by James W. Ure
John Paton was head of Digital First Media (formerly Singleton's Media One) under Alden Global. Paton and Gilbert were acquaintances, and both had gone to Harvard. According to talk, they didn't much like each other, but they were useful to one another.25
Recalled the highly placed former church executive, “Digital First Media [Paton] had come to Clark Gilbert and implied they could sustain the Tribune on 30 percent of the profits if Gilbert paid them enough.”26 Apparently, $23 million was enough.
What was happening at the highest levels of the LDS Church at this time?
Gilbert sold Keith McMullin on the idea [McMullin was CEO of the church's business arm, Deseret Management Corporation]. McMullin had been a long-time member of the Presiding Bishopric, which is the executive management committee for Deseret Management Corporation. The others sitting on the Deseret Management Corporation board included the three members of the First Presidency, the Presiding Bishopric, three rotating members from the Quorum of Twelve [Apostles], and someone from the law firm of Kirton and McConkie.
This group meets twice a week. They were told by McMullin the plan was in place to sell off Tribune assets and cut the percentage of the JOA. McMullin persuaded them to proceed. The First Presidency could have said no to it. They did not.
Once it became public, it was definitely a concern for the church. I do think Clark Gilbert put more trust in Paton than was warranted.
Do I think it was a great idea? From the Deseret News's perspective, absolutely, the sale of the Tribune's plant and equipment sustained the News for several more years. However, it was painful for the community. The Tribune had “doubled down” as a watchdog of the church, and they alienated a portion of the market where they could grow. They'd been poking the church in the eye for a while.27
The “Note” was possibly scrawled by former Tribune owner Dean Singleton, who was in a position to know what was happening. He was also angry with the Mormon Church, which had rebuffed combined offers by Singleton and Jon Huntsman Sr. to buy the Tribune in 2011–2012.28 It is more likely to have come from an anonymous source inside the church-run JOA.29
The secret act by the church described in the “Note” touched a raw nerve in the community—among active, inactive, and non-Mormons (60.7 percent of Utahns are counted as members of the Church of Jesus Christ of Latter-day Saints, although only 41.6 percent of them are active members. Mormons now make up an estimated 34 percent to 41 percent of Salt Lake City, while rural areas of Utah tend to be overwhelmingly Mormon. Utah has a total population of about three million).30
One of those most alarmed by the crippling of the Tribune was Joan O'Brien. Her father, Jerry, had been its publisher from 1983 to 1994. She'd worked in the newsroom as a reporter and editor. When she left the Salt Lake Tribune it was to take a law degree, marry Tribune reporter Tom Harvey, and have a daughter.
O'Brien has a law degree but does not practice law. She quickly realized that Gilbert's new JOA had sent the Tribune on its death march.
“Gilbert and Paton had created a flaming mess,” said O'Brien. “I was really angry.”31 Harvey encouraged her to act, and for several days they mulled the options. The upshot was that O'Brien, who considers herself shy, stepped into the public arena and formed a citizen's group called the Utah Newspaper Project/Citizens for Two Voices. A group of about seventy supporters joined O'Brien (thirty of them former Tribune reporters, and a board was formed, consisting of O'Brien; Harry Fuller, former editorial editor of the Tribune; Janet Goldstein, a lawyer; Edward “Ted” McDonough, a grandson of John W. Gallivan; and Patty Henetz, the reporter who had worked for the Associated Press, the Deseret News, and the Salt Lake Tribune.32
O'Brien wrote a petition letter on October 28, 2013, to the US Department of Justice. It contained thirty signatures of former staff members and Tribune readers, as well as citizens. It called for antitrust action against the Alden, Digital First/MediaNews Group, and the LDS Church's Deseret News. Its first paragraph laid out the case:
As former employees and current readers of the Salt Lake Tribune, we respectfully request an investigation into the 2013 amendments to the Joint Operating Agreement between MediaNews Group, Inc. and Deseret News Publishing Co. The changes threaten to undermine an important journalistic voice in Utah's unique marketplace of ideas, represent an intolerable consolidation of news media ownership here, and violate the spirit and letter of the Newspaper Preservation Act.33
One church insider at the time said, “If Citizens for Two Voices think the US Department of Justice is going to step in and oppose the LDS Church, they are kidding themselves.”34
O'Brien began combing the files from the suit that resulted from the old sale of the Tribune by the McCartheys. She was helped by Henetz, who had done a lot of reporting on the church. “It was clear the Deseret News and the church had been messing with the Trib for years.” Henetz was indignant that a “very insecure” LDS Church was using its power and position to kill the Tribune.35
“I don't think the Tribune staff was initially cognizant of the fact that they had a situation on their hands that threatened the paper's existence,” O'Brien explained. “We had an existential question as well as a freedom of the press question.”36
Jay Shelledy, by now professional in residence, and Fred Jones Greer Jr., endowed chair at Louisiana State University's Manship School of Mass Communication, was in Salt Lake City frequently during the years since he had left the Tribune. He had helped Jon Huntsman Sr. write his biography, Barefoot to Billionaire, as well as a second book, Winners Never Cheat. During this time he was also consulting with a frustrated Huntsman, who made repeated attempts to buy the paper beginning in about 2011 but was angry because the church refused to negotiate.37
Shelledy watched the unfolding drama of the renewed battle between Tribune allies and the church. Said Shelledy, “Joanie's group petrified the church. They had real leverage, and they put the fear of God into the church that the Department of Justice would get involved.”38
The church's fears were well founded. O'Brien in fact hoped to depose the First Presidency of the Mormon Church, the pinnacle of its leadership.39
On November 13, 2013, the Justice Department responded that they would consider the complaint as they reviewed changes to the JOA of the Tribune and the News. In February 2014, determined to add more pressure after reading the non-redacted files of the old case, O'Brien prepared another petition for the US Department of Justice. This time it ran fourteen pages.40
O'Brien scraped together enough money to hire legal counsel. After vetting several firms, she selected high-profile Utah lawyer Karra Porter, a former working journalist from Kansas. Porter had been president or general manager of the law firm of Christensen and Jensen for nineteen years. She and a colleague, David Richards, who would work the case. Porter had also represented the LDS Church in past litigation.41 Said Porter,
I talked to Dave Richards and my other partners and asked, “Should we take this on?” It was a high-risk case, especially for a midsize firm like Christensen and Jensen. We had a discussion at the firm. Finally, an active Mormon partner said, “It's your responsibility to the community. Salt Lake needs two voices.”
It was daunting, taking on the limitless resources of the LDS Church. Meanwhile, a number of prominent members of the community, including highly placed active Mormons, encouraged us to become involved.
We had active Mormons remind us that Salt Lake was unlike any other two-newspaper cities in the US. We are unique here. If the Tribune went under, things would boil over in the valley.42
Porter took on the case with her associate, Richards, and quickly suggested that O'Brien's group use the “Citizens for Two Voices” tagline as part of their Utah Newspaper Project name. “It really described more of what we were about,” said Porter.43
O'Brien was reluctant to tap friends and acquaintances for financial aid, and she invested heavily in the legal case using personal money. Said one friend of Utah Newspaper Project/Citi
zens for Two Voices, “You almost had to force donations on her.”44
One Democratic Utah legislator, Senator Jim Dabakis, jumped into the fray and generated a petition that garnered seventeen thousand signatures.45 It went to the Department of Justice. Pressure on the church was mounting.
By spring of 2014, many Salt Lakers had heard of the “Note.” But even after nearly eight months the LDS Church seemed to pretend nothing was going on. Finally, the church could ignore the ruckus no longer. Under pressure, Deseret News president Clark Gilbert issued a statement on April 21, 2014:46
• Gilbert claimed the new agreement would protect the independence of both papers.
• He announced that now the Tribune would pay no rent for use of the printing plant that was purchased by the Deseret News.
• He claimed the revisions to the JOA were initiated by the owners of the Tribune.
• He insisted that news organizations’ future profits were in digital formats.
It sounded as though the Deseret News was dealing with local Tribune representatives. In this release the Church of Jesus Christ of Latter-day Saints was never mentioned. “Tribune Ownership” and “Salt Lake Tribune” would actually be Alden Global Capital/Digital First in faraway New York City. The concept of selling the Tribune's presses and calling it a significant financial advantage seems ironic, especially when they cut the share of income to the bigger and more profitable paper by half.
“Gilbert's statement showed mastery of Mormon flimflam,” said Mickey Gallivan.47
Later, Porter would ask the court to have Gilbert and the church share the financials, “if they thought this was such a good deal for the Trib.” They were never produced.48
Arvid Keeson, commenting on the statement in Utah Stories, said, “Gilbert has made a statement that the Tribune should essentially feel glad that it is printing the paper rent-free.” Meanwhile, the News got 70 percent of the profits.49
Joan O'Brien, responding for the Utah Newspaper Project/Citizens for Two Voices, said on local public radio that the new profit split—combined with the News's veto powers of any potential sale—weakened the prospects of a buyer making an offer for the Tribune. “Completely one-sided, shockingly unfair,” said O'Brien. “I can't imagine why they have so deliberately undercut the Tribune in this way.”50
The church, the JOA management, and the Deseret News clamped a blackout on any interviews that might have provided an additional dimension to the story.51
Calls and email questions were sent to Clark Gilbert, then president of Brigham Young University Idaho in Rexburg. In March 2016, Gilbert responded graciously but did not answer any of the author's questions, which were as follows:
• Have you read Jill Lepore's article regarding the validity of Clayton Christensen's destructive innovation theories? In her New Yorker article of June 23, 2014, titled “The Disruption Machine,” she writes, “Our era has disruption, which, despite its futurism, is atavistic. It's a theory of history founded on a profound anxiety about financial collapse, an apocalyptic fear of global devastation and shaky evidence.” Would you comment on this?
• Were Christensen's theories behind your dealings with Alden Global and Digital First Media when you restructured the JOA to favor the Deseret News? Please explain how this theory applies to a reinvigorated and profitable Tribune?
• When you cut the profit split, you left the Tribune little in the way of resources to make the change for a digital future. If you were publisher of the Tribune, what would you do to create the change necessary for them to become profitable digitally? The Tribune has continually reduced its reportage and features since you restructured the profit split. The staff continues to be reduced.
• Did you answer directly to the First Presidency while heading Deseret News Publishing?
• If you had the restructuring of the 2013 JOA to do over again, would you do it, in light of the public relations impact?52
President Gordon B. Hinckley died in 2008. Thomas Monson, the long-time JOA representative of the church, succeeded Hinckley as leader of the LDS Church.53
The hierarchy of the church seemed above the fray, yet they certainly had to be discussing the uproar. There was some hope that Monson might bring wisdom to what was seemingly becoming a church blunder of considerable proportion. Monson, however, was by 2014 eighty-seven years old and in declining vigor.
The dissident and non-Mormon half of the “Great Divide” seethed with anger and held demonstrations, while the devout leadership seemed to pretend that there were no Goths or Vandals battering at the gate. Adding fuel to the fire were others who spoke against the deal, including several state senators and retired Tribune editor Nancy Conway.54
On June 16, 2014, attorney Porter filed a complaint on behalf of the Utah Newspaper Project/Citizens for Two Voices in the US District Court of Judge Clark Waddoups. The complaint said that the action by the Deseret News and Alden/Digital First Media were illegal in light of the Sherman and Clayton antitrust acts.55
The complaint asked the court to rule that the 2013 JOA be declared an illegal restraint of interstate trade. It claimed that the Deseret News Publishing Company had unlawfully engaged in action to monopolize the Salt Lake City daily newspaper market. Further, it said the revised JOA was illegal, and its effects would lessen competition, or to tend to create a monopoly. The complaint specifically pointed out the “veto clause,” if exercised by the News against a Tribune buyer, would be in violation.56
“It was a flaming antitrust violation,” said Porter.57
“The veto power of the church to exclude any buyer they wished was the single, most egregious part of the case. I had one billionaire who was very interested in buying the Tribune. He was sipping red wine and told me he was sure the church would veto any offer from him,” said Porter.58 Her law firm received offers to purchase the paper from several qualified buyers.
The attorneys for the church quickly filed a complaint asking for dismissal. The next step in the legal process, if the judge decided the case could proceed, was discovery—the revealing of pertinent facts and background. The church did not want this to go any further.59
“The response to our complaint by the church's attorneys was interesting. Virtually all of it was marked ‘attorneys eyes only.’ We couldn't even show the documents to our client,” said Porter.60
Judge Waddoups said he would announce his ruling on whether to dismiss or go ahead to discovery on September 8, 2014. That afternoon the courtroom was packed with Citizens for Two Voices followers, journalists, and church officials.61
The LDS Church, Alden Capital and Digital First, and the Salt Lake Tribune were represented by nine attorneys opposing Citizens for Two Voices.62 Five of them flew in from Washington, DC, and Chicago. For some bystanders, the case seemed odd: supporters of the Tribune suing the Tribune?
Only Porter and her partner, Dave Richards, represented Citizens for Two Voices. They were sitting in the front row. Directly behind them was Justin Dempsey, a trial attorney for the Department of Justice's Anti-Trust Division. Dempsey was the DOJ's specialist in newspaper antitrust. He focused on the case and was following every move.63
“Nobody in the US knows more about newspaper and trust laws than Dempsey,” said Porter.64
Waddoups, peering down at his papers, dismissed the counterclaim of the church and gave the go-ahead for Utah Newspaper Group/Citizens for Two Voices to proceed with discovery. The room hummed. Cell phones lit up.65
To the dismay of the lawyers for the church, O'Brien and her group were punching above their weight.
Waddoups's ruling was what Citizens for Two Voices hoped for. They believed the discovery process would eventually allow them to examine documents ordered sealed by Judge Ted Stewart in the old McCarthey case, documents they believed might show collusion by the church, and would be able to show disregard for Sherman and Clayton antitrust acts. “It was a wonderful moment, but also daunting,” said Joan O'Brien. “Now we'd have to come up with
some real money to enter into discovery.”66
One thing seemed certain: the LDS Church was fighting hard to keep those documents sealed. It didn't like holding a light up to the past.
Porter and O'Brien had every intention of issuing subpoenas to depose the First Presidency of the LDS Church because “it wasn't clear who was making most of the decisions.”67
On September 28, 2014, attorneys for the church filed another suit to stop the proceedings. Meanwhile, Porter was in regular contact with Justin Dempsey at the Department of Justice, sometimes arguing law and frequently getting suggestions.68
Some prospective buyers of the Tribune in 2016, including the McCartheys, expressed concern that even if the LDS Church lifted its veto power, there would be a lot of cash required to revive the newspaper.69
Even so, would the LDS Church let the McCartheys repurchase the paper that had been its nemesis for so many years?
The McCartheys made a lot of money when they made the TCI deal, but feel like they were lied to and manipulated by the LDS Church, and that much of the manipulation went on behind the scenes through the Mormon underground. They have especially harsh words for Judge Ted Stewart. They also resented Jack Gallivan for his handling of the initial sale.70
“I can't cry for the McCartheys,” says one person active in Citizens for Two Voices who requested anonymity. “They made a shitload of money, almost three quarters of a billion dollars, when they sold the paper in 1997.”71
Another project member disagreed: “The McCartheys were betrayed by a partner of sixty years. The LDS Church has never had any ethics or honesty.”72 This party also requested anonymity.
Phil and Tom McCarthey live relatively modestly. While not exactly reclusive, neither are they extravagant. Philip has a penchant for designer clothes. Tom worked his way up the Tribune ladder from police reporter to music critic, then to travel editor, and finally he retired as associate editor under Jay Shelledy. He likes to travel. The McCartheys have restored several historic buildings in Salt Lake City. They are significant donors to Gonzaga University (where the McCartheys went to college), the University of Utah, the YWCA, the Ronald McDonald House, the Volunteers of America, numerous recovery programs treating drug and alcohol, many Catholic charities, and arts groups. They annually sponsor the McCarthey Series for Independent Journalism at Rowland Hall School, which in 2016 brought Tom Brokaw as guest speaker. Most recently the McCarthey Plaza at the new downtown Eccles Theater was a gift of the McCartheys.73