By New Times
By Connor Radnovich
By Robrt L. Pela and Amy Silverman
By Ray Stern
By Keegan Hamilton
By Matthew Hendley
By Monica Alonzo
By Monica Alonzo
I finally crawled out of bed and lifted the blasted receiver. It was David Carr of the New York Times. He asked about the night before. What were the details of the closing? Did I know ahead of time? Was I angry? What did I think of the lackluster Weekly winning out in L.A.? Did I think New Times had committed an antitrust violation? Was the situation similar to that of the Chandler and the Hearst families (the infamous former owners of the L.A. Times and the defunct L.A. Herald Examiner), who had divided up territory back when reporters carried press cards in the brims of their hats?
Wait a minute. Ratchet back a little. An antitrust violation?
Sure, Carr said, and began explaining Section One of the Sherman Act. Media companies cannot enter into a quid pro quo to eliminate competition.
In the days after that, Carr's story was published and many others followed, all with the slant that the two largest alternative newspaper companies in the nation had seemingly committed a slam-dunk antitrust violation.
Nobody thought much of the claims. College professors were quoted to back up the contention. Sources on the inside of the deal were barely consulted. Plus, it seemed unlikely that a Department of Justice that had allowed daily newspapers to eliminate smaller competitors for generations (take the Arizona Republic swallowing up the Phoenix Gazette, and the massive Gannett company buying up the whole shebang) would bother with two alternative media gnats. Especially John Ashcroft's pro-business Justice Department.
It became particularly amusing when the daily newspaper titans began reporting that escort services and masseuses that advertise in the backs of practically every alternative paper in the country were the ones complaining about their ad rates going up in the "monopoly" weeklies beside the Pacific and Lake Erie. (Turned out the L.A. Times got it wrong when it said New Times' Cleveland paper had gone up on its ads; rates had actually decreased after the sales.) But the irony of DOJ goons going after New Times and the Voice to protect the rights of X-rated businesses wasn't lost on anybody with half a brain.
A few weeks later, I was having a cup of coffee when my phone machine went off. It was somebody named Maurice Stucke in the 202 area code. He didn't say what he wanted. When I called him back, he told me he was a Justice Department attorney in the Antitrust Division and that he was looking into whether there'd been a Sherman Act violation when NTLA was sold. When I hung up, I called New Times lawyer Steve Suskin, who sent a shock wave through the company when he announced that G-men were on the prowl.
The shock soon turned to outrage, as Stucke and his band of bow-tied goons began to stick it to New Times and the Voice. As newspaper readers in every major city in the country came to know, an antitrust case was indeed started. That is, readers in every city but Phoenix, where the hapless Republicdidn't even bother to capitalize on the opportunity to lambaste a competitor. Because at first blush, it did seem that New Times and the Voice – in becoming such easy pickings for the federales – must have gotten some boneheaded legal advice.
The reality is that antitrust law is complicated. Not a single commentator bothered to parse the "Failing Business" section of the law. The Justice Department utilized this vacuum of analysis to expand its theory of prosecution. Suddenly, its lawyers weren't just dealing with the elimination of business competition but with the alleged squelching of unique editorial voices in two communities. That's right, John Ashcroft, whose agents have trampled on the basic human rights of the Cuba detainees and swarms of Arab-Americans in the wake of 9/11, was suddenly interested in the rights of newspaper readers. All antitrust regulations address impact on advertisers; there's not a word about readers, let alone readers of alternative papers. Nonetheless, Stucke and his bunch began deposing disgruntled former LA Weekly employees about whether NTLA's demise had denied La La Land an essential alternative editorial choice.
Never mind that the L.A. Times monopolizes the daily newspaper market in that city. (The Tribune Company of Chicago added the big daily to its stable of properties a couple of years ago, ensuring corporate-speak across a dozen American cities.) Never mind that a raft of neighborhood weeklies existed all along in L.A. Never mind that former mayor Dick Riordan – Duh!bya's choice to become governor of California last time around (he lost in the GOP primary) – is circulating a prototype for a new L.A. newsweekly that he hopes to start this summer.
So what's the latest? Rather than continue to pay out exorbitant legal fees to fight the G-men – New Times' tab is approaching $500,000 for a few months of representation – the company and Village Voice have agreed to pay $375,000 each to the state of California and a smaller amount to Ohio. They have also entered into a consent decree to resell assets to new newspapers in L.A. and Cleveland. Cozy . . . since Riordan could become the beneficiary of this deal in Southern California.