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Arbitrator: Gazette-Mail owes $3.8M to Daily Mail owners

By BISHOP NASH

The Herald-Dispatch

CHARLESTON, W.Va. — An arbitration filed Tuesday in U.S. District Court has ordered the owners of the Charleston Gazette-Mail to pay nearly $3.8 million to the publishers of the former Charleston Daily Mail.

Arbitrator Edward McDevitt ruled that the Daily Gazette Co. and the Daily Gazette Holding Co. must pay $3,795,000 in damages to MediaNews Group Inc. and Charleston Publishing Co., the now-defunct Daily Mail’s former owners.

The award comes through three claims, including a $1.5 million sum based on the claimants’ loss of rights to the “dailymail.com” online address that they said was sold to the London-based Daily Mail newspaper in 2013 without their permission – a violation of the parties’ limited partnership agreement.

The payment also includes $495,000 in past-due management fees and $1.8 million for future management fees through 2024, when the parties’ LPA was set to expire. As part of their agreement, the Daily Gazette Co. was to pay MediaNews $225,000 annually in fees.

The agreement was written in 2010 to satisfy a Department of Justice challenge to MediaNews’ sale of the Daily Mail to the Daily Gazette Co. in 2004, which the federal government accused of violating antitrust laws. In 2015, the Daily Mail was discontinued and merged with The Charleston Gazette, forming the Charleston Gazette-Mail and effectively ending the agreement, the arbitration ruled.

“The company is currently evaluating its options on how to go forward with this decision,” said Trip Shumate, Charleston Newspapers president and CFO, in a Charleston Gazette-Mail report. “The way the arbitration clause is written, we can appeal this decision to the U.S. District Court.”

McDevitt wrote that though he was “extremely sympathetic” to Charleston Newspapers, he ruled its defenses were not “legally sufficient to defeat the claims of the claimants.”

Follow reporter Bishop Nash on Twitter @BishopNash.

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