BY TUX TURKEL

Portland Press Herald

The pending sale of MaineToday Media, Inc., the state's largest media company, won't be affected by the potential closure of the Seattle Post-Intelligencer, which has a business relationship with Blethen's parent company, The Seattle Times, company officials said Monday.

Hearst Corp. announced Friday that it will discontinue the print version of the Post-Intelligencer in 60 days if it can't find a buyer. That news led to questions about the impact of that action in Maine because The Seattle Times handles printing, circulation and other business functions for its smaller competitor under a 26-year-old operating agreement.

The Times recently lost a legal fight to end the arrangement, which it says contributes to ongoing financial losses.

Neither the Times nor the Post-Intelligencer has been profitable since 2000, the Times has reported. Hearst said it might consider continuing the Post-Intelligencer as an Internet-only operation, with a greatly reduced staff.

As economic conditions worsened last year, the Times put the Portland Press Herald/Maine Sunday Telegram and Blethen's other Maine holdings up for sale to raise cash and pay down loans. But no matter what happens to the Post-Intelligencer, the Times will still need to pay down debt, according to Rob Bickler, president and chief executive officer of MaineToday Media, Inc..

"It certainly doesn't lessen our issues around debt covenants in Seattle," Bickler said Monday.

Blethen's holdings in Maine also include the Kennebec Journal in Augusta and the Morning Sentinel in Waterville, as well as the Maine Today division, which produces several Web sites and print publications that include The Coastal Journal in Bath and The Maine Switch. A statement released Sunday by Seattle Times publisher and chief executive officer Frank Blethen noted that the closure of the Post-Intelligencer and end of the joint operating agreement, "will enhance the chances that The Seattle Times can survive the recession, even though our continued operation will require additional sacrifices by its employees and owners."

No discussions, however, have taken place to alter the purchase-and-sale agreement with Maine Media Investment LLC, Jill Mackie, a spokesman for Blethen said on Monday.

"We don't anticipate there being a change," she said.

Blethen is continuing to work with Maine Media Investment to buy the Maine properties. Blethen had hoped to close the deal by the end of 2008. But Maine Media Investment said it was continuing to have trouble completing financing arrangements, and the parties have since extended their sales agreement into the new year.

Reached Monday, Maine Media's lead partner, Richard Connor, said he was continuing to talk this week with banks and investors. The only impact of the Post-Intelligencer story, he said, is to paint a bleak picture of the newspaper industry's future. That news doesn't help his pitch to investors, Connor said, even though the details of the situations in Portland and Seattle are quite different.

"We're still optimistic the deal is going to get done, and we're going to be the owner," he said. "It's just a very tricky time to be borrowing money, especially for a newspaper."

Maine Media Investment is headed by Connor, editor and publisher of the Times Leader newspaper in Wilkes-Barre, Pa. His partners include former Defense Secretary William Cohen; Robert Baldacci, a real estate developer and brother of Gov. John Baldacci; and Michael Liberty, a former Portland developer.