Note this story package includes five related stories:

- Big Sky, big mess in Montana (the main story)

- Big Sky above, private land below

- How Huntley sold Big Sky to Montana

- Touring the future on Insta-Teller Road

- Armies of skiers are coming to Yellowstone

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BIG SKY, Mont. - When John Kircher, the most powerful person in this resort town, loaded a box of iced ocean lobster and some friends into a helicopter and flew into a national-forest wilderness for a picnic, newspapers around Montana reported the spectacular trespass.

Kircher, the head of the Big Sky resort, had to pay a $200 Forest Service ticket for violating the tranquility of the wilderness with a machine.

Yet Big Sky's own newspaper, the Lone Peak Lookout, never wrote a word about it.

This resort town was created by Chet Huntley, a hard-hitting journalist. During his 14 years as co-anchor of the NBC Nightly News, Huntley pulled no punches. Once Huntley moved here, the New York Times, Life and Time magazines and 60 Minutes covered Big Sky as hard news, showing some skepticism about the ex-newsman doing his frontier development.

When Huntley died in 1974, the coverage changed. Today, the national reporting on Big Sky is done by the ski magazines, which mostly shovel fluff. Regionally, news media from around Montana cover Big Sky sporadically.

The only local media, the weekly Lone Peak Lookout, is run by Kevin Kelleher, who sells real estate when he's not writing editorials. The Lookout is fat with real estate ads, and the front page of nearly every issue blows up a color photo promoting tourism and the good life in Big Sky.

Until a year ago, there was a competing local paper, the Big Sky Bugle. The Bugle wasn't pretty, but it ran hard news on its front page, emphasizing the impacts of development and the screw-ups.

It was the Bugle that broke the story of Kircher's wilderness trespass in 1995, under the front-page headline, "That's Outrageous!" Appreciated by its readers, the Bugle fought an uphill battle, partly because of a sweetheart deal the Lookout had with the resort.

For the four years that the Bugle was published, the resort got a free two-page color ad in every issue of the Lookout. In return, as stated in letters from Kircher to Kelleher, the Lookout was "the only" local paper allowed on resort property.

Suzanne Squires, who ran the Bugle, says she wondered why she had trouble distributing the Bugle on resort property, while the Lookout was omnipresent. Maids placed fresh copies of the Lookout in hundreds of tourists' rooms in the Huntley Lodge and in by-the-night condos.

Distribution was crucial, since both papers were free to their readers. "I kept going back to (the resort), asking if I could distribute," Squires says, "and they kept putting me off."

Squires says that because her paper wasn't reaching enough tourists, advertisers abandoned her. "I had readers, but they don't buy ads. And businesses don't advertise if they can't reach their customers."

Places like bars and stores also became reluctant to distribute her paper, something she attributes to the resort's power. "Nobody can afford to piss off the mountain," she says. Late in the competition, just before Squires folded the Bugle, she discovered the deal between Kircher and Kelleher, and she filed one of the many Big Sky lawsuits, charging unfair business practice. (The suit is still being argued.)

"I'm not saying the resort has to advertise in my paper," Squires says. "They just have to let my paper in there, if they let in other papers. Kircher wanted to squelch my editorial views. With all the (screw-ups) around here, I was on them like a chicken on a June bug."

Kelleher and Kircher deny the deal had anything to do with news coverage. But whether or not it's a coincidence, Kelleher's paper is pro-resort. After a January bout of 30-below-zero shut down all lifts for a day, for instance, the Lookout reported: "The good news is that the shutdown did not last long ... All lifts were open (the next day), making it possible for skiers to once again enjoy the great snow conditions!'

Hardly anything is black or white. Kelleher says he's one of the people who asked the state to crack down on pollution from the sewer here, and he campaigned for the federal government to preserve wildlife habitat.

But when the central water system ran dry in half the neighborhoods last Labor Day weekend, frustrating a lot of locals and tourists, Kelleher buried the story on page 10. Other recent bad news at the resort - a ski lift crushed by an avalanche, another lift dropping a chair - was also buried.

Mostly, Kelleher says, he concentrates on positive news. "I'm a community builder, not a community wrecker."

"Some of it is so childish up here, so blatant," Squires says, "you have to have a sense of humor."

*R.R.

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Note clarification by Ed Marston on April 28, 1997:

Big Sky, big stress

The March 31, 1997, issue of HCN described the litigious nature of Montana's Big Sky Resort. We've gotten interesting responses to the story. Writer Ray Ring, sitting in Bozeman, says he sees signs that the article may have helped shift the tone of the dialogue. After a recent meeting, Gallatin County commissioner Jane Jelinski was quoted in the Bozeman Daily Chronicle as saying, "This is the first Big Sky hearing in a long time where someone's character wasn't impugned."

Less positively, HCN received a death threat directed at one of the people quoted in Ring's article. We even had to pay for the threat, since it came in on our 800 number. When we traced the call and Ring rang the number back, a passerby picked up the telephone, which was on a busy Seattle street.

Finally, we were contacted by an attorney for the Lone Peak Lookout, a newspaper that circulates in the resort. He convinced us that there were three problems with the sidebar titled "Chet Huntley's legacy includes suppression of a free press." In particular, there was no intent on the part of HCN or Ray Ring to imply by headline or text that the Lone Peak Lookout newspaper is controlled by the Big Sky Resort or its principals.

We regret the use of the phrase "sweetheart deal" in the following sentence: "Appreciated by its readers, the Bugle fought an uphill battle, partly because of a sweetheart deal the Lookout had with the resort."

Although it was reported in various court documents and news stories that the Lone Peak Lookout gave Big Sky Resort two free pages of advertising in return for distribution rights on resort property, and the HCN article repeated that, in fact the original letter of agreement between the resort and the Lookout calls for the resort to pay for all but 26 column-inches per week of ads in the Lookout.