MediaNews seeks dismissal of suit

The Denver owner of the Salt Lake Tribune spelled out legal counterclaims against the newspaper's managers Monday, accusing them of mismanaging the Tribune in order to buy it in 2002 at an "artificially low price" and waging "war" against the Deseret News.

MediaNews Group asked a federal judge to either dismiss the lawsuit the managers filed against them last year or stay the case until a lawsuit filed by the Deseret News in state court is resolved.

AT&T Corporation, which sold the Tribune holding company on Jan. 2, supported MediaNews' request for dismissal in other documents filed Monday.

In April the Deseret News filed a lawsuit in 2nd District Court in Davis County in April, alleging the Tribune has tried to "stifle competition."

MediaNews contends the Tribune managers have attempted to "drive" the Deseret News "into extinction," delaying their preparations to switch from afternoon to morning publication.

Tribune publisher Dominic Welch did not return calls for comment Tuesday.

The managers owned the newspaper before they agreed to a $731 million tax-free stock swap with Tele-Communications Inc. in 1997. AT&T bought the newspaper when it merged with TCI in 1999.

MediaNews contends the management and option agreements were crafted to avoid a "massive tax payment" if the managers repurchased the newspaper.

The Tribune managers believe the agreements give them the right to buy the newspaper from MediaNews next summer. But the Deseret News claims a joint operating agreement it shares with the Tribune gives it the right to veto a future sale of the Tribune.

MediaNews — which technically owns the Tribune's holding company, Kearns-Tribune, LLC — receives 58 percent of the net income attributable to the Deseret News through the Newspaper Agency Corporation, the company that executes the JOA.

"There is no rational basis for Kearns LLC to seek to damage the viability of the Deseret News and every reason to encourage its expansion," MediaNews said.

The company alleges the Tribune managers have put up obstacle after obstacle to the Deseret News' preparation for morning publication.

The Deseret News has proposed purchasing land and constructing a new production facility that would have the capacity to print both newspapers, and (the managers) have made every effort to delay and undermine the ability of the (NAC) to pursue this project," MediaNews said.