JOA expert quoted in Rocky article defers to law professor

The most obvious way that the Rocky could avoid death would be if a buyer emerged.

But MediaNews hates this idea. In fact, it announced that if the Rocky is sold, MediaNews would exercise its right, as written in the joint operating agreement, to buy the Denver Newspaper Agency, the company jointly owned by E.W. Scripps and MediaNews. If it were not a partner in the DNA, the new buyer of the Rocky would not have access to printing presses and other business services provided by the Denver Newspaper Agency.

This might scare off a buyer, if it’s legal for MediaNews to do it, that is.

In Thursday’s Rocky, Mark Fitzgerald, an editor at Editor and Publisher, was quoted as saying he thought the Justice Department could not force MediaNews to accept the new owner of the Rocky Mountain News as a partner the JOA, because the Justice Department “approved the agreement that allows MediaNews right of first refusal.” Fitzgerald also said he didn’t think the Justice Department had “standing to say that you’ve got to be a partner with somebody you don’t want to.”

I asked JOA legal expert Stephen Barnett via email what he thought of Fitzgerald’s opinion, as you can see below, he did not agree with Fitzgerald. Barnett, who’s written about numerous JOAs, emailed me:

“I think Justice would have ‘standing’ to require sale of a publisher’s interest in the JOA, and Justice pretty much did that in Honolulu. But as a practical matter — and maybe a constitutional one — it does seem wrong to require a publisher to partner with someone against its will. BUT when the partnership is imposed automatically by a right of first refusal, I think that’s a special case; that amounts to giving one paper control of both, and I think enforcing such a right would be invalid under the Newspaper Preservation Act. This question was raised in the Salt Lake City case, and Justice seemed reluctant to enforce a right of first refusal, although the question wasn’t faced.”

I then called Fitzgerald, a highly respected newspaper expert himself who knows how to size up his sources, to find out whom he believes has more knowledge about the legal intricacies of JOAs. Is it Barnett or him?

Fitzgerald said of Barnett, “He’s more of an expert on it than I. There’s no doubt about that.” He added, “He’s certainly more of an expert than I am on these matters.”

So the Rocky’s source, who came down on the side of MediaNews, has deferred to my source.

But it doesn’t mean lawyers will agree on all this, of course. I’m sure MediaNews has a lawyer on the payroll who’s ready to argue that MediaNews can refuse to accept as a JOA partner any new owner of the Rocky, thanks to the MediaNews’ right of first refusal that’s in the JOA.

But I’d like to find a legal expert, if there is one, who will differ with Barnett, who may be the most credible expert on this topic, and say so on the record.

No matter how you look at it, the first phrase that comes to my mind is, see you in court.

Leave a Reply

You must be logged in to post a comment.