Case 2:14-cv-00445-CW Document 20 Filed 06/30/14 Page 1 of 5 RAYMOND J. ETCHEVERRY (1010) DAVID M. BENNION (5664) PARSONS BEHLE & LATIMER Attorneys for Defendant Desel'et News Publishing Company One Utah Center 201 South Main Street, Suite 1800 Salt Lake City, UT 84111 Telephone: (801) 532-1234 Facsimile: (801) 536-6111 ecf@parsonsbehle.com IN TIlE UNITED STATES DISTRICT COURT DISTRICT OF UTAH, CENTRAL DIVISION UTAH NEWSPAPER PROJECT, dba CITIZENS FOR TWO VOICES, Plaintiff, DECLARATION OF CLARK GILBERT IN OI>}>OSITION TO PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION vs. DESERET NEWS PUBLISHING COMPANY and KEARNS-TRIBUNE, LLC, Defendants. Case No. 2: 14-CV-00445-CW Judge Clark Waddoups I, Clark Gilbert, hereby swear unclei' the penalties of peljury that the following assertions are true: 1. I am over the age of eighteen (18) years and have personal knowledge of the statements of this Declaration. If called as a witness, I could competently testify to the facts set forth in this Declaration. 4833-6423-8619.1
Case 2:14-cv-00445-CW Document 20 Filed 06/30/14 Page 2 of 5 2. I am the CEO of Deseret News Publishing Company ("Deseret News Publishing") and Deseret Digital Media. The daily newspaper Desel'et News, published by Desetet News Publishing, is a voice for faith and family and is one of the faster growing newspapers in the country. Deseret Digital Media, Inc. ("DDM") manages websites (including Desel'et News' website, deseretnews.com), social channels, and mobile applications that reach over 50 million people monthly. 3. I previously served as an associate academic vice president at Brigham Young University-Idaho, where I oversaw the university's online learning and distance education initiatives. I was also a professor of entrepreneurial management at the Harvard Business School and I have a background in media innovation. I have written articles on innovation in the Harvard Business Review and MIT/Sloan Management Review. I also authored the book "From Resource Allocation to Strategy," published by Oxford University Press. I graduated from Brigham Young University. I earned a master's degree from Stanford University and a doctoral degree from the Harvard Business School. 4. In late 2012, representatives of the owner of The Salt Lake Tribune approached reprcscntatives of Deseret News Publishing to discuss possible amendments to the Joint Operating Agreement (".loa"). The JOA had been executed in 1952 by the then-owners of the Deseret News and The SaIl Lake Tribune. Prior to 2013, the JOA had been amended several times. 4833 6423 8619.1 2
Case 2:14-cv-00445-CW Document 20 Filed 06/30/14 Page 3 of 5 5. Deseret News Publishing ultimately reached an agreement with the owner of The Salt Lake Tribune, and, on October 18, 2013, executed the 2013 Amendment and Restatement of Agreement (the "2013 Amendment"), which amends the JOA. 6. In evaluating, negotiating and ultimately executing the 2013 Amendment, it was never Deseret News Publishing's intention or design to enter into a transaction that would cause The Salt Lake Tribune to cease publication or cease to exist. To the contrary, throughout all of the discussions regarding the proposed amendments, the representatives of The Salt Lake Tribune consistently told Desel'et News Publishing that the proposed amendment would benefit The Salt Lake Tribune and its owner. Deseret News Publishing believes that the Salt Lake City community is benet1tted by the presence of diverse editorial voices, including The Sall Lake Tribune. 7. For its part, Desel'et News Publishing entered into the 2013 Amendment because it was a prudent transaction that furthered Deseret News Publishing's legitimate business interests. Through the 2013 Amendment, Deseret News Publishing shored up pension obligations, was able to make a sound investment in its national publication enterprise, and enhanced its ability to manage the advertising and distribution of the Deseret News. The 2013 Amendment fits Deseret News Publishing's interest in pursuing a dual transformation strategy that includes migrating to digital media while simultaneously maintaining and expanding its traditional print capabilities, including a national edition of the Deseret News, 8. The owner of The Salt Lake Tribune received substantial protections and benet1ts as a result of the 2013 Amendment. The owner of The Salt Lake Tribune requested and Deseret 4833-6423-8619,1 3
Case 2:14-cv-00445-CW Document 20 Filed 06/30/14 Page 4 of 5 News Publishing agreed to numerous and significant protections and rights tor the owner of The Sail Lake Tribllne that were new to the.loa-protections and rights that were 110t extended to Deseret News Publishing during the sixty-one years it helel a minority interest in Newspaper Agency Company, LLC (and its predecessors Newspaper Agency Corporation and NAC, Inc.) ("NAC"). These protections and benefits also include, among many others, free access and use for The Salt Lake Tribllne of the printing plant-including future access should the JOA terminate by its own terms in 2020; receipt of full ownership of The Salt Lake Tribune digital operations; and the right to prevent a signitlcant number of potential fundamental changes without the consent of The Salt Lake Tribllne's representatives on the Management Committee of NAC, such as changes to page budgets, publication frequency and circulation promotion. Since the 2013 Amendment became effective on October 18, 2013, Deseret News Publishing and the owner of The Salt Lake Tribllne have implemented its terms. As a result, substantial moneys have changed hands and been expended, title to multiple assets has been transferred, business operations have been altered, and secondary and tertiary business arrangements have been entered into based upon the effect and operation of the 2013 Amendments. 9. Contrary to the relief Plaintiff has requested through its Complaint and Motion for Preliminary Injunction, it is neither commercially practicable nor reasonably possible to put the parties back into the same positions they were in prior to their execution of the 2013 Amendment. That transaction preserves both newspapers, and was entered into in good faith and at arm's length. It should not be undone at the instance of outside third parties, regardless of 4833-6423-8619.1 4
Case 2:14-cv-00445-CW Document 20 Filed 06/30/14 Page 5 of 5 their motive or intention, who do not understand the financial and managerial challenges of print and digital publishing in today's Salt Lake City environment. DATED this?:i:2.. day of June, 2014. 4833-6'123-8619.1 5