Salt Lake Tribune Publishing Co. v. AT&T Corporation

Full title: SALT LAKE TRIBUNE PUBLISHING COMPANY, L.L.C., Plaintiff, vs. AT&T…

Court: United States District Court, D. Utah, Central Division

Date published: Feb 21, 2001

Case No. 2:00-CV-936C (D. Utah Feb. 21, 2001)

Opinion

Case No. 2:00-CV-936C.

February 21, 2001.

ORDER

TENA CAMPBELL, U.S. District Judge

This matter comes before the court on Plaintiff Salt Lake Tribune Publishing Company, LLC's ("SLTPC's") motion for preliminary injunctive relief ordering Defendant MediaNews Group, Inc. ("MNG") to set aside amendments made to the 1982 Joint Operating Agreement ("JOA"), a contract which governs the relationship between Salt Lake City's two major newspapers, The Salt Lake Tribune ("The Tribune") and the Deseret News. SLTPC claims that the amendments to the JOA caused the Kearns-Tribune Corporation ("KT") to breach the Management Agreement and the Option Agreement, two agreements between it and SLTPC.

For the reasons set forth below, SLTPC's motion for preliminary injunction is granted in part and denied in part.

Findings of Fact

KT¹ is the owner of The Salt Lake Tribune. On January 2, 2001, after the court had denied SLTPC's motion to enjoin the sale, ATT sold the stock of KT to MNG in exchange for, among other things, $200,000,000. At the present time, then, KT, owner of The Tribune, is an entity owned and controlled by MNG.

1 Throughout this order, except where otherwise necessary, "KT" will refer collectively to Kearns-Tribune Corporation, its successor-in-interest, Kearns-Tribune, LLC, and MediaNews Group, the owner of Kearns-Tribune, LLC.

That same day, MNG and the Deseret News Publishing Company ("DNPC"), publisher of the Deseret News, met and approved several amendments to the JOA (the amended JOA is hereinafter referred to as the "2001 JOA"):

"Two (2) members of the Board of Directors [of the Newspaper Agency Corporation, the body which performs the advertising, distribution, circulation, billing and other functions for The Tribune and the Deseret News under the JOA, (hereinafter "NAC")] shall be the Chairman and the President of DNPC . . . and the other two (2) members shall be the Chairman and the President of [KT] . . ." (2001 JOA § 2.02, attached as Ex. D. to Pl.'s Mem. in Supp. of Mot. for Prelim. Inj.)

"The officers of the NAC shall consist of a President, a Vice-President, a Secretary, and a Treasurer . . . [T]he President of the NAC shall be selected as follows: [KT] shall recommend to the Board, for its approval or rejection, in its absolute discretion, [KT]'s preferred candidate for President of the NAC . . . [If] such candidates are rejected by the Board, [KT] shall thereupon be solely empowered to designate the person who shall then serve as President . . . The President shall report directly to the Board, and upon being selected as President shall recommend to the Board the persons to serve as Vice-President, Secretary, and Treasurer . . ." (Id. § 2.04, ¶ 1.)

"Any person selected to serve as President of the NAC in accordance with the foregoing procedures shall at any time during his or her term as President be subject to removal, with or without cause, upon the affirmative vote of two or more members of the Board of Directors." (Id. § 2.04, ¶ 2.)

"No person appointed as an Officer of the NAC shall have separate connections with or loyalties to Deseret News or The Salt Lake Tribune unless otherwise mutually approved by DNPC and [KT], which approval may be withdrawn at anytime." (Id. § 2.04, ¶ 3.)

"[KT] shall have the right to appoint the Chairman [of the NAC board] during the first four (4) years commencing with the effective date of this Agreement. Thereafter, DNPC shall have the right to appoint the Chairman for the ensuing four (4) years, whereupon the right to appoint the Chairman shall revert to [KT] and shall alternate with DNPC for ensuing four year terms; provided, however, that if William Dean Singleton [CEO of MNG] is initially appointed by [KT] as the Chairman, he personally shall be permitted to serve in such capacity beyond expiration of the four year term so long as he desires and is ready, willing and able so to [sic] serve." (Id. § 2.03, ¶ 2.)

"DNPC shall have the unrestricted discretionary right to withhold its consent if any sale, transfer or conveyance in one or more transactions would result in more than 49% of the ownership of [KT] being held by any entity or entities other than MNG . . ." (Id. § 10; see also id. § 2.01.)

Elimination of the following clause from the 1982 version of the JOA which existed prior to KT's amendments ("1982 JOA"): The Deseret News or The Salt Lake Tribune shall have the option to terminate the JOA due to "changes . . . which render continued operation under [the JOA] uneconomic, including: changes in advertiser or reader patronage; changes in economic availability of materials, supplies, labor, equipment and other properties and things necessary for the efficient publication and distribution by either party of its newspaper as contemplated by [the JOA]; or technological changes." (1982 JOA § 19(6), attached as Ex. C to Pl.'s Mem. in Supp. of Mot. for Prelim. Inj.; compare 2001 JOA § 12.)

On January 3, 2001, Dean Singleton, the CEO of MNG, and Joseph Lodovic, the Vice-President and Chief Financial Officer of MNG, were appointed by KT to the Board of the NAC; Dominic Welch, the Chief Executive Officer of SLTPC, and Randy Frisch, the Chief Operating Officer of SLTPC, were removed from their positions on the NAC Board. KT also removed Welch and Frisch from their positions as President and Treasurer, respectively, of the NAC and nominated officers of KT to fill those roles.

Standards for Injunctive Relief

To obtain injunctive relief, a party must establish that: (1) there is a substantial likelihood that it will succeed on the merits of the litigation; (2) it will suffer irreparable injury unless an injunction is issued; (3) its threatened injury outweighs any harm the proposed injunction may cause to the opposing party; and (4) an injunction, if issued, would not be adverse to the public interest. See Elam Constr., Inc. v. Regional Transp. Dist. 129 F.3d 1343, 1346-47 (10th Cir. 1997), cert. denied, Regional Transp. Dist. v. Elam Constr., Inc., 523 U.S. 1047 (1998).²

2 Interpretation of both the Management and Option Agreements calls for the application of Delaware law. (See Management Agreement § 8.11; Option Agreement § 15, attached as Ex. B to Pl.'s Mem. in Supp. of Mot. for Prelim. Inj.) With respect to preliminary injunction standards, however, the court applies the standards laid out by the Tenth Circuit Court of Appeals. See Sizewise Rentals, Inc. v. Mediq/Prn Life Support Servs., Inc., Civ. No. 00-3051, 2000 WL 797338, at *4 (10th Cir. May 26, 2000); Equifax Servs., Inc. v. Hitz, 905 F.2d 1355, 1361 (10th Cir. 1990).

The Tenth Circuit has adopted a heightened standard when a movant seeks one of the following types of "disfavored" preliminary injunctions: (1) one that disturbs the status quo; (2) one that is mandatory as opposed to prohibitory; or (3) one that affords the movant substantially all the relief he may recover at the conclusion of a full trial on the merits.See SCFC ILC, Inc. v.Visa, USA, Inc., 936 F.2d 1096, 1098-99 (10th Cir. 1991). If the requested relief falls under any one of these disfavored types of preliminary injunctions, "the movant must show that on balance, the four factors [for obtaining injunctive relief] weigh heavily and compellingly in his favor." Id. at 1098. KT contends that the injunction sought by SLTPC falls under all three categories of disfavored injunctions.

The first question is whether the injunction, if issued, would alter the status quo. KT is correct that, at the present time, the JOA has been amended and, as a result of those changes, changes to the NAC Board have been made. The present status of the parties, however, is not always determinative of what the status quo is that should be maintained pending a trial on the merits. In Visa, the Tenth Circuit explained that the status quo was "`the last uncontested status between the parties which preceded the controversy until the outcome of the final hearing."Id. at 1100 n. 8, quoting Stemple v. Board of Ed. of Prince George's County, 623 F.2d 893, 898 (4th Cir. 1980); accord Consarc Corp. v. United States Treasury Dept., Office of Foreign Assets Control, 71 F.3d 909, 912-13 (D.C. Cir. 1995); Washington Capitols Basketball Club, Inc. v. Barry, 419 F.2d 472, 476 (9th Cir. 1969). The last uncontested status existing between the parties was January 2, 2001, before KT and DNPC amended the JOA.³ Accordingly, an injunction that halted implementation of the 2001 amendments to the JOA and required NAC to operate under the 1982 JOA would not alter the status quo, but rather, would preserve the status quo.

3 SLTPC contested KT's right to amend the JOA even before the amendments were made. In its first motion for preliminary injunction, SLTPC argued that the sale of KT to MNG should be enjoined because, among other reasons, once in control of KT, MNG would amend the JOA in violation of SLTPC's rights under the Management and Option Agreements. The court found that SLTPC's arguments were "speculative" but advised the parties that "[i]f, at some point after the sale of [KT], SLTPC believes that MNG has violated the Option or Management Agreements, it may seek to enforce its rights." Salt Lake Tribune Publishing Company v. ATT, Civ. No. 00-936, slip op. at 30 (D.Utah Dec. 15, 2000).

The second inquiry is whether the injunction is mandatory rather than prohibitory.

Mandatory injunctions are more burdensome than prohibitory injunctions because they affirmatively require the nonmovant to act in a particular way, and as a result they place the issuing court in a position where it may have to provide ongoing supervision to assure that the nonmovant is abiding by the injunction.

Visa, 936 F.2d at 1099. Again, looking at the reality of the relationship between the parties, the requested injunction cannot realistically nor fairly be categorized as a mandatory injunction. It appears that the only affirmative action KT would be required to take would be to remove their representatives in NAC, to be replaced with those chosen by SLTPC. And, as previously discussed, any necessity that KT take affirmative action is due to the fact that it amended the 1982 JOA despite the knowledge that SLTPC strenuously objected.

The situation here is far different from that in Visa. In Visa, the dispute between the parties focused on whether the Defendant Visa should be required to approve the Plaintiff Mountain West's order for 1.5 million credit cards. The Tenth Circuit noted that "Visa had steadfastly refused to approve the order authorizing the new cards. Thus, the status quo at the time the district court considered MountainWest's motion was that MountainWest was without the new cards, and Visa was continuing to refuse to approve the order." Id. The court further found that the "preliminary injunction was mandatory in nature in that it required Visa to take the affirmative step of approving issuance of the new cards . . ." Id. at 1099 n. 6. Here, the status quo is the position the parties occupied before the 1982 JOA was amended. Therefore, an injunction would merely prohibit implementation of certain provisions of the 2001 JOA.

The third issue, whether an injunction would award SLTPC substantially all of the relief to which it would be entitled if it prevailed at trial, is less clear. SLTPC asserts that a preliminary injunction would not award it substantially all the relief it might achieve at trial, as its motion for preliminary injunction does not request several forms of relief that it prays for in its Amended Complaint, including: declaratory relief; a permanent injunction ordering acceleration of SLTPC's right to exercise its option; compensatory and punitive damages; and attorneys' fees and costs. At the core of all SLTPC's claims in this lawsuit, however, is its contention that it must be allowed to manage The Tribune until its option ripens. And if SLTPC is granted the requested preliminary injunction, that is essentially the relief it will receive. Thus, while it is arguable that an injunction would not grant SLTPC substantially all of the relief it might receive at trial, such an argument might be defensible only under the form, but not the content, of SLTPC's complaint.

On balance, the court believes that the injunction SLTPC seeks is not one of the disfavored injunctions, and therefore, the heightened standard should not apply. The resolution of this motion is the same, however, regardless of the standard is used. Accordingly, the court will analyze each factor using the heightened standard.

Conclusions of Law

I. Likelihood of Success on the Merits A. Breach of the Management Agreement

In the Management Agreement, signed by the KT and SLTPC in 1997, KT appointed SLTPC to act "as the exclusive management agent to supervise and manage the publication and operation of the Newspapers and to render services related thereto, subject to the direction and authority of KT . . ." (Management Agreement § 3.01(a), attached as Ex. A to Pl.'s Mem. in Supp. of Mot. for Prelim. Inj. (hereinafter "Management Agreement")). Section 3.02 of the Management Agreement places upon SLTPC "the duty . . . to perform, or cause to be performed, such services as are reasonably required for the proper and efficient operation and management of the Newspapers, on behalf of and for the benefit of KT . . ." (Id. § 3.02.) In subsections (i) through (xviii) of section 3.02, specific services to be performed by SLTPC are listed. The listed services that are significant here include:

SLTPC shall:

(i) "determine, establish, and maintain operating policies, standards of operation, quality of publication, and any other matters affecting customer relations and all phases of promotion and publicity";

(ii) "act on behalf of KT with respect to all action required or permitted to be taken by KT under the Joint Operating Agreement";

(iii) "purchase all equipment, supplies, and services required for [The Tribune]" . . .;

(v) "perform . . . all such administrative functions as are necessary for the efficient and continued operation of the business operated by [The Tribune]";

(Id. § 3.02.)

Both parties agree that SLTPC's authority to act under the Management Agreement has limitations and that KT has the right to direct SLTPC in its management of The Tribune. They disagree sharply, however, about the form and extent of KT's direction. According to SLTPC, KT's authority to guide SLTPC's management of The Tribune is "indirect" and is limited to specific provisions of the Management Agreement. (See Pl.'s Mem. in Supp. of Mot. for Prelim. Inj. at 12.) These provisions include sections 3.03, 3.04, and 3.01(b). Section 3.03 lists certain actions which SLTPC may not perform without the consent of the board of KT, such as spend more than $250,000 at one time or "amend, alter or modify the Joint Operating Agreement." (Management Agreement § 3.03.) Section 3.04 requires SLTPC to submit to the "Annual Plan" process, under which SLTPC must submit an annual operating and budgetary plan to the KT board for approval. (See id. § 3.04.) Finally, under section 3.01(b), KT may, under certain limited circumstances, fire the CEO of The Tribune. (See id. § 3.01(b).) Only through these specific enumerated mechanisms, SLTPC contends, can KT oversee SLTPC's management of The Tribune.

KT, on the other hand, insists that it may exercise "direct" control over SLTPC's management, and that this control is not limited to the mechanisms described in sections 3.03, 3.04, and 3.01(b). According to KT, section 3.02 of the Management Agreement sets up a system of "concurrent authority," in which either SLTPC or KT may perform the listed duties.⁴ (See MNG's Mem. in Opp. to Mot. for Prelim. Inj. at 19.) KT contends that the responsibilities delegated to SLTPC under section 3.02 may either be performed by SLTPC, or, if KT so chooses, by KT itself.

4 KT does not dispute SLTPC's sole authority to manage the news and editorial departments of The Tribune, a responsibility which is exclusively delegated to SLTPC under the Management Agreement. (See Management Agreement § 3.02, at 5.)

SLTPC claims that its right to manage the day-to-day affairs of The Tribune necessarily requires that it represent The Tribune on NAC by appointing its own nominees to the positions of President and Treasurer of NAC and to the Board of NAC. In support of this proposition, SLTPC points to separate provisions found in section 3.02 of the Management Agreement. First, section 3.02(i) provides that SLTPC "shall determine, establish, and maintain operating policies, standards of operation, quality of publication, and any other matters affecting customer relations and all phases of promotion and publicity." (Management Agreement § 3.02(i).) In order to perform these delegated management duties, SLTPC asserts, it is crucial for SLTPC to be able to appoint The Tribune's representatives to NAC. This is because the bulk of the operation of The Tribune (as well as of the Deseret News) is performed through NAC:

[NAC] shall, as agent, operate all operating newspaper departments of the parties hereto, excepting only their editorial and news departments; solicit, distribute and promote the business of the papers, and do all billing for advertising, circulation and other charges on behalf of the parties hereto; receive and collect all the receipts and income from the publication of the newspapers of the parties hereto; pay all operating expenses incident to the printing and distribution of said newspapers, excepting the news and editorial departments thereof, and excluding the salaries of the executives of the parties hereto . . ."

(1982 JOA § 7.) SLTPC thus contends that, without the ability to control NAC, it cannot possibly "determine, establish and maintain operating policies, standards of operation, quality of publication, and any other matters affecting customer relations and all phases of promotion and publicity." (Management Agreement § 3.02(i); see also Pl.'s Mem. in Supp. of Mot. for Prelim. Inj. at 7-8 n. 10.) According to SLTPC, therefore, the removal of SLTPC's ability to appoint The Tribune's representatives to NAC is synonymous with the removal of SLTPC's ability to manage the day-to-day affairs of The Tribune.

Second, SLTPC points to section 3.02(ii) of the Management Agreement, which states that SLTPC "shall have the authority to act on behalf of KT with respect to all action required or permitted to be taken by KT under the Joint Operating Agreement." (Management Agreement § 3.02(ii).) The right to appoint the President and the Treasurer of NAC, as well as two of the four members of the NAC board of directors, is one of the actions granted to KT⁵ under the 1982 JOA.⁶ (See 1982 JOA §§ 3, 7.) Because section 3.02(ii) delegates to SLTPC the authority to perform all of KT's actions under the JOA, SLTPC contends that KT delegated to SLTPC the right to appoint KT's representatives to NAC. Prior to MNG's purchase of KT and subsequent amendment of the JOA, SLTPC had exercised this claimed authority by appointing Welch and Frisch to represent The Tribune in the NAC. (See Jan. 21 Decl. of Dominic Welch at 1-2; Jan. 8 Aff. Of Randy Frisch at 1-2.)

5 The 1982 JOA grants these rights to the "Tribune." (1982 JOA §§ 3, 7.) The 1982 JOA makes clear that the term "Tribune," however, refers to KT. (See id. at 1 ("Kearns-Tribune Corporation, a Utah corporation (formerly known as the Salt Lake Tribune Publishing Company, a West Virginia corporation), hereinafter referred to as "Tribune.")).

6 Under the 1982 JOA, DNPC has the right to appoint the Vice-President and the Secretary of NAC, as well as the other two members of the NAC board of directors. (See 1982 JOA §§ 3, 7.)

KT's recent amendments to the JOA have removed SLTPC's ability to appoint The Tribune's representatives to NAC. Under the 2001 JOA, the following procedure is set forth for the appointment of The Tribune's NAC representatives. First, the Chairman and the President of KT fill the two NAC Board appointments. (See 2001 JOA § 2.02.) MNG has filled these two board positions with Dean Singleton — the CEO of MNG and Chairman of KT — and Joseph Lodovic — Vice-President of MNG and President of KT. Second, KT recommends to the NAC Board its choice for NAC President. KT recommended, and the new NAC Board chose, Joseph Zerbey, IV, to fill the role of NAC President. Third, the NAC President recommends to the NAC Board persons to serve as NAC Vice-President, Treasurer, and Secretary. (See id. § 2.04.) Singleton, Lodovic, and Zerbey, all of whom were chosen by KT, have replaced Welch and Frisch asThe Tribune's representatives to NAC.

Furthermore, the 2001 JOA provides that "[n]o person appointed as an Officer of the NAC shall have separate connections with or loyalties toDeseret News or The Salt Lake Tribune unless otherwise mutually approved by DNPC and [KT], which approval may be withdrawn at anytime." (Id. § 2.04.) Under the 2001 JOA, then, neither Welch nor Frisch, nor any other person associated with SLTPC, would be allowed to serve on the NAC unless expressly approved by DNPC.

KT responds by declaring that, although the Management Agreement delegates to SLTPC the ability to appoint NAC representatives, it also reserves for KT the authority to step in and perform this action on its own if MNG sees fit. This view of the scope of SLTPC's authority under the Management Agreement, KT claims, is supported by: (1) the language of the Management Agreement; and (2) general principles of principal/agent relationships.

1. Contract language

KT first asserts that its ability to perform delegated management functions on its own, should it so choose, is expressed in the language of the Management Agreement. For example, KT notes that the provision in the Management Agreement which states that SLTPC is appointed as "the exclusive management agent to supervise and manage" The Tribune also states that this management is to be performed "subject to the direction and authority of KT . . ." (Management Agreement § 3.01(a).) Later, in prefacing the responsibilities delegated to SLTPC under section 3.02, the Management Agreement states that such management services are to be performed "on behalf of and for the benefit of KT . . ." (Id. § 3.02; see also id. § 3.02(ii) (action to be performed "on behalf of KT"; § 3.02(viii) (same).) According to KT, these recurring statements that SLTPC can manage The Tribune only "on behalf of," "for the benefit of," and "subject to the direction and authority of" KT indicate that the Management Agreement also grants KT the concurrent authority to act on behalf of or for the benefit of itself, should it so choose.

In support of this argument, KT contrasts the above qualifications on SLTPC's authority with another provision of the Management Agreement: "[I]t is expressly acknowledged and agreed that the Manager shall have sole authority and discretion with respect to the news and editorial policies established and implemented by the Newspapers." (Id. § 3.02.) The fact that the parties did not choose such forceful language in describing SLTPC's responsibilities under section 3.02 means, according to KT, that they did not intend SLTPC's authority to be exclusive of action by KT. The court finds that this is a reasonable interpretation of this language of the Management Agreement.

But SLTPC gives a different interpretation of these provisions. According to SLTPC, the statements that SLTPC must act "on behalf of," "for the benefit of," and "subject to the direction and authority" of KT simply mean that SLTPC may not take action which is expressly forbidden by section 3.03 of the Management Agreement (such as amend the JOA without the consent of the KT board, see id. § 3.03(vii)), that SLTPC must act pursuant to the Annual Plan process outlined in section 3.04, and that SLTPC's actions must not be to the detriment of KT. Had the parties wished to indicate that KT could step in and perform nearly all management functions on its own, SLTPC argues, they would have instead placed the delegated functions of section 3.02 in section 3.03, so as to make clear that SLTPC could not act without the direct approval of KT. The court finds this, too, to be a reasonable interpretation of the language of the Management Agreement.⁷

7 KT also argues that the meaning of the term "Newspapers," as used in the Management Agreement, supports its view that SLTPC does not have exclusive authority to control the NAC. The Management Agreement states that "KT . . . owns and operates the newspaper and related business set forth on Exhibit A (the `Newspapers')." (Management Agreement at 1.) Exhibit A lists only The Salt Lake Tribune and other smaller, local newspapers formerly owned by KT, and does not include the NAC. (See Ex. A to Management Agreement, attached as Ex. A to Pl.'s Mem. in Supp. of Mot. for Prelim. Inj.) One paragraph later, the Management Agreement states that "KT desires to engage [SLTPC] to manage and operate the Newspapers." Management Agreement at 1. Because the term "Newspapers" does not include NAC, and because KT hired SLTPC only to manage the "Newspapers," KT argues, the Management Agreement must have contemplated that SLTPC would not have authority to manage the NAC.
Section 3.02 of the Management Agreement, however, states that SLTPC shall have the authority "to perform . . . such services as are reasonably required for the proper and efficient operation and management of the Newspapers." (Id. § 3.02.) As previously discussed, NAC controls the advertising, promotion, solicitation, distribution, payment, receipts, circulation, and billing functions of The Tribune. (See 1982 JOA § 7.) The court concludes that operation through and control of NAC is "reasonably required for the proper and efficient operation and management" of The Tribune. (Management Agreement § 3.02.) Even assuming that KT is correct and that the term "Newspapers" excludes NAC, this argument would not weaken SLTPC's assertion that, in order to properly manage The Tribune, SLTPC must have the ability to appoint NAC representatives.

Under Delaware law, which the parties agree is controlling, the court must first determine whether the contract provisions at issue — here, the provisions defining the boundaries of SLTPC's and KT's power to manage The Tribune — are ambiguous. See True North Communications, Inc. v. Publicis S.A., 711 A.2d 34, 38 (Del.Ch. 1998). The starting point for this exercise is, of course, the language of the contract. See Citadel Holding Corp. v. Roven, 603 A.2d 818, 822 (Del. 1992) (citations omitted) ("It is an elementary canon of contract construction that the intent of the parties must be ascertained from the language of the contract"). "When the provisions in controversy are fairly susceptible of different interpretations or may have two or more meanings, there is ambiguity." Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232 (Del. 1997); accord E.I. du Pont de Nemours Co. v. Allstate Ins. Co., 693 A.2d 1059, 1061 (Del. 1997);Rhone-Poulenc Basic Chems. Co. v. American Motorists Ins. Co., 616 A.2d 1192, 1196 (Del. 1992). "Contract language is not ambiguous simply because the parties disagree concerning its intending construction. The true test is what a reasonable person in the position of the parties would have thought it meant." Eagle Indus., 702 A.2d at 1233 n. 8; accord E.I. du Pont, 693 A.2d at 1061; Rhone-Poulenc, 616 A.2d at 1196.

The language of the Management Agreement does not clearly and unambiguously define the rights SLTPC and KT have to manage The Tribune. In fact, a fair reading of the Management Agreement supports two conflicting interpretations: SLTPC's contention that its management authority is limited only by KT's right to control SLTPC's actions "indirectly," through the specific mechanisms described in the Management Agreement; and KT's assertion that it can direct SLTPC's management ofThe Tribune either indirectly or directly, except with regards to news and editorial policies.

As the Delaware Supreme Court has noted:

If a contract is unambiguous, extrinsic evidence may not be used to interpret the intent of the parties, to vary the terms of the contract or to create an ambiguity. But when there is uncertainty in the meaning and application of contract language, the reviewing court must consider the evidence offered in order to arrive at a proper interpretation of the contractual terms.

Eagle Indus., 702 A.2d at 1232 (citations omitted); accord Citadel, 603 A.2d at 822 ("[o]nly when there are ambiguities may a court look to collateral circumstances"). Because the Management Agreement is ambiguous as to the scope of SLTPC's and KT's management authority, the court looks to extrinsic evidence for guidance on this issue.

The extrinsic evidence supports SLTPC's position. Two affidavits submitted by SLTPC are particularly significant: the affidavit of Philip McCarthey, a former controlling shareholder of KT, and the affidavit of Donne Fisher, former Chief Financial Officer and Executive Vice-President of Tele-Communications, Inc. ("TCI") until 1995, who was working for TCI in 1997 as a consultant on the KT-TCI merger. According to Mr. McCarthey,

I am familiar with the Option, Management and Merger Agreements executed as components of the [KT]/TCI transaction. Those documents, while important, are only components of a larger agreement between TCI, [KT] and the controlling [KT] shareholders, of which I am one. The following are principal terms of that overarching agreement, which led the controlling shareholders in 1997 to exchange their [KT] shares for TCI shares . . . The [Kearns McCarthey] Family would manage the Tribune during the 5-year term. Such management would include complete, uncensored, unfettered editorial and publishing control throughout the option term and exclusive authority to implement all of [KT]'s rights and obligations under the Joint Operating Agreement (`JOA') including management of the Newspaper Agency Corporation (`NAC').

(Aff. of Philip G. McCarthey ¶¶ 12, 12(B).) Similarly, Mr. Fisher stated that:

[the contracts signed by TCI and SLTPC in 1997, including the Management Agreement,] were designed to work in unison to allow these [sic] Kearns family uninterrupted management and protection of all the assets relating to the operation of The Tribune until the Option came due . . . I told Mr. Welch that TCI would build a fence around Kearns-Tribune so there would be no operational interference with SLTPC's management . . . TCI wanted no part in running or managing NAC and insisted SLTPC represent Kearns-Tribune in all NAC matters. TCI wanted no change at NAC or in the Joint Operating Agreement that formed NAC because any alteration of the asset might interfere with the timely exercise of SLTPC's Option . . . Those of us representing TCI [at the time the Management Agreement was drafted] had no interest in running either The Tribune or NAC. SLTPC was responsible for all employment matters at The Tribune and it was to select the president of NAC, who would manage NAC. We understood clearly our authority to direct SLTPC in its representation of Kearns-Tribune was limited to the Annual Plan or yearly budget . . . We agreed to the broad delegation of owner or principal rights to SLTPC in the Management and Option Agreements [because] . . . the family that owned Kearns-Tribune insisted SLTPC have these nearly complete delegation of rights. Without them, there would be no merger. Second, allowing a management company like SLTPC owner-type rights was not uncommon to TCI.

(Aff. of Donne F. Fisher ¶¶ 5-10.)

This evidence is further strengthened by the testimony given by J.W. Gallivan, the former publisher of The Salt Lake Tribune, during the hearing on SLTPC's first motion for preliminary injunction. Mr. Gallivan testified that

[TCI representatives] Mr. Charles and Mr. Brett did not want TCI to become distracted with the management of the newspapers. They wanted to make sure that the-that TCI didn't get drug into running the newspapers if we didn't fulfill our obligations under the Management Agreement. And they wanted to build a fence, was the words they used, around the newspaper operation so that we managed and controlled all of the operation but that they had a couple of safeguards in it so that we couldn't diminish the value of the company.

(Tr. of Dec. 11, 2000, Hr'g of Mot. for Prelim. Inj. at 46.)

The extrinsic evidence offered by KT, primarily affidavits focusing on the necessity that the KT-TCI merger qualify as a tax-free transaction, are not contrary to SLTPC's interpretation of the Management Agreement. For example, Andrew Braiterman, a tax attorney, states in his affidavit that KT's retention of sufficient ownership rights over management of The Tribune was a purposeful element of the Management Agreement, and that this was necessary so that the KT-TCI merger would qualify as a tax-free transaction. (See Aff. of Andrew H. Braiterman ¶ 4.) Mr. Braiterman does not, however, state whether KT's retention of ownership rights was in the broad form KT argues it was, or the more limited form asserted by SLTPC. The affidavit of Lee Charles, an attorney for TCI who assisted in the drafting of the Management Agreement, suffers from the same problem. Mr. Charles states that "I specifically requested on behalf of TCI that the language be added, in paragraph 3.01, that SLTPC's performance of its duties was `subject to the direction and authority of Kearns-Tribune' so that the Board of K-T would retain ultimate authority over its business." (Aff. of Lee D. Charles ¶ 5.) Mr. Charles does not indicate how the parties intended KT to exercise its authority.

The court thus concludes that the language of the Management Agreement supports SLTPC's view that KT may exercise management authority over The Tribune only indirectly, through the mechanisms specifically described in the Management Agreement.

2. Principal/agent relationship

KT argues that established principles of agency law make clear that, under the Management Agreement, KT had the right to make the changes it made to the JOA. KT cites to the Restatement (Second) of Agency, which states that "[a] principal has the right to control the conduct of the agent with respect to matters entrusted to him." Restatement (Second) of Agency § 14 (1958). The comments to this section explain, however, that although "the principal has power to revoke the agent's authority, . . . this would constitute a breach of his contract with him"-a principle that favor's SLTPC's contention that KT has breached the Management Agreement when it revoked SLTPC's authority to appoint The Tribune's representatives to NAC. Id. at cmt. a. The comments to the Restatement also explain that "[t]he control of the principal does not, however, include control at every moment; its exercise may be very attenuated . . ." Id. This is consistent with SLTPC's position that KT's control over the duties it delegated to SLTPC was indirect and limited to the specific mechanisms described in the Management Agreement. The Restatement also recognizes, moreover, that "[a] principal is subject to a duty to an agent to perform the contract which he has made with the agent." Restatement (Second) of Agency § 432 (1958).

KT cites a series of cases in support of its proposition that "a principal is presumed to have retained the right to deal for himself unless he relinquished that right in `express language.'" IFA Inc. v. Ellco Leasing Corp., Civ. No. 90-4895, 1993 WL 101453, at *16 (N.D.Ill. Apr. 2, 1993). These cases, however, are distinguishable from the situation here. In each of these cases, the principal had hired the agent to sell the principal's property, and the holdings in these cases were limited to the brokerage context. See id.; Nepa v. Marta, 415 A.2d 470 (Del. 1980); Tebo v. Weld, 92 A. 876 (Del.Super.Ct. 1914); Nicholas v. Bursley, 119 So.2d 722 (Fla.Dist.Ct.App. 1960); E.A. Strout Western Realty Agency, Inc. v. Gregoire, 225 P.2d 585 (Cal.Dist.Ct.App. 1950); B-H, Inc. v. "Industrial America," Inc., 253 A.2d 209 (Del. 1969); Lambert v. Haskins, 263 P.2d 433 (Colo. 1953); Harry H. Rosin Co. v. Eksterowicz, 73 A.2d 648 (Del.Super.Ct. 1950).

Finally, KT claims that the corporate law principle of "nondelegation" precludes the Management Agreement from being read in a way that would transfer day-to-day managerial control out of KT's hands. It is a common exercise of business judgment for a corporate board of directors to delegate responsibilities over certain functions to agents or employees.See Rosenblatt v. Getty Oil, 493 A.2d 929, 943 (Del. 1985); Canal Capital Corp. v. French, Civ. No. 11,764, 1992 WL 159008, at *3 (Del.Ch. July 2, 1992); In re Bally's Grand Derivative Litigation, Civ. No. 14644, 1997 WL 305803, at *4 (Del.Ch. June 4, 1997). A board of directors may not, however, "delegate to others those duties which lay at the heart of the management of the corporation." Chapin v. Benwood Found., 402 A.2d 1205, 1210 (Del.Ch. 1979); accord In re Bally's, 1997 WL 305803, at *4. If a board of directors, through a management agreement, agrees to remove itself in a very substantial way from its duty to use its own best judgment to manage a company, a court may not uphold this agreement.See Grimes v. Donald, 673 A.2d 1207, 1214 (1996), overruled on other grounds by Brehm v. Eisner, 746 A.2d 244, 253 n. 13 (Del. 2000); In re Bally's, 1997 WL 305803, at *4. Thus, according to KT, if the court finds that the Management Agreement effected a broad delegation of power to SLTPC, the court must void the Management Agreement as impermissible under Delaware corporate law.

The nondelegation doctrine, however, is not violated by the delegation to SLTPC in this case. Underlying the nondelegation doctrine is the fiduciary duty principle that a board of directors is accountable to the stockholders of a corporation; a board, once elected by the stockholders to manage the corporation, may not abdicate its responsibility by assigning away all of its management authority. See Canal Capital, 1992 WL 159008, at *2-3. For this reason, the Delaware courts have held that "there is no conflict with [the nondelegation doctrine] where . . . the delegation of duty, if any, is made not by the directors but by stockholder action . . ." Lehrman v. Cohen, 222 A.2d 800, 808 (Del. 1966); accord Chapin, 402 A.2d at 1209; Canal Capital, 1992 WL 159008, at *2 (citing Lehrman). This is because

[a] stockholder has an ownership interest in his shares. To the extent that he contracts away the rights deriving from that interest, it is his prerogative to do so. Thus, where all of the stockholders enter into an agreement surrendering rights they would otherwise have in governing the affairs of the corporation, there can be no apparent injury to anyone else and consequently, in theory, there is no reason not to uphold the agreement.

Chapin, 402 A.2d at 1209 (citations omitted). Here, the Management Agreement was entered into by TCI on the same day that it acquired all of the shares of KT stock. As the sole stockholder in KT, it was TCI's prerogative to delegate whatever management authority it desired to SLTPC.

Having considered all of the above, the court concludes that SLTPC has demonstrated "heavily and compellingly" the "substantial likelihood that [it] will succeed on the merits" of its claim that MNG has breached the Management Agreement through its amendments to sections 2.02, 2.03, and 2.04 of the 2001 JOA, affecting SLTPC's ability to appoint The Tribune's representatives to NAC and to manage the day-to-day operations of The Tribune. Elam Constr., Inc. v. Regional Transp. Dist. 129 F.3d 1343, 1346 (10th Cir. 1997), cert. denied, Regional Transp. Dist. v. Elam Constr., Inc., 523 U.S. 1047 (1998); Visa, 936 F.2d at 1098.

B. Breach of the Option Agreement by MNG

On the same day that they signed the Management Agreement, KT and SLTPC also signed the Option Agreement. The parties agreed that, "in connection with the transactions contemplated by the Merger Agreement and as an inducement to SLT[PC] to enter into the Management Agreement, KT has agreed to grant SLT[PC] an option to purchase certain assets of KT as set forth herein." (Option Agreement at 1, attached as Ex. B to Pl.'s Mem. in Supp. of Mot. for Prelim. Inj. (hereinafter "Option Agreement").)

Under the Option Agreement

KT hereby grants SLT an option (the `Option') to purchase all, and not less than all, of the assets listed on Exhibit A hereto (the `Tribune Assets'), which assets constitute all of the assets used, held for use or usable in connection with the operation and publication of The Salt Lake Tribune.

(Id. at ¶ 1.) Although the Option Agreement refers to an Exhibit A which was to list the "Tribune Assets," no such document was attached to the Option Agreement, nor has one been produced to the court.

SLTPC may exercise this option beginning on July 31, 2002,⁸ five years after the Option, Management, and Merger Agreements were signed. (See id. ¶ 3.) If SLTPC decides to exercise its option, it is to pay KT the fair market value for the Tribune Assets. (See id. § 2.) During that five-year period, KT may not "sell or otherwise transfer the Tribune Assets to any other person or entity except . . . to an entity controlled by or under common control with KT." (Id. ¶ 6.)

8 After the option ripens, the Option Agreement holds open SLTPC's right to exercise the option so long as the Management Agreement is still in effect, and for ten days thereafter. (See id. at § 3.) The Management Agreement, however, may be terminated by either party beginning on the same date that the option ripens — July 31, 2002. (See Management Agreement § 2.01.)

SLTPC contends that KT's amendments to the JOA breach the Option Agreement. Specifically, SLTPC claims that the 2001 JOA amendments: (1) prevent SLTPC from exercising its option in 2002; and (2) violate paragraph 6 of the Option Agreement.

1. Exercise of option

Section 10 of the 2001 JOA grants DNPC a right to block any sale of KT: "DNPC shall have the unrestricted discretionary right to withhold its consent if any sale, transfer or conveyance in one or more transactions would result in more than 49% of the ownership of [KT] being held by any entity or entities other than MNG . . ." (2001 JOA § 10.) SLTPC contends that this gives DNPC the right to veto the sale of the "Tribune Assets" in 2002, effectively denying SLTPC the unrestricted right to exercise its option under the Option Agreement.

However, it is a well-established principle of corporate law that the sale of a company's stock is not equivalent to the sale of that company's assets. See Salt Lake Tribune Publ'g Co. v. ATT, Civ. No. 00-936, slip op. at 11 (D.Utah Dec. 15, 2000); 11 Fletcher Cyclopedia Corporations § 5100 at 93, § 5771 at 88 (Perm. ed. 1995); DuPont v. DuPont, 208 A.2d 509, 512 (Del. 1965) ("The shareholder has essential rights to share in the profits and in the distribution of assets on liquidation, but no specific interest in the corporate assets."); Orzeck v. Englehart, 195 A.2d 375, 377 (Del. 1963) (sale of stock does not equal sale of assets); Field v. Allyn, 457 A.2d 1089, 1097-98 (Del.Ch. 1983) (citing Orzeck); National Union Fire Insurance Co. v. Stauffer Chemical Co., No. C.A.87C-SE-11, 1991 WL 138431, at *2 (Del.Super.Ct. July 15, 1991) (same). Because KT stock is not equivalent to the assets of The Tribune, an amendment to the JOA requiring that DNPC approve the transfer of a majority of KT stock does not affect the ability of SLTPC to purchase the "Tribune Assets" in 2002.

Accordingly, the court finds that SLTPC has not demonstrated that there is a substantial likelihood that it will succeed on the merits of its claim that the 2001 JOA amendments have frustrated its ability to exercise its option.

2. Transfer of the Tribune Assets

Under the Option Agreement, KT agreed not to "sell or otherwise transfer the Tribune Assets" until SLTPC's option ripens. (Option Agreement § 6.) SLTPC asserts that the phrase "Tribune Assets" includes: (1) the right to appoint two members of the NAC Board; (2) the right to appoint the President and Treasurer of NAC; and (3) the right to appoint as President and Treasurer of NAC persons affiliated with The Tribune.⁹ KT responds by asserting that the ability to appoint The Tribune's representatives to NAC is not an asset of The Tribune, and, even if it were considered an asset, KT did not "sell or otherwise transfer" that asset by amending the 1982 JOA. (Id. § 1.)

9 SLTPC asserts that the "Tribune Assets" also includes: (1) the right to own The Tribune; (2) the right to edit and control the editorial voice of The Tribune; (3) ownership of 50% of the stock in NAC; and (4) all of the physical assets used to publish The Tribune, such as printing presses, delivery trucks, etc. (See Jan. 8 Frisch Aff. ¶ 9; Pl.'s Mem. in Supp. of Mot. for Prelim. Inj. at 23.) SLTPC has not alleged, however, that its rights to these four claimed assets have been compromised by the 2001 JOA. Moreover, SLTPC contends that its listing of the Tribune Assets does not constitute an exhaustive list. (See id. at 22.) The court therefore does not decide at this time whether these four items would be included on a complete list of the "Tribune Assets."

The court agrees with SLTPC's view of "Tribune Assets." The Option Agreement defines "Tribune Assets" as "all of the assets used, held for use or usable in connection with the operation and publication of The Salt Lake Tribune." (Id. § 6.) As addressed previously, under the 1982 JOA, nearly all of the functions of The Tribune — including the advertising, promotion, distribution, assembly, billing, and circulation for the newspaper — are performed by NAC. The ability to appoint the officers and board members of NAC who determine NAC policies and standards, therefore, is certainly one of the things "used, held for use or usable in connection with the operation and publication of The Salt Lake Tribune."

This definition of "Tribune Assets" comports with general principles of corporate law. "Among the assets of a corporation are its contracts-more precisely, the corporation's rights under its contracts . . ." Oxxford Clothes XX, Inc. v. Expeditors Int'l of Wash., Inc., 127 F.3d 547, 579 (2d Cir. 1997); accord S.H. Deliveries, Inc. v. Tristate Courier Carriage, Inc., Civ. No. 96C-02-086-WTQ, 1997 WL 817883, at *1 (Del.Super.Ct. May 21, 1997) (stating, without comment, that corporation's assets included "its contracts and contract rights" for the purposes of an "Asset Purchase Agreement"); Leib v. Georgia-Pacific Corp., 925 F.2d 240, 243 (8th Cir. 1991) (stating, without comment, that corporation's assets included its contracts); Helmer v. Brandano, Civ. No. 88-5930, 1989 WL 54010, at *1 (9th Cir. May 18, 1989) (same).

KT concedes that the 1982 JOA and other contracts are "Tribune Assets," but contends that the individual rights secured under those contracts are not. (See MNG's Supp. Mem. in Opp. to Mot. for Prelim. Inj. at 5.) Therefore, according to KT, the Option Agreement does not prohibit the sale or transfer of these individual rights secured by the 1982 JOA, such as the right to appoint The Tribune's representatives to NAC. Contracts such as the 1982 JOA and Management Agreement are valuable, however, only because they define and secure particular rights and obligations between the parties to those contracts. See S.H. Deliveries, 1997 WL 817883, at *1 (corporation's assets include "its contracts and contract rights") (emphasis added). Here, one of the most valuable rights secured by SLTPC through the Management Agreement was its right to "act on behalf of KT with respect to all action required or permitted to be taken by KT under the Joint Operating Agreement," which included the right to appoint, on behalf of KT, The Tribune's representatives to NAC. (Management Agreement § 3.02(ii).) This contract right is certainly a Tribune Asset and protected from sale or transfer through section 6 of the Option Agreement.

KT next argues that, even if the right to appoint The Tribune's representatives to NAC is a "Tribune Asset," that right was not sold or transferred by KT's amendments to the JOA. According to KT, the amendment of the JOA does not constitute a sale or transfer of Tribune Assets because, had the drafters of the JOA intended that any amendment to the JOA constitute a "transfer," they would have prohibited this specifically rather than include it as part of the larger, more general term "transfer." Moreover, notes KT, the JOA was previously amended by KT and DNPC in 1982, and the Management Agreement seems to contemplate that the JOA may be amended in the future. (See Management Agreement § 3.03(vii), stating that SLTPC "shall not, without the consent of the [KT] Board . . . [a]mend, alter or modify the Joint Operating Agreement").

This argument is not persuasive. First, as discussed below, the court does not reach the issue of whether simply amending the 1982 JOA violates SLTPC's rights because determination of this issue is not necessary for the resolution of SLTPC's motion for preliminary injunction. (See infra, § D(2).) Second, the clear effect of KT's amendments to sections 3 and 7 of the 1982 JOA is to transfer rights away from SLTPC. "The essence of a transfer is the relinquishment of a valuable property right." Matter of Commodity Merchants, Inc., 538 F.2d 1260, 1263 (7th Cir. 1976). Under the 1982 JOA, SLTPC has the authority to appoint, on behalf of KT, whomever it wants to the positions of NAC President and Treasurer. (See 1982 JOA § 7.) Under the 2001 JOA, however, SLTPC's selections for these positions is subject to two rejections by DNPC. (See 2001 JOA § 2.04; see also id., prohibiting the appointment of persons affiliated with The Tribune or Deseret News from serving as NAC officers). The 2001 JOA also permits DNPC to remove the SLTPC-appointed President of NAC at any time, with or without cause. (See id.) As a result of these amendments, the right to appoint The Tribune's representatives to NAC-previously exercised by SLTPC alone-must be shared with DNPC under the 2001 JOA. The court thus finds that SLTPC's right to appoint whomever it wished to the positions of NAC President and Treasurer has been, at least in part, "transferred" to DNPC by KT's amendment's to the JOA, in violation of section 6 of the Option Agreement.

There is also evidence suggesting that KT's amendments to the JOA represented a "sale" of these assets to DNPC. Mr. Singleton testified during the first hearing on SLTPC's motion for preliminary injunction that KT agreed to amend the JOA, at least in part, as "consideration for getting those releases [of liability for ATT from any lawsuit initiated by] the Deseret News. . ." (Tr. of Dec. 11, 2000, Hr'g of Mot. for Prelim. Inj. at 223.) Because KT amended the JOA in exchange for a valuable concession received from DNPC, it could also be said that KT violated section 6 of the Option Agreement by "selling" SLTPC's unfettered right to appoint The Tribune's representatives to NAC as existed under the 1982 JOA.

SLTPC has shown "heavily and compellingly" that "there is a substantial likelihood of success on the merits" on its claim that KT, through amendments to sections 2.02, 2.03, and 2.04 of the 2001 JOA, have transferred valuable Tribune Assets in breach of the Option Agreement.Elam Constr., 129 F.3d at 1346; Visa, 936 F.2d at 1098.

C. Breach of the Implied Covenant of Good Faith and Fair Dealing

SLTPC contends that KT violated the implied covenant of good faith and fair dealing when it entered into the amendments to the JOA. According to SLTPC, the spirit of the Management Agreement focuses on SLTPC's right to manage The Tribune until its option ripens, while the spirit of the Option Agreement focuses on SLTPC's right to purchase a newspaper that is substantially similar to the newspaper that was sold in 1997.

SLTPC is correct that "[u]nder Delaware law, an implied covenant of good faith and fair dealing inheres in every contract." Chamison v. HealthTrust, Inc., 735 A.2d 912, 920 (Del.Ch. 1999), aff'd, 748 A.2d 407 (Del. 2000). The court in Chamison explained the implied covenant as

a judicial convention designed to protect the spirit of an agreement when, without violating an express term of an agreement, one side uses oppressive or underhanded tactics to deny the other side the fruits of the parties' bargain.

It requires the Court to extrapolate the spirit of the agreement from its express terms and based on that "spirit," determine the terms that the parties would have bargained for to govern the dispute had they foreseen the circumstances under which their dispute arose.

Id. at 920-921 (internal citations omitted).

The court noted that "[t]he implied covenant cannot contravene the parties' express agreement and cannot be used to forge a new agreement beyond the scope of the written contract." Id. at 921. The court further cautioned that "Delaware courts apply this legal theory only in narrow circumstances." Id., citing Cincinnati SMSA Ltd. Partnership v. Cincinnati Bell Cellular Sys. Co., 708 A.2d 989, 992 (Del. 1998) ("[C]ases recognizing [principles of good faith and fair dealing] should be rare and fact-intensive, turning on issues of compelling fairness").

Here, the court has found that KT has, in fact, violated certain express provisions of its agreements with SLTPC. Given that fact, and in light of the admonition that this doctrine should be used only sparingly, SLTPC has not demonstrated that at trial it is likely to establish that KT has violated the doctrine of implied covenant of good faith and fair dealing. Similarly, SLTPC has not shown that its argument (raised by SLTPC during oral argument) that the agreements should be reformed will be successful at trial.

D. Other issues 1. Issues conceded by KT

KT has now agreed to change or cancel various amendments found in the 2001 JOA. First, SLTPC asserts that both The Tribune and the Deseret News retain the authority to spend their own money to advertise independently of NAC under the 1982 JOA. KT removed this authority, SLTPC contends, through its amendment in section 9 of the 2001 JOA, which states that DNPC, but seemingly not SLTPC, may advertise independently of NAC. (See 2001 JOA § 9.) At the hearing on SLTPC's motion for preliminary injunction, KT agreed that SLTPC retains the ability to advertise independently of NAC. Accordingly, the court instructs KT to change section 9 of the 2001 JOA as KT has agreed to do.

Second, SLTPC contests the validity of section 2.03 of the 2001. That section provides that "[i]f William Dean Singleton is initially appointed by [KT] as the Chairman [of NAC], he personally shall be permitted to serve in such capacity beyond expiration of the four year term so long as he desires and is ready, willing and able so to serve." (2001 JOA § 2.03, ¶ 2.) According to SLTPC, this amendment creates a lifetime appointment for Mr. Singleton to the NAC Board, and, under this amendment, Mr. Singleton would remain on the NAC Board against SLTPC's wishes even beyond SLTPC's potential exercise of its option in 2002. Again, KT has agreed to change the challenged section to reflect that Mr. Singleton would not remain on the NAC Board if SLTPC successfully exercises its option. KT is instructed to so amend section 2.03, ¶ 2 of the 2001 JOA.

2. Issues not necessary for resolution of the present motion

Several issues have bee raised by the parties that are not necessary for resolution of this motion. First, SLTPC argued that KT cannot make any amendments to the JOA without receiving the prior consent of SLTPC. (See Management Agreement § 3.03(vii).) At the hearing on its motion, SLTPC urged the court to rule not only on MNG's amendments to the JOA which might violate SLTPC's rights under the Management and Option Agreements, but also on the larger question of KT's right to amend the JOA without SLTPC's consent. The court declines to reach this broader question, however, in the context of the pending motion. The decision whether SLTPC is entitled to injunctive relief can be made by looking at other provision of the Management and Option Agreements relied on by the parties. Similarly, SLTPC notes that the 2001 JOA does not have a provision similar to section 19(6) of the 1982 JOA, which permits eitherThe Salt Lake Tribune or the Deseret News to terminate the JOA if the arrangement becomes uneconomical. SLTPC has not alleged, however, that it now wishes to terminate the JOA and has not demonstrated why preliminary injunctive relief is necessary to restore the language of section 19(6) at this time. Accordingly, the court reaches no decision on the propriety of the amendment.

II. Irreparable Harm

To constitute irreparable harm, an injury must be "certain, great, and actual." Chemical Weapons Working Group, Inc. v. United States Dep't of the Army, 963 F. Supp. 1083, 1095 (D.Utah 1997). Moreover, "[i]f damages can compensate a plaintiff an injunction will not lie." Holly Sugar Corp. v Goshen County Coop. Beet Grower's Ass'n., 725 F.2d 564, 570 (10th Cir. 1984). "While it is true that injunctive relief is generally inappropriate where money damages can make a plaintiff whole, . . . [courts] have recognized that the loss of a unique or fleeting business opportunity can constitute irreparable injury." Starlight Sugar, Inc. v. Soto, 114 F.3d 330, 332 (1st Cir. 1997) (emphasis added); see also, e.g., Ross-Simons of Warwick, Inc. v Baccarat, Inc., 102 F.3d 12, 18-19 (1st Cir. 1996) ("[A] plaintiff need not demonstrate that the denial of injunctive relief will be fatal to its business . . . If [it] suffers a substantial injury that is not accurately measurable or adequately compensable by money damages, irreparable harm is a natural sequel.").

When the claim is based on a breach of contract, irreparable injury may be found in two situations: (1) where the subject matter of the contract is of such a special nature or peculiar value that damages would be inadequate; or (2) where because of some special and practical features of the contract, it is impossible to ascertain the legal measure of loss so that money damages are impracticable.

ECRI v. McGraw-Hill, Inc., 809 F.2d 223, 226 (3d Cir. 1987); see also A.L.K. Corp. v. Columbia Pictures Indus., Inc., 440 F.2d 761, 763 (3d Cir. 1971) (same); 4 J. Pomeroy, Treatise on Equity Jurisprudence § 1401 (5th ed. 1941) (same).

Finally, many authorities have acknowledged the inherent uniqueness of a company sought to be acquired, and the irreparable harm suffered by the party acquiring the company by the loss of the opportunity to own or control that business. See Allegheny Energy, Inc., v. DQE, Inc., 171 F.3d 153, 159-68 (3d Cir. 1999) (surveying cases finding that opportunity to own and control business is unique and holding that injunction proper because irreparable harm would be present if such opportunity lost); Meis v. Sanitas Service Corp., 511 F.2d 655, 658 (5th Cir. 1975); Peabody Holding Company, Inc. v. Costain Group PLC, 813 F. Supp. 1402, 1421 (E.D.Mo. 1993). This principal is also affirmed under Delaware law. See Ace Limited v. Capital RE Corp., 747 A.2d 95, 110 (Del.Ch. 1999) (holding injunction proper when "unique acquisition opportunity" is threatened with destruction); True North Communications, Inc. v. Publicis, S.A., 711 A.2d 34, 44-45 (Del.Ch. 1998) (same); see also Revlon, Inc. v. MacAndrews Forbes Holdings, Inc., 506 A.2d 173, 184 (Del. 1986) (affirming ruling that plaintiff demonstrated irreparable harm by, inter alia, showing that its opportunity to bid for corporation would be lost without injunctive relief).

A. The Management Agreement

The threshold question of whether an irreparable injury exists for breach of the Management Agreement depends upon whether or not SLTPC held an agency coupled with an interest at the time KT amended the JOA. KT argues that under the Management Agreement SLTPC holds a mere agency and that therefore SLTPC is not entitled to an injunction. SLTPC asserts that the Management, Option and Merger Agreements must be read together as part of a single transaction and that if understood in this fashion, the Management Agreement grants SLTPC an agency coupled with an unique interest, which entitles it to injunctive relief.

KT correctly asserts that, as a general matter, it is within the power of a principal to revoke a grant of agency. Under the common law, in common principal-agent relationships, the agency power is created only for the benefit of the principal, and the principal can revoke the agency at will at any time. See, e.g., Haft v. Haft, 671 A.2d 413, 422-23 (Del.Ch. 1995), citing Restatement (Second) of Agency § 138 (1958). "Authority terminates if the principal or the agent manifests to the other dissent to its continuance." Restatement (Second) of Agency § 118 (1958); 2660 Woodley Road Joint Venture v. ITT Sheraton Corp., Civ. No. 97-450, 1998 WL 1469541, at *2 (D.Del. Feb. 4, 1998). "This well-established rule permits the revocation or termination of agencies at any time by either party, even where doing so constitutes a breach of contract." Restatement (Second) of Agency § 118; see also Government Guar. Fund of the Republic of Finland v. Hyatt Corp., 95 F.3d 291, 300 (3d Cir. 1996). Finally, when a mere agency is at issue, damages, not injunctive relief, are the proper remedy for breach. See Warren A. Seavey, Handbook of the law of Agency § 175 (1964) ("An agent has all the legal and equitable remedies of a contracting party . . . except to obtain specific performance); Restatement (Second) of Agency § 463 cmt. c (1958) ("[A]n agent is not entitled to a decree for the specific performance of a contract of employment.").

The exception to the general rule that agencies may be revoked at any time by either party occurs when the authority granted to the agent is a "power given as a security" or what is commonly termed "an agency coupled with an interest." Restatement (Second) of Agency §§ 138, 139 (1958); see also Hyatt, 95 F.3d at 300. Thus,

[a] power given as security is a power to affect the legal relations of another, created in the form of an agency authority, but held for the benefit of the power holder . . . and given to secure the performance of a duty or to protect a title, either legal or equitable, such power being given when the duty or title is created or given for consideration.

Restatement (Second) of Agency § 138.

Moreover, if an agent has an interest in the subject matter of the agency, as where it engages in a joint enterprise or invests in a business in which another supplies the subject matter, a power given it by the other to protect such interest is a power given as a security.

Hyatt, 95 F.3d at 300; see also Haft, 671 A.2d at 422-23; Restatement (Second) of Agency § 138 cmt. b; Bowling v. National Convoy Trucking Co., 135 So. 541, 543-44 (Fla. 1931). In such cases, a power given as a security cannot be terminated at the whim of the power giver.See Restatement (Second) of Agency § 14H cmt. a. Finally, "agency powers granted both for the benefit of the principal and the agent are irrevocable." Hyatt, 95 F.3d at 300 (emphasis added); see also Restatement (Second) of Agency § 138 cmt. d ("A person authorized to act as agent may also hold a power for his own benefit."). Thus, SLTPC will hold an irrevokable agency coupled with an interest if the Management Agreement's grant of agency was for the benefit of both KT and SLTPC. If such is the case, then, as discussed below, SLTPC may seek injunctive relief to protect its agency coupled with an interest.

Courts have recognized that an agency coupled with an interest can be created not only where an agent is a party to a joint enterprise or an investor in the enterprise, but also where the agent created the enterprise itself and then relinquished its direct financial interests in the business while retaining management control by contract. See, e.g.,Bowling, 135 So. at 543 (holding that agency to manage business for principal was coupled with interest when agent founded business and later sold business to principal while retaining managerial control of business under management agreement); see also Haft, 671 A.2d at 420 (finding agency irrevokable and coupled with interest regardless of whether agent held financial interest where agent was CEO of corporation and proxy agreement entered with principal secured the "substantial protection" of the agent's management position). In such instances,

an interest, not amounting to a property or estate in a business, but still an interest in the continued existence of the power or authority to act with reference to such business, secured by contract, based on consideration moving from the agent to the principal, and not merely for the purpose of earning a salary or commission by the exercise of the power, but because the agent has parted with value, at the principal's request or at his assent, looking to the exercise of the power as a means of reimbursement, indemnity, or protection, creates an agency coupled with an interest, which agency is not revocable and will in appropriate cases be protected and enforced by courts of equity.

Bowling, 135 So. at 544 (emphasis added) (citing 1 Mecham Agency § 405; 2 Black on Recission § 916); accord Hunt v. Rousmanier, 21 U.S. (8 Wheat.) 174, 204, 205-08 (1823) (Chief Justice Marshall noting agency coupled with an interest is "an interest in the subject on which the power is to be exercised" and that "the power must be engrafted . . . in the thing").

Finally, when an agency coupled with a unique interest is at issue, courts have noted that plaintiffs are entitled to an injunction and/or specific performance because the uniqueness of the interest would be destroyed absent equitable relief. In such instances, preliminary injunctive relief is particularly appropriate because of the unique nature of the property interest. See, e.g., Milton S. Kronheim Co. v. District of Columbia, 877 F. Supp. 21, 29 (D.D.C. 1995) (stating that courts in equity have considered injury to unique property to be irremediable at law), rev'd on other grounds 91 F.3d 193 (D.C. Cir. 1996); Woodley, 1998 WL 1469541, at *6 (D.Del. 1998) (noting same).

That SLTPC, as agent parted with value for its interest is clear. It paid one million dollars for the option to buy the Tribune and its assets, and it also gave the consent necessary to effectuate the Merger Agreement. The first relevant questions here are thus whether the agency powers granted SLTPC under the Management Agreement were for the benefit of both KT and SLTPC and whether the agency, as stated in Bowling, was in part granted as an "indemnity or protection." Bowling, 135 So. at 544. Whether SLTPC has such an agency coupled with an interest depends on the nature of the contractual relationship it occupied as a result of the Merger, Management, and Option Agreements. "Whether an interest which will make an agency or power irrevokable exists in a particular case is to be determined from the entire agreement between the parties and from the facts and circumstances attending the relation existing between the parties." 3 Am. Jur.2d "Agency" § 65 (2000); see also Cox v. Freeman, 227 P.2d 670, 679 (Okla. 1951) (noting same); O'Connell v. Superior Court of San Francisco, 41 P.2d 334, 335-36 (Cal. 1935) (same). As a matter of contractual interpretation, it is necessary to note that the Management and Option Agreements were entered into to effectuate the Merger Agreement between TCI and KT. Both were conditions precedent to the closing of that agreement. The Merger Agreement provides that:

The obligation of [KT] to consummate the transactions contemplated by this Agreement is also subject to the satisfaction at or prior to the Closing Date of each of the following conditions, unless waived by the Company each of the following conditions . . . [including:] The Management Agreement . . . and the Option Agreement . . . shall have been executed and delivered by the parties thereto and shall be in full force and effect . . .

(Agreement and Plan of Merger among Tele-Communications, Inc., TCI KT Merger Sub, Inc., and Kearns-Tribune Corporation (hereinafter "Merger Agreement") §§ 7.3, 7.3(j).)

Under Delaware law, when parties enter multiple agreements on the same day that cover the same period of time and are interrelated, "they form one contract and must be examined as such." E.I. DuPont de Nemours Co. v. Shell Oil Co., 498 A.2d 1108, 1115 (Del. 1985). "When an executed contract refers to another instrument and makes the conditions of the other instrument a part of it, the two will be interpreted together as to the agreement of the parties." Pauley Petroleum, Inc., v. Continental Oil Co., 231 A.2d 450, 456 (Del.Ch. 1967). "In upholding the intentions of the parties, a court must construe the agreements as a whole giving effect to all provisions therein. Moreover, the meaning which arises from a particular portion of an agreement cannot control the meaning of the entire agreement where such inference runs counter to the agreement's overall scheme or plan." Du Pont, 498 A.2d at 1113; see also Stemerman v. Ackerman, 184 A.2d 28, 34 (Del.Ch. 1962) (holding that "an inference which negatives the intent of the scheme dealt with by an instrument as a whole may not be allowed to control the interpretation thereof"). The Management and Option Agreements should thus be read in unison because their meaning flows from the totality of the circumstances that precipitated the KT-TCI Merger Agreement.

To find that SLTPC has an agency coupled with an interest under the Management Agreement, KT argues that SLTPC must have an interest in the subject matter of the Management Agreement itself. KT contends that SLTPC does not have an interest in the Management Agreement, pointing to language in the document that says that SLTPC exercises its agency powers "for the benefit of KT." (Management Agreement § 3.02.) Under this argument SLTPC has no interest in the subject matter of the Management Agreement because the document is clear on its face, noting that the agency power is to be exercised for KT's benefit. KT's argument is somewhat sound. This language certainly establishes the principle that the exercise of agency under the Management Agreement must benefit KT, and certainly no exercise of agency could be completely contrary to KT's interest.

However, while the language of the document is certainly clear on the precise issue that KT must benefit from its relationship with SLTPC, the language is not clearly dispositive on the issue of whether KT is thesole beneficiary of the agency authority. Therefore, on this limited point, the Management Agreement is ambiguous. Indeed, the Management Agreement also clearly establishes that SLTPC benefits from its exercise of authority under that agreement. It grants, as discussed above, SLTPC management authority over the day-to-day operation of The Tribune, including representation on the NAC Board and the ability to appoint NAC officers controlling the board. These grants of authority directly benefit SLTPC and give SLTPC an interest in the subject matter of the Management Agreement itself. Further, under the Management Agreement, SLTPC enjoys sole authority over the news and editorial policies of The Tribune. Even more than was the case in Bowling, where the former owner retained an interest in the subject matter of the management agreementper se-because of his inherent interest in the exercise of that authority, and his interest in shepherding the business he originated-SLTPC has an interest in safeguarding its interest in the continuing vitality of an asset which it has an option to purchase. See Bowling, 135 So. at 544.

That SLTPC has an interest in the Management Agreement becomes even more evident when the Management Agreement is interpreted under the "overall scheme . . . [and] plan" which it was generated to effectuate, the Merger of KT and TCI, a merger allowed only because the Management and Option Agreements were executed. Du Pont, 498 A.2d at 1113. Indeed, when the Management Agreement is interpreted with regard to the Merger and Option Agreement, it is apparent that SLTPC also has an interest in the subject matter of the agency created by the Management Agreement. The preamble to the Option Agreement states: "WHEREAS, in connection with transactions contemplated by the Merger Agreement and as an inducement to SLT[PC] to enter into the Management Agreement, KT has agreed to grant SLT[PC] an option to purchase certain assets of KT . . ." (Option Agreement at 1.)¹⁰ Executed on the same day and in the same transaction as the Management Agreement, this provision clearly contemplates that SLTPC was also to benefit from the subject matter of the Management Agreement. The operational control that the Management Agreement granted, as part of the tripartite structure of the 1997 KT-TCI transaction (which included the Merger, Management and Option Agreements), not only provided SLTPC the benefit of the NAC operations to ensure the stability and continuing vitality of the editorial and news functions of The Tribune, but also allowed SLTPC to protect The Tribune and its assets until it exercised its option under the Option Agreement. Thus, while the language of the Option Agreement appears to indicate that the option was given as an inducement to enter into the Management Agreement and that the Management Agreement might not also be for SLTPC's benefit, when considered as part of a complex merger transaction, the only way that the three agreements harmonize is if the Management Agreement is also understood to create a benefit for SLTPC as well. As discussed below, this "harmonized" interpretation is also supported by extrinsic evidence.

10 In oral argument, KT cited the Lombardo decision for the proposition that for an agency coupled with an interest to be found, "the agency . . . [must be] created to secure the performance of a duty to the agent or to protect a title in him . . ." Lombardo v. Santa Monica Young Men's Christian Ass'n, 215 Cal.Rptr. 224, 231 (Cal.Ct.App. 1995). KT cites this case for the proposition that the interest in an agency coupled with an interest must be created in the same document that establishes the agency relationship itself. It must be noted that on this point, the Lombardo decision was founded on an interpretation of the California Code, and that as a general matter the rule is therefore limited to California law. That this is the case is also evident from the fact that the case is not cited by any court outside of California and is cited by the California courts for its interpretation of the California code. However, even if one accepts the case's rule, when the Management Agreement is understood as part of a complex merger transaction, it is perfectly clear that "the agency" in this instance was "created to secure the performance of a duty." It both secured the duty to act under the 1982 JOA and the duty to consent to the Merger Agreement.

As discussed in the court's previous opinion in this matter, operational control of a newspaper is a unique asset, and the newspaper itself is a unique asset. See Salt Lake Tribune Publ'g Co. v. ATT, Civ. No. 00-936, slip op. at 31 (D.Utah Dec. 15, 2000); see also McKinney v. Gannett Co., 660 F. Supp. 984, 996-98, 1001, 1003, 1014 (D.N.M. 1981) (holding the right to control and manage newspaper a unique asset),aff'd 817 F.2d 659 (10th Cir. 1987); Jones v. Williams, 39 S.W. 486, 493-95 (Mo. 1897) (same). Moreover, as the case law suggests, an agent has an interest in the agency powers if such powers are to indemnify or protect an interest of the agent, including the interest in management authority itself. See Haft, 671 A.2d at 420; Bowling, 135 So. at 544. As such, the Management Agreement benefits SLTPC due to the fact that the authority it grants allows SLTPC to maintain the continued viability of both the business side and the editorial and news-making side of The Tribune.

This interpretation of the Management Agreement is not only consistent with the language of the agreement itself and the overall scheme and plan of which the Management Agreement was a part, but is also consistent with the extrinsic evidence presented to the court in this matter. For example, the affidavit of Mr. Fisher leaves no doubt but that the Merger, Management, and Option Agreements were part of a coordinated scheme and transaction. (See Fisher Aff. ¶ 5). It also makes clear that the parties intended to grant SLTPC the operational control over NAC both because it was necessary to the day-to-day operations of The Tribune and because it would allow SLTPC to protect and indemnify The Tribune and its assets to which SLTPC holds an option. (See id. ¶ 7, stating that "TCI wanted no part in running or managing NAC and insisted SLTPC represent Kearns-Tribune in all NAC matters. TCI wanted no change at NAC or in the Joint Operating Agreement that formed NAC because any alteration of the asset might interfere with the timely exercise of SLTPC's Option."). Considered together then, all evidence aiding interpretation of the Management Agreement-the contract language itself, the context in which the agreement was created and the scheme it was to effect, as well as the extrinsic evidence-leads to the conclusion that SLTPC had an interest in the subject matter of the agency authority itself, thereby creating in SLTPC an agency coupled with an interest.

Having found that the Management Agreement has created in SLTPC an agency coupled with an interest, the final relevant question is whether the challenged provisions in the 2001 JOA irreparably harm that interest such that an injunction and not damages are the proper form of relief. Where, as here, interests involving unique property are at stake, preliminary injunctive relief is particularly appropriate because of the unique nature of the property interest. See, e.g., Kronheim, 877 F. Supp. at 28 (stating that courts in equity have considered injury to unique property to be irremedial at law). The pertinent amendments that affect SLTPC's interest are those that prohibit it from direct participation in the NAC, thereby frustrating SLTPC's ability to exercise its authority under the Management Agreement to run the day-to-day operations of The Tribune and to exercise that authority to protect and indemnify The Tribune assets to which SLTPC has an option.

As discussed above in the court's consideration of SLTPC's likelihood of success on the merits, participation in the NAC is critical to The Tribune's day-to-day operation. As such, at least three provisions of the 2001 JOA-sections 2.02, 2.03 and 2.04-irreparably harm SLTPC. The first is section 2.02. Section 3.02(ii) of the Management Agreement gave SLTPC the authority to exercise KT's authority under the 1982 JOA. Under the 1982 JOA, KT had the right to appoint two NAC board members, a right that SLTPC therefore enjoyed under Section 3.02(ii). Section 2.02 of the 2001 JOA eliminates that right when it dictates that the two members of the NAC board representing The Tribune must be KT's President and Chairman. This provision effectively eliminates The Tribune's representation on the NAC and, as previously discussed, defeats the SLTPC's ability to carry on the day-to-day business of the paper. Second, and relatedly, section 2.03 frustrates SLTPC's NAC participation by providing that DNPC's designee shall be allowed to fill the position of Chairman of the NAC Board during every other four-year period, or, in the alternative, that Mr. Singleton shall be allowed to permanently occupy that position should he desire. Finally, section 2.04 of the 2001 JOA further frustrates SLTPC's ability to manage the day-to-day affairs of the paper by eliminating SLTPC's unfettered ability under the Management Agreement to select the President and Treasurer of the NAC. The 1982 JOA gave KT the right (delegated to SLTPC in section 3.02(ii) of the Management Agreement) to choose anyone it wished as President and Treasurer of the NAC. Section 2.04 of the 2001 JOA makes those offices subject to two initial objection strikes by DNPC and to removal by two board votes at any time, with or without cause (effectively giving DNPC complete veto power over the positions). Finally, section 2.04 of the 2001 JOA extinguished any possibility of SLTPC's representation on the NAC by providing that NAC officers cannot have any connections with or loyalty toThe Tribune unless DNPC consents to the appointment. The total effect of these provisions eliminates SLTPC's ability to exercise management authority on the NAC which, as discussed above, is crucial to the day-to-day operation of The Tribune.

Taken as a whole, these three provisions irreparably harm SLTPC. These provisions of the 2001 JOA extinguish the management powers SLTPC enjoyed prior to the 2001 JOA, powers not only necessary to carry on the day-to-day business of the paper, but also to protect the unique asset of the paper itself. The court can conceive of no clearer situation than the present one "where the subject matter of the contract is of such a special nature or peculiar value that damages would be inadequate."ECRI, 809 F.2d at 226. SLTPC has thus established that it will suffer irreparable harm under the Management Agreement if it does not receive a preliminary injunction.

B. The Option Agreement

The Option Agreement clearly provides:

Equitable remedies. The parties agree that irreparable damage would occur in the event that any of the provisions of the Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States, in addition to any other remedy to which they are entitled at law or in equity.

(Option Agreement ¶ 13). The Option agreement further provides that "KT agrees not to sell or otherwise transfer the Tribune Assets to any other person or entity . . ." (Id. ¶ 6.)

Several Delaware cases, involving contractual stipulations in complex merger transactions, hold that a court may give effect to provisions in agreements that stipulate certain actions would constitute irreparable harm. See, e.g., True North, 711 A.2d at 44 (finding irreparable harm when contract contained stipulation); Vitalink Pharmacy Servs., Inc. v. Publicis, S.A., Civ. No. 15744, 1997 WL 458494, at *9-10 (Del.Ch. Aug. 7, 1997) (holding that stipulation alone allowed finding of irreparable harm). As discussed above, the 2001 JOA's prohibition on allowingTribune personnel to sit on the NAC board is the transfer and destruction of a valuable Tribune Asset. Therefore, the court's inquiry could stop here under the guide of Delaware law.

However, even absent such guidance, irreparable harm in this situation exists under the Option Agreement itself. As also discussed above, a newspaper is a unique asset under the law. This is also true of the "management side" of a newspaper. See McKinney, 660 F. Supp. at 996-98, 1001, 1003, 1014; Jones, 39 S.W. at 493-95. Courts have found that, when an option holder has an option to buy an unique asset, the holder of the asset has a duty to maintain the asset until the option is exercised.See, e.g., McCarroll v. Newsham, 278 F. 4, 7 (5th Cir. 1922) (holding that "[i]t makes no difference . . . whether . . . [the] instrument was an option or a contract of sale. In either event, it was the duty of the plaintiff to maintain the property in its then condition."); accord 97 A.L.R.3d 1220, § 4a (1980) (noting same). There is no question but that KT anticipates that, if not enjoined, it will change the structure of NAC in a way which will irreparably affect the Tribune Assets. (See, e.g., Jan. 31 Aff. of Joseph H. Zerbey, IV ¶¶ 6, 7) (discussing plan to ensure that manager of NAC is not member of Tribune personnel). As discussed above, the amendments made in the 2001 JOA not only harm SLTPC as discussed above in the court's treatment of the Management Agreement, but also harm SLTPC because the newspaper will necessarily change if SLTPC is not allowed representation in the NAC during the period before it exercises its option. It would not be the same "Tribune" at the time SLTPC might exercise its option because, among other things, Tribune personnel would be prohibited from NAC management positions.

KT next asserts that SLTPC cannot be injured under the Option Agreement because the option price of The Tribune is based on "fair market value." (Option Agreement § 2(a).) According to KT, if KT damages The Tribune through its management, the market will adjust the valuation ofThe Tribune downward and SLTPC will simply have to pay less to exercise its option. The question here, however, is not whether SLTPC will pay a fair price under the option, but whether it has an option to buy a unique asset. By changing the management structure of The Tribune, the 2001 JOA irreparably harms SLTPC by changing the nature of the asset to which SLTPC has an option.

Irreparable harm exists, when a plaintiff demonstrates that absent an injunction it could lose "a unique or fleeting business opportunity."Starlight Sugar, 114 F.3d at 332. As noted above, because ownership and control of a business is a unique asset, courts have found injunctions proper when opportunity to own a unique business would be lost. See Allegheny Energy, 171 F.3d at 159-68 (surveying cases finding thatopportunity to own and control business is unique and holding that injunction proper because irreparable harm would be present if such opportunity lost). Here, "the subject matter of the contract is of such a special nature" and "particular value" because the option to purchase is one to purchase an unique asset; moreover, due to the "special and practical features of the contract, it is impossible to ascertain the legal measure of loss" because the of the unique asset at issue "so that money damages are impracticable." ECRI, 809 F.2d at 226. As such, not only does the Option Agreement itself stipulate to irreparable harm, but SLTPC has also demonstrated that it would suffer irreparable harm under the Option Agreement if the 2001 JOA provisions prohibiting it from participating in the NAC board were allowed to stand.

Because SLTPC has demonstrated "heavily and compellingly" that it will suffer irreparable harm under both the Management and the Option Agreements, this element weighs in favor of granting a preliminary injunction. Visa, 936 F.2d at 1098; Elam Constr., 129 F.3d at 1346.

III. Balance of Injuries to the Parties

To obtain injunctive relief, a party must establish that "its threatened injury outweighs any harm the proposed injunction may cause to the opposing party." Elam Constr., Inc. v. Regional Transp. Dist. 129 F.3d 1343, 1346-47 (10th Cir. 1997). KT argues that it will be harmed if an injunction issues because it would be restricted in its ability to enhance the value of its $200,000,000 investment. In short, KT argues it would be harmed because it would lose its ability to maximize profits from The Tribune in the short term. In support of this contention, KT further claims that it has an economic incentive to manage the NAC as efficiently and profitably as possible, while SLTPC has a corresponding incentive to inefficiently manage the NAC so that the value of The Tribune assets will be less if and when SLTPC exercises its option.

As evidence for this proposition, KT points to SLTPC's contract to print USA Today newspapers, claiming that this arrangement is uneconomical. SLTPC counters by asserting that the USA Today contract allows it to maximize NAC profits by ensuring that the NAC presses operate close to capacity. There is no dispositive evidence before the court that either party would do anything other than exercise sound business judgment to maximize the profitability of NAC. Indeed, the only concrete evidence before the court suggests that SLTPC has been a capable and responsible NAC manager, increasing the NAC revenues received by its principals from $24.9 million to more than $58 million for the period from 1990 to 2000. (See Jan. 8 Frisch Aff. ¶ 10, attached as Ex. F to Pl.'s Mem. in Supp. of Mot. for Prelim. Inj.) The court need not decide whether SLTPC or MNG will be the better manager of The Tribune. The issue here, as noted above, is that the 2001 JOA amendments infringes upon rights that SLTPC possesses now.

KT also suggests that it would be harmed if an injunction issues because the return to the management structure of the 1982 JOA would disturb the "brokered truce" it structured with DNPC, thus placing KT at risk of a lawsuit by DNPC. This asserted harm is illusory for two reasons. First, MNG bought the stock of KT with its eyes open, knowing full well the extent of the assets and liabilities it purchased. MNG cannot now assert that it is unfair for a party purchasing KT stock to be subject to the Option and Management Agreement, because that was the structure of the business when MNG purchased it. In short, MNG cannot claim now that it is "harmed" by the very structure of the business it knowingly purchased. Second, the court need not reach the issue of whether a future DNPC lawsuit would have any merit. Any harm flowing from a threatened DNPC lawsuit is, at this point, speculative.

KT's injuries, if any, therefore, are speculative and financial in nature; as discussed in the previous section, SLTPC's injuries are concrete, imminent, and irreparable. As such, SLTPC has demonstrated that the balance of injuries factor weighs "heavily and compellingly" in its favor. SCFC ILC, Inc. v.Visa, 936 F.2d 1096, 1098 (10th Cir. 1991).

IV. Public Interest

The final factor SLTPC must establish is that an injunction, if issued, would not be adverse to the public interest. See Elam Constr., Inc. v. Regional Transp. Dist. 129 F.3d 1343, 1347 (10th Cir. 1997), cert. denied, Regional Transp. Dist. v. Elam Constr., Inc., 523 U.S. 1047 (1998). Both parties appear to agree that the maintenance and protection of two strong and independent newspapers in the Salt Lake City area is in the public interest. That The Tribune and the Deseret News operated under the 1982 JOA for eighteen years indicates that both newspapers have been successful. But KT claims that its amendments to the JOA will succeed in smoothing relations between The Tribune and the Deseret News by, among other things, allowing the Deseret News to move to morning publication. At the hearing on its motion for preliminary injunction, however, SLTPC agreed that the Deseret News should be allowed to move to morning publication and that it would work with the Deseret News under the terms of the 1982 JOA to achieve this goal.

Accordingly, the court finds that SLTPC has "heavily and compellingly" demonstrated that the issuance of an injunction in this case would not be adverse to the public interest. SCFC ILC, Inc. v.Visa, USA, Inc., 936 F.2d 1096, 1098 (10th Cir. 1991).

Order

SLTPC's motion for a preliminary injunction is GRANTED as regards sections 2.02, 2.03, and 2.04 of the 2001 JOA; SLTPC's motion for a preliminary injunction is DENIED as regards section 10 of the 2001 JOA.

In accordance with this order, MNG shall immediately suspend implementation of the specific amendments to the 2001 JOA for which SLTPC was granted injunctive relief, as described immediately above, and as regards those specific amendments, will abide by the provisions of the 1982 JOA. MNG shall also amend section 9 of the 2001 JOA in a manner consistent with this order.¹¹

11 Because neither party has requested or suggested the need for a security, the court does not order SLTPC to give one.