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Investor Group Offers $68 Million for Detroit Free Press

October 30, 1989

WASHINGTON (AP) _ An investor group has offered to buy the Detroit Free Press for $68 million as lawyers prepared for oral arguments in the U.S. Supreme Court in a case involving a joint operating agreement with The Detroit News.

William D. McMaster, head of the Michigan Investor Group, made the bid to buy the Free Press in a letter Sunday to James K. Batten, president of Knight- Ridder Inc. which owns the newspaper.

″The Michigan Investor Group, if successful in purchasing the Free Press, will continue the 158-year-old Detroit Free Press as an ongoing enterprise and will convert the editorial format to a ‘statewide community newspaper,’ ″ McMaster said in a news release.

The owners of the two newspapers, Gannett Co. Inc. and Knight-Ridder, have said the JOA would force the layoffs and a price increase. Knight-Ridder has said it will sell the Free Press or close it if the JOA is denied.

Officials at Knight-Ridder’s Miami headquarters were reviewing McMaster’s letter this morning and could not immediately comment on it, corporation spokeswoman Heidi Etzold said.

Oral arguments were scheduled for today in the JOA case.

″It’s the time when all the elements of the case will converge, all the people involved will be together for the last time,″ said William Schultz, an attorney for JOA opponents.

The Supreme Court justices may vote on the JOA this week, but their decision isn’t likely to be made public until next summer.

Eight of the nine justices will vote. Justice Byron R. White withdrew from the case citing personal reasons. A 4-4 tie would uphold the JOA.

The court may uphold two lower-court approvals of the JOA, reject the merger or instruct Attorney General Richard Thornburgh to reconsider the decision.

Schultz represents Michigan Citizens for an Independent Press, a group of readers, advertisers, weekly newspaper Publisher W. Edward Wendover, former News columnist Matt Beer and state Sen. John Kelly, D-Detroit.

The Detroit Free Press, which declared itself a failing newspaper in May 1986, filed under the Newspaper Preservation Act of 1970 for permission to merge with The Detroit News. A JOA allows newspapers to combine business operations but maintain editorial independence.

McMaster said he hoped to complete the purchase of the Free Press by the end of the year, provided the newspaper supplied the group with statements on its operations and assets.

Opponents say the merger is prompted by greed and would hurt smaller area newspapers. Some question the independence of the two papers under a JOA.

″If this JOA is upheld, we will see the end of competitive journalism in this country by the end of the century,″ said Louis Mleczko, a News reporter and president of Local 22 of The Newspaper Guild.

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