactly when.

The agreement keeping the Tribune managers in place expires on July 31 and MediaNews Group Inc., which bought the paper 18 months ago, is preparing to install its own leaders next month.

The attorney for the McCarthey family, which used to own a percentage of the paper, wants to stop that from happening. Gary Bendinger said because the family plans to buy back the newspaper, any changes made by MediaNews managers and president Dean Singleton in the meantime would hurt the publication.

``He (Singleton) has admitted there will be changes and they will be significant,″ he said. ``Any change is harmful.″

Kevin Baine, an attorney for MediaNews, doubts the McCartheys will have the contractual right or the money to repurchase the Tribune.

The Tribune has had three corporate owners during the past five years. Denver-based MediaNews bought the Tribune in January 2001 from AT&T Corp. for $200 million.

At the time of the sale, the Tribune managers thought they were just about ready to close a deal to reclaim ownership of the paper.

The Tribune had been taken over by a cable TV giant it helped establish, Telecommunications Inc. That 1997 deal, a stock swap, allowed Tribune owners to cash out, but it included an option to buy back the newspaper after July 31.

Telecommunications Inc. was sold to AT&T Corp. In turn, AT&T sold the paper to MediaNews.

MediaNews has agreed to make the Deseret News, Salt Lake City’s other daily paper, a more equal partner in the joint newspaper agency long dominated by the bigger Tribune.

MediaNews claims Tribune managers have mismanaged the paper to drive down its market value, lowering the price the McCarthey family would have to spend to get it back.

They also argue that the Tribune managers are using the newspaper to influence a potential jury pool and using its editorials to spread fabrications about MediaNews.

The McCartheys still run the newspaper under a contract tied to the five-year-old option to buy it back.

Singleton said he is ready to be at the Tribune on Aug. 1.

Stewart has ruled that the McCartheys hold a valid option to buy back the Tribune. But Stewart also ruled the Deseret News has a right to block that sale because of the terms of the joint operating agreement, in which the newspapers share printing, advertising and circulation costs. Deseret News officials say they would block a sale.


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