Ex-Trib owners must rely on written pacts

Former owners of the Salt Lake Tribune must rely on written contracts rather than an oral agreement in their attempt to regain ownership of the daily newspaper, a federal appeals court ruled Friday.

The 10th U.S. Circuit Court of Appeals found that the terms of the "family agreement" were included in subsequent contracts governing the process through which the McCarthey family, the historical owners of the Tribune, could recover control of the newspaper after a 1997 corporate merger.

The McCartheys' oral contract claims, the ruling states, are "superseded by written contracts to substantially the same effect."

Friday's unanimous decision upholds one made earlier by U.S. District Judge Tena Campbell that, under Utah law, the oral argument cannot be considered a separate contract.

Attorneys for the family argued before the Denver court in May that former Tribune publisher Jack Gallivan promised the McCarthey family in 1995 that he would do everything in his power to ensure the family would remain in control of the paper after its merger with Telecommunications Inc. However, TCI later merged with AT&T, which sold the Tribune to current owner MediaNews in January 2001.

The McCartheys, through the Salt Lake Tribune Publishing Co., remained in editorial control of the paper until July 2002, when a five-year management agreement, inked during the TCI merger, expired. An option agreement gave SLTPC the right to purchase the Tribune upon expiration of the management agreement, but a dispute over the valuation process outlined in the agreement has prevented the family from exercising the option.

Regardless, the 10th Circuit found that each includes all four terms purportedly included in the family agreement and the written contracts therefore supersede any oral agreement.

Additionally, the court noted that the written agreements were not entered into lightly. Each, the ruling states, represents a "finely calibrated, thoroughly lawyered attempt to ensure the McCartheys' uninterrupted control of the Tribune and to regain ownership at the end of five years."

The 10th Circuit also noted that the McCartheys could have further safeguarded their repurchase rights, but they opted instead to maintain the tax-free status of the multimillion-dollar merger.

By voting their shares in favor of the TCI merger, the McCartheys "signaled their satisfaction" with their rights under the two agreements, Friday's ruling states.

Other aspects of the yearslong battle over ownership of the Tribune continue to work their way through Utah's federal court.

Earlier this month, U.S. District Judge Paul Cassell set the stage for a trial to determine the appropriate market value of the newspaper. The family has challenged a valuation process that ultimately set the paper's worth at $355.5 million, a price they believe is at least $150 million too high.

That matter is scheduled for a nine-day trial to begin Sept. 4.

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E-mail: awelling@desnews.com