Village Voice Media, which owns the LA Weekly among other papers, and New Times are in serious talks about merging to create a new 18-paper chain, the San Francisco Bay Guardian reports. In fact, the Guardian calls them "intense negotiations" and has obtained a bunch of insider documents, including a draft merger agreement dated in May. The Bay Guardian cares big time because its chief competition, the SF Weekly, is one of the New Times papers.

New Times, which owns 11 newspapers including the SF Weekly, would have 62 percent of the equity in the new venture, and VVM, which owns the Village Voice and six other papers, would have 38 percent.

The documents mention a Nov. 30, 2005, date for closing the deal, but suggest that the date may have to be pushed back, in part because of federal regulatory issues.

Rumors of a possible VVM-New Times merger have been swirling for months (see "Chain Gang," 5/25/05). Neither of the principals has denied the reports, although employees of some VVM papers have attempted to dismiss them.

But the new documents are the first concrete confirmation that talks are indeed going on, and that the two parties are close enough to agreement that they've circulated draft bylaws of a new limited liability corporation that would own all of the VVM and New Times papers.

Staffers may want to note this passage from the draft agreement: "The new company 'may, in its reasonable discretion, transition all employees ... to new compensation, benefit plans, programs or arrangements.'"